EXHIBIT 4
XXXXXX XXXXXXX ABS CAPITAL I INC.,
Depositor,
HOMEQ SERVICING CORPORATION,
Servicer,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Servicer
FIRST NLC FINANCIAL SERVICES, LLC,
Responsible Party,
LASALLE BANK NATIONAL ASSOCIATION,
Custodian,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
------------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2005
------------------------
XXXXXX XXXXXXX HOME EQUITY LOAN TRUST 2005-4
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-4
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans..............................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans...........
Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the
Mortgage Loans............................................
Section 2.04 Execution and Delivery of Certificates....................
Section 2.05 REMIC Matters.............................................
Section 2.06 Representations and Warranties of the Depositor...........
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans.......................
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers..............................................
Section 3.03 Successor Subservicers....................................
Section 3.04 Liability of the Servicers................................
Section 3.05 No Contractual Relationship between Subservicers
and the Trustee...........................................
Section 3.06 Assumption or Termination of Subservicing Agreements
by Trustee................................................
Section 3.07 Collection of Certain Mortgage Loan Payments..............
Section 3.08 Subservicing Accounts.....................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts...........................................
Section 3.10 Collection Accounts.......................................
Section 3.11 Withdrawals from the Collection Accounts..................
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account......................................
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage...........................
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption Agreements.
Section 3.15 Realization upon Defaulted Mortgage Loans.................
Section 3.16 Release of Mortgage Files.................................
Section 3.17 Title, Conservation and Disposition of REO Property.......
Section 3.18 Notification of Adjustments...............................
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans..............................
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee......................
Section 3.21 Servicing Compensation....................................
Section 3.22 Annual Statement as to Compliance.........................
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements...........................
Section 3.24 Trustee to Act as Servicer................................
Section 3.25 Compensating Interest.....................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act..................
Section 3.27 Transfer of Servicing for the Mortgage Loans..............
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances..................................................
Section 4.02 Priorities of Distribution................................
Section 4.03 Monthly Statements to Certificateholders..................
Section 4.04 Certain Matters Relating to the Determination of LIBOR....
Section 4.05 Allocation of Applied Realized Loss Amounts...............
Section 4.06 Swap Account..............................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates..........................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates..................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.........
Section 5.04 Persons Deemed Owners.....................................
Section 5.05 Access to List of Certificateholders' Names and Addresses.
Section 5.06 Maintenance of Office or Agency...........................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers.
Section 6.02 Merger or Consolidation of the Depositor or a Servicer....
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others................................................
Section 6.04 Limitation on Resignation of a Servicer...................
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims..............................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.........................................
Section 7.02 Trustee to Act; Appointment of Successor..................
Section 7.03 Notification to Certificateholders........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.....................................
Section 8.02 Certain Matters Affecting the Trustee and the Custodian...
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.....
Section 8.04 Trustee May Own Certificates..............................
Section 8.05 Trustee's Fees and Expenses...............................
Section 8.06 Eligibility Requirements for the Trustee..................
Section 8.07 Resignation and Removal of the Trustee....................
Section 8.08 Successor Trustee.........................................
Section 8.09 Merger or Consolidation of the Trustee....................
Section 8.10 Appointment of Co-Trustee or Separate Trustee.............
Section 8.11 Tax Matters...............................................
Section 8.12 Periodic Filings..........................................
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis
Risk CarryForward Amounts and Class IO Shortfalls; Tax
Classification of the Excess Reserve Fund Account, Swap
Account and the Interest Rate Swap Agreement..............
Section 8.14 Custodial Responsibilities................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans............................................
Section 9.02 Final Distribution on the Certificates....................
Section 9.03 Additional Termination Requirements.......................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.................................................
Section 10.02 Recordation of Agreement; Counterparts....................
Section 10.03 Governing Law.............................................
Section 10.04 Intention of Parties......................................
Section 10.05 Notices...................................................
Section 10.06 Severability of Provisions................................
Section 10.07 Assignment; Sales; Advance Facilities.....................
Section 10.08 Limitation on Rights of Certificateholders................
Section 10.09 Inspection and Audit Rights...............................
Section 10.10 Certificates Nonassessable and Fully Paid.................
Section 10.11 Rule of Construction......................................
Section 10.12 Waiver of Jury Trial......................................
Section 10.13 Rights of the Swap Provider...............................
SCHEDULES
---------
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of HomEq Servicing
Corporation, as Servicer
Schedule III Representations and Warranties of JPMorgan Chase Bank,
National Association, as Servicer
Schedule IV-A Representations and Warranties of Xxxxxx Xxxxxxx ABS
Capital I Inc. as to the Mortgage Loans
Schedule IV-B Representations and Warranties of Xxxxxx Xxxxxxx ABS
Capital I Inc. as to certain Mortgage Loans
Schedule IV-C Representations and Warranties of Xxxxxx Xxxxxxx ABS
Capital I Inc. as to certain Mortgage Loans
Schedule V Representations and Warranties of First NLC as to the
First NLC Mortgage Loans
Schedule VI Representations and Warranties of LaSalle, as Custodian
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee and Custodian
Exhibit F Form of Document Certification and Exception Report of
Trustee and Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Certification to be provided by the Trustee to
Depositor
Exhibit N Form of Certification to be provided by the applicable
Servicer to Depositor
Exhibit O First NLC Purchase Agreement
Exhibit P Meritage Agreements
Exhibit Q Wilmington Finance Agreements
Exhibit R Form of Servicer Power of Attorney
THIS POOLING AND SERVICING AGREEMENT, dated as of November 1,
2005, among XXXXXX XXXXXXX ABS CAPITAL I INC., a Delaware corporation (the
"Depositor"), JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking
association ("JPMorgan"), HOMEQ SERVICING CORPORATION, a New Jersey corporation
("HomEq", and together with JPMorgan, the "Servicers"), FIRST NLC FINANCIAL
SERVICES, LLC, a Florida limited liability company ("First NLC" or the
"Responsible Party"), DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking
association, as trustee (in such capacity, the "Trustee"), and LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, as custodian ("LaSalle").
W I T N E S S E T H:
--------------------
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that four segregated asset pools within
the Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Interest Rate
Swap Agreement, (iii) the Swap Account, (iv) the Excess Reserve Fund Account,
and (v) the right of the LIBOR Certificates to receive Upper-Tier CarryForward
Amounts including, but without duplication, Basis Risk CarryForward Amounts and
the obligation to pay Class IO Shortfalls) be treated for federal income tax
purposes as comprising four REMICs (each, a "Trust REMIC" or, in the
alternative, Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the Lower-Tier REMIC
and the Upper-Tier REMIC, respectively). The Class X Interest and each Class of
LIBOR Certificates (other than the right of each Class of LIBOR Certificates to
receive Upper-Tier CarryForward Amounts including, but without duplication,
Basis Risk CarryForward Amounts and the obligation to pay Class IO Shortfalls)
represents ownership of a regular interest in a REMIC for purposes of the REMIC
Provisions. The Class R Certificates represent ownership of the sole class of
residual interest in each Trust REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date. The latest
possible maturity date for each Certificate is the latest date referenced in
Section 2.05. The Upper-Tier REMIC shall hold as assets the several classes of
uncertificated Lower-Tier Regular Interests, set out below. The Lower-Tier REMIC
shall hold as assets the several classes of uncertificated Pooling-Tier REMIC-2
Regular Interests. Pooling-Tier REMIC-2 shall hold as assets the several classes
of uncertificated Pooling-Tier REMIC-1 Regular Interests. Pooling-Tier REMIC-1
shall hold as assets the assets of the Trust Fund (exclusive of (i) the
Prepayment Premiums, (ii) the Interest Rate Swap Agreement, (iii) the Swap
Account, (iv) the Excess Reserve Fund Account, and (v) the right of the LIBOR
Certificates to receive Upper-Tier CarryForward Amounts including, but without
duplication, Basis Risk CarryForward Amounts and the obligation to pay Class IO
Shortfalls).
For federal income tax purposes, each Class of LIBOR Certificates
represents a beneficial ownership of a regular interest in the Upper-Tier REMIC,
the right to receive Upper-Tier CarryForward Amounts (including, but without
duplication, Basis Risk CarryForward Amounts), and the obligation to pay Class
IO Shortfalls, the Class X Certificates represent beneficial ownership of the
Class X Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
Swap Account, the Excess Reserve Fund Account and the right to receive Class IO
Shortfalls, and the Class P Certificates represent beneficial ownership of the
Prepayment Premiums, which portions of the Trust Fund shall be treated as a
grantor trust.
Pooling-Tier REMIC-1
--------------------
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class PT1-R
Interest is hereby designated as a regular interest in the Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 Interests with an "I" in their designation shall relate to
Loan Group I and Pooling Tier REMIC-1 Interests with a "II" in their designation
shall relate to Loan Group II. Pooling-Tier REMIC-1 shall also issue the Class
PT1-R Interest, which is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-1. The Class PT1-R Interest shall be represented
by the Class R Certificates, shall not have a principal balance and shall have
no interest rate.
Initial Pooling-Tier
Pooling-Tier REMIC-1 Pooling-Tier REMIC-1 REMIC-1 Principal
Interest Interest Rate Amount
------------------- -------------------- --------------------
Class PT1-I-1 (1) $ 22,105,259.29
Class PT1-I-2A (2) $ 9,151,175.72
Class PT1-I-2B (3) $ 9,151,175.72
Class PT1-I-3A (2) $ 8,106,176.41
Class PT1-I-3B (3) $ 8,106,176.41
Class PT1-I-4A (2) $ 7,967,254.92
Class PT1-I-4B (3) $ 7,967,254.92
Class PT1-I-5A (2) $ 7,450,967.16
Class PT1-I-5B (3) $ 7,450,967.16
Class PT1-I-6A (2) $ 7,188,644.20
Class PT1-I-6B (3) $ 7,188,644.20
Class PT1-I-7A (2) $ 6,938,382.94
Class PT1-I-7B (3) $ 6,938,382.94
Class PT1-I-8A (2) $ 6,699,307.91
Class PT1-I-8B (3) $ 6,699,307.91
Class PT1-I-9A (2) $ 6,470,584.89
Class PT1-I-9B (3) $ 6,470,584.89
Class PT1-I-10A (2) $ 6,251,299.47
Class PT1-I-10B (3) $ 6,251,299.47
Class PT1-I-11A (2) $ 6,040,807.65
Class PT1-I-11B (3) $ 6,040,807.65
Class PT1-I-12A (2) $ 5,837,752.69
Class PT1-I-12B (3) $ 5,837,752.69
Class PT1-I-13A (2) $ 5,641,838.95
Class PT1-I-13B (3) $ 5,641,838.95
Class PT1-I-14A (2) $ 5,426,756.68
Class PT1-I-14B (3) $ 5,426,756.68
Class PT1-I-15A (2) $ 5,197,139.87
Class PT1-I-15B (3) $ 5,197,139.87
Class PT1-I-16A (2) $ 4,972,347.27
Class PT1-I-16B (3) $ 4,972,347.27
Class PT1-I-17A (2) $ 4,757,303.96
Class PT1-I-17B (3) $ 4,757,303.96
Class PT1-I-18A (2) $ 4,551,606.56
Class PT1-I-18B (3) $ 4,551,606.56
Class PT1-I-19A (2) $ 4,354,849.45
Class PT1-I-19B (3) $ 4,354,849.45
Class PT1-I-20A (2) $ 4,210,280.99
Class PT1-I-20B (3) $ 4,210,280.99
Class PT1-I-21A (2) $ 19,075,606.25
Class PT1-I-21B (3) $ 19,075,606.25
Class PT1-I-22A (2) $ 42,098,237.78
Class PT1-I-22B (3) $ 42,098,237.78
Class PT1-I-23A (2) $ 1,257,604.17
Class PT1-I-23B (3) $ 1,257,604.17
Class PT1-I-24A (2) $ 1,207,006.01
Class PT1-I-24B (3) $ 1,207,006.01
Class PT1-I-25A (2) $ 1,158,468.17
Class PT1-I-25B (3) $ 1,158,468.17
Class PT1-I-26A (2) $ 1,111,905.86
Class PT1-I-26B (3) $ 1,111,905.86
Class PT1-I-27A (2) $ 1,067,236.56
Class PT1-I-27B (3) $ 1,067,236.56
Class PT1-I-28A (2) $ 1,024,393.83
Class PT1-I-28B (3) $ 1,024,393.83
Class PT1-I-29A (2) $ 983,334.10
Class PT1-I-29B (3) $ 983,334.10
Class PT1-I-30A (2) $ 943,885.51
Class PT1-I-30B (3) $ 943,885.51
Class PT1-I-31A (2) $ 906,038.87
Class PT1-I-31B (3) $ 906,038.87
Class PT1-I-32A (2) $ 869,730.03
Class PT1-I-32B (3) $ 869,730.03
Class PT1-I-33A (2) $ 912,930.29
Class PT1-I-33B (3) $ 912,930.29
Class PT1-I-34A (2) $ 8,408,516.33
Class PT1-I-34B (3) $ 8,408,516.33
Class PT1-I-35A (2) $ 2,434,693.14
Class PT1-I-35B (3) $ 2,434,693.14
Class PT1-I-36A (2) $ 318,102.86
Class PT1-I-36B (3) $ 318,102.86
Class PT1-I-37A (2) $ 307,452.90
Class PT1-I-37B (3) $ 307,452.90
Class PT1-I-38A (2) $ 297,146.72
Class PT1-I-38B (3) $ 297,146.72
Class PT1-I-39A (2) $ 287,184.31
Class PT1-I-39B (3) $ 287,184.31
Class PT1-I-40A (2) $ 277,542.74
Class PT1-I-40B (3) $ 277,542.74
Class PT1-I-41A (2) $ 268,238.07
Class PT1-I-41B (3) $ 268,238.07
Class PT1-I-42A (2) $ 259,222.17
Class PT1-I-42B (3) $ 259,222.17
Class PT1-I-43A (2) $ 250,501.90
Class PT1-I-43B (3) $ 250,501.90
Class PT1-I-44A (2) $ 242,065.82
Class PT1-I-44B (3) $ 242,065.82
Class PT1-I-45A (2) $ 233,911.63
Class PT1-I-45B (3) $ 233,911.63
Class PT1-I-46A (2) $ 226,023.29
Class PT1-I-46B (3) $ 226,023.29
Class PT1-I-47A (2) $ 218,396.21
Class PT1-I-47B (3) $ 218,396.21
Class PT1-I-48A (2) $ 211,021.22
Class PT1-I-48B (3) $ 211,021.22
Class PT1-I-49A (2) $ 203,891.46
Class PT1-I-49B (3) $ 203,891.46
Class PT1-I-50A (2) $ 196,997.75
Class PT1-I-50B (3) $ 196,997.75
Class PT1-I-51A (2) $ 190,330.94
Class PT1-I-51B (3) $ 190,330.94
Class PT1-I-52A (2) $ 183,884.13
Class PT1-I-52B (3) $ 183,884.13
Class PT1-I-53A (2) $ 177,655.04
Class PT1-I-53B (3) $ 177,655.04
Class PT1-I-54A (2) $ 171,629.92
Class PT1-I-54B (3) $ 171,629.92
Class PT1-I-55A (2) $ 4,804,698.19
Class PT1-I-55B (3) $ 4,804,698.19
Class PT1-II-1 (4) $ 26,121,784.71
Class PT1-II-2A (5) $ 10,813,944.28
Class PT1-II-2B (6) $ 10,813,944.28
Class PT1-II-3A (5) $ 9,579,068.59
Class PT1-II-3B (6) $ 9,579,068.59
Class PT1-II-4A (5) $ 9,414,905.08
Class PT1-II-4B (6) $ 9,414,905.08
Class PT1-II-5A (5) $ 8,804,807.84
Class PT1-II-5B (6) $ 8,804,807.84
Class PT1-II-6A (5) $ 8,494,820.80
Class PT1-II-6B (6) $ 8,494,820.80
Class PT1-II-7A (5) $ 8,199,087.06
Class PT1-II-7B (6) $ 8,199,087.06
Class PT1-II-8A (5) $ 7,916,572.09
Class PT1-II-8B (6) $ 7,916,572.09
Class PT1-II-9A (5) $ 7,646,290.11
Class PT1-II-9B (6) $ 7,646,290.11
Class PT1-II-10A (5) $ 7,387,160.53
Class PT1-II-10B (6) $ 7,387,160.53
Class PT1-II-11A (5) $ 7,138,422.35
Class PT1-II-11B (6) $ 7,138,422.35
Class PT1-II-12A (5) $ 6,898,472.31
Class PT1-II-12B (6) $ 6,898,472.31
Class PT1-II-13A (5) $ 6,666,961.05
Class PT1-II-13B (6) $ 6,666,961.05
Class PT1-II-14A (5) $ 6,412,798.32
Class PT1-II-14B (6) $ 6,412,798.32
Class PT1-II-15A (5) $ 6,141,460.13
Class PT1-II-15B (6) $ 6,141,460.13
Class PT1-II-16A (5) $ 5,875,822.73
Class PT1-II-16B (6) $ 5,875,822.73
Class PT1-II-17A (5) $ 5,621,706.04
Class PT1-II-17B (6) $ 5,621,706.04
Class PT1-II-18A (5) $ 5,378,633.44
Class PT1-II-18B (6) $ 5,378,633.44
Class PT1-II-19A (5) $ 5,146,125.55
Class PT1-II-19B (6) $ 5,146,125.55
Class PT1-II-20A (5) $ 4,975,289.01
Class PT1-II-20B (6) $ 4,975,289.01
Class PT1-II-21A (5) $ 22,541,643.75
Class PT1-II-21B (6) $ 22,541,643.75
Class PT1-II-22A (5) $ 49,747,487.22
Class PT1-II-22B (6) $ 49,747,487.22
Class PT1-II-23A (5) $ 1,486,110.83
Class PT1-II-23B (6) $ 1,486,110.83
Class PT1-II-24A (5) $ 1,426,318.99
Class PT1-II-24B (6) $ 1,426,318.99
Class PT1-II-25A (5) $ 1,368,961.83
Class PT1-II-25B (6) $ 1,368,961.83
Class PT1-II-26A (5) $ 1,313,939.14
Class PT1-II-26B (6) $ 1,313,939.14
Class PT1-II-27A (5) $ 1,261,153.44
Class PT1-II-27B (6) $ 1,261,153.44
Class PT1-II-28A (5) $ 1,210,526.17
Class PT1-II-28B (6) $ 1,210,526.17
Class PT1-II-29A (5) $ 1,162,005.90
Class PT1-II-29B (6) $ 1,162,005.90
Class PT1-II-30A (5) $ 1,115,389.49
Class PT1-II-30B (6) $ 1,115,389.49
Class PT1-II-31A (5) $ 1,070,666.13
Class PT1-II-31B (6) $ 1,070,666.13
Class PT1-II-32A (5) $ 1,027,759.97
Class PT1-II-32B (6) $ 1,027,759.97
Class PT1-II-33A (5) $ 1,078,809.71
Class PT1-II-33B (6) $ 1,078,809.71
Class PT1-II-34A (5) $ 9,936,343.67
Class PT1-II-34B (6) $ 9,936,343.67
Class PT1-II-35A (5) $ 2,877,076.86
Class PT1-II-35B (6) $ 2,877,076.86
Class PT1-II-36A (5) $ 375,902.14
Class PT1-II-36B (6) $ 375,902.14
Class PT1-II-37A (5) $ 363,317.10
Class PT1-II-37B (6) $ 363,317.10
Class PT1-II-38A (5) $ 351,138.28
Class PT1-II-38B (6) $ 351,138.28
Class PT1-II-39A (5) $ 339,365.69
Class PT1-II-39B (6) $ 339,365.69
Class PT1-II-40A (5) $ 327,972.26
Class PT1-II-40B (6) $ 327,972.26
Class PT1-II-41A (5) $ 316,976.93
Class PT1-II-41B (6) $ 316,976.93
Class PT1-II-42A (5) $ 306,322.83
Class PT1-II-42B (6) $ 306,322.83
Class PT1-II-43A (5) $ 296,018.10
Class PT1-II-43B (6) $ 296,018.10
Class PT1-II-44A (5) $ 286,049.18
Class PT1-II-44B (6) $ 286,049.18
Class PT1-II-45A (5) $ 276,413.37
Class PT1-II-45B (6) $ 276,413.37
Class PT1-II-46A (5) $ 267,091.71
Class PT1-II-46B (6) $ 267,091.71
Class PT1-II-47A (5) $ 258,078.79
Class PT1-II-47B (6) $ 258,078.79
Class PT1-II-48A (5) $ 249,363.78
Class PT1-II-48B (6) $ 249,363.78
Class PT1-II-49A (5) $ 240,938.54
Class PT1-II-49B (6) $ 240,938.54
Class PT1-II-50A (5) $ 232,792.25
Class PT1-II-50B (6) $ 232,792.25
Class PT1-II-51A (5) $ 224,914.06
Class PT1-II-51B (6) $ 224,914.06
Class PT1-II-52A (5) $ 217,295.87
Class PT1-II-52B (6) $ 217,295.87
Class PT1-II-53A (5) $ 209,934.96
Class PT1-II-53B (6) $ 209,934.96
Class PT1-II-54A (5) $ 202,815.08
Class PT1-II-54B (6) $ 202,815.08
Class PT1-II-55A (5) $ 5,677,711.81
Class PT1-II-55B (6) $ 5,677,711.81
Class PT1-R (7) (7)
--------------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of (i)
2 and (ii) the Pooling-Tier REMIC-1 Loan Group I WAC Rate, subject to a
maximum rate of 9.6000%.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if any,
of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group I
WAC Rate over (B) 9.6000%.
(4) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of (i)
2 and (ii) the Pooling-Tier REMIC-1 Loan Group II WAC Rate, subject to a
maximum rate of 9.6000%.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if any,
of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan Group II
WAC Rate over (B) 9.6000%.
(7) The Class PT1-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the Trustee shall first pay from the
Trust Fund and charge as an expense of Pooling-Tier REMIC-1 all expenses of the
Trust for such Distribution Date. Such expense, other than Servicing Fees and
Trustee Fees, shall be allocated in the same manner as Realized Losses.
On each Distribution Date, the interest distributable in respect
of the Mortgage Loans from the related Loan Group for such Distribution Date
shall be deemed to be distributed to the Pooling-Tier REMIC-1 Regular Interests
at the rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans shall be
allocated to the outstanding Pooling-Tier REMIC-1 Regular Interest relating to
the Group I Mortgage Loans with the lowest numerical denomination until the
Pooling-Tier REMIC-1 Principal Amount of such interest is reduced to zero,
provided that, with respect to Pooling-Tier REMIC-1 Regular Interests relating
to Loan Group I with the same numerical denomination, such Realized Losses,
Subsequent Recoveries and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans shall be
allocated to the outstanding Pooling-Tier REMIC-1 Regular Interest relating to
the Group II Mortgage Loans with the lowest numerical denomination until the
Pooling-Tier REMIC-1 Principal Amount of such interest is reduced to zero,
provided that, with respect to Pooling-Tier REMIC-1 Regular Interests relating
to Loan Group II with the same numerical denomination, such Realized Losses,
Subsequent Recoveries and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-1 Regular Interests, until the Pooling-Tier
REMIC-1 Principal Amount of such interest is reduced to zero.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class PT2-R
Interest, is hereby designated as a regular interest in Pooling-Tier REMIC-2.
Pooling-Tier REMIC-2 Interests with an "I" in their designation shall relate to
the Group I Mortgage Loans and Pooling Tier REMIC-2 Interests with a "II" in
their designation shall relate to the Group II Mortgage Loans. The Class PT2-R
Interest is hereby designated as the sole class of residual interest in
Pooling-Tier REMIC-2 and shall be represented by the Class R Certificates.
Corresponding
Pooling-Tier Corresponding Corresponding Scheduled
REMIC-2 Pooling-Tier Pooling-Tier Pooling-Tier Crossover
Pooling-Tier Interest REMIC-2 Initial REMIC-2 IO REMIC-1 Regular Distribution
REMIC-2 Interest Rate Principal Amount Interest Interest Date
---------------- ------------ --------------- ---------------- --------------- ------------
Class PT2-I-1 (1) $ 22,105,259.29 N/A N/A N/A
Class PT2-I-2A (2) $ 9,151,175.72 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $ 9,151,175.72 N/A N/A N/A
Class PT2-I-3A (2) $ 8,106,176.41 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $ 8,106,176.41 N/A N/A N/A
Class PT2-I-4A (2) $ 7,967,254.92 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $ 7,967,254.92 N/A N/A N/A
Class PT2-I-5A (2) $ 7,450,967.16 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $ 7,450,967.16 N/A N/A N/A
Class PT2-I-6A (2) $ 7,188,644.20 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $ 7,188,644.20 N/A N/A N/A
Class PT2-I-7A (2) $ 6,938,382.94 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $ 6,938,382.94 N/A N/A N/A
Class PT2-I-8A (2) $ 6,699,307.91 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $ 6,699,307.91 N/A N/A N/A
Class PT2-I-9A (2) $ 6,470,584.89 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $ 6,470,584.89 N/A N/A N/A
Class PT2-I-10A (2) $ 6,251,299.47 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $ 6,251,299.47 N/A N/A N/A
Class PT2-I-11A (2) $ 6,040,807.65 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $ 6,040,807.65 N/A N/A N/A
Class PT2-I-12A (2) $ 5,837,752.69 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $ 5,837,752.69 N/A N/A N/A
Class PT2-I-13A (2) $ 5,641,838.95 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $ 5,641,838.95 N/A N/A N/A
Class PT2-I-14A (2) $ 5,426,756.68 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $ 5,426,756.68 N/A N/A N/A
Class PT2-I-15A (2) $ 5,197,139.87 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $ 5,197,139.87 N/A N/A N/A
Class PT2-I-16A (2) $ 4,972,347.27 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $ 4,972,347.27 N/A N/A N/A
Class PT2-I-17A (2) $ 4,757,303.96 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $ 4,757,303.96 N/A N/A N/A
Class PT2-I-18A (2) $ 4,551,606.56 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $ 4,551,606.56 N/A N/A N/A
Class PT2-I-19A (2) $ 4,354,849.45 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $ 4,354,849.45 N/A N/A N/A
Class PT2-I-20A (2) $ 4,210,280.99 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $ 4,210,280.99 N/A N/A N/A
Class PT2-I-21A (2) $ 19,075,606.25 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $ 19,075,606.25 N/A N/A N/A
Class PT2-I-22A (2) $ 42,098,237.78 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $ 42,098,237.78 N/A N/A N/A
Class PT2-I-23A (2) $ 1,257,604.17 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $ 1,257,604.17 N/A N/A N/A
Class PT2-I-24A (2) $ 1,207,006.01 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $ 1,207,006.01 N/A N/A N/A
Class PT2-I-25A (2) $ 1,158,468.17 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $ 1,158,468.17 N/A N/A N/A
Class PT2-I-26A (2) $ 1,111,905.86 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $ 1,111,905.86 N/A N/A N/A
Class PT2-I-27A (2) $ 1,067,236.56 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $ 1,067,236.56 N/A N/A N/A
Class PT2-I-28A (2) $ 1,024,393.83 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $ 1,024,393.83 N/A N/A N/A
Class PT2-I-29A (2) $ 983,334.10 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $ 983,334.10 N/A N/A N/A
Class PT2-I-30A (2) $ 943,885.51 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $ 943,885.51 N/A N/A N/A
Class PT2-I-31A (2) $ 906,038.87 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $ 906,038.87 N/A N/A N/A
Class PT2-I-32A (2) $ 869,730.03 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $ 869,730.03 N/A N/A N/A
Class PT2-I-33A (2) $ 912,930.29 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $ 912,930.29 N/A N/A N/A
Class PT2-I-34A (2) $ 8,408,516.33 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $ 8,408,516.33 N/A N/A N/A
Class PT2-I-35A (2) $ 2,434,693.14 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $ 2,434,693.14 N/A N/A N/A
Class PT2-I-36A (2) $ 318,102.86 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $ 318,102.86 N/A N/A N/A
Class PT2-I-37A (2) $ 307,452.90 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $ 307,452.90 N/A N/A N/A
Class PT2-I-38A (2) $ 297,146.72 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $ 297,146.72 N/A N/A N/A
Class PT2-I-39A (2) $ 287,184.31 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $ 287,184.31 N/A N/A N/A
Class PT2-I-40A (2) $ 277,542.74 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $ 277,542.74 N/A N/A N/A
Class PT2-I-41A (2) $ 268,238.07 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $ 268,238.07 N/A N/A N/A
Class PT2-I-42A (2) $ 259,222.17 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $ 259,222.17 N/A N/A N/A
Class PT2-I-43A (2) $ 250,501.90 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $ 250,501.90 N/A N/A N/A
Class PT2-I-44A (2) $ 242,065.82 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $ 242,065.82 N/A N/A N/A
Class PT2-I-45A (2) $ 233,911.63 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $ 233,911.63 N/A N/A N/A
Class PT2-I-46A (2) $ 226,023.29 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $ 226,023.29 N/A N/A N/A
Class PT2-I-47A (2) $ 218,396.21 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $ 218,396.21 N/A N/A N/A
Class PT2-I-48A (2) $ 211,021.22 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $ 211,021.22 N/A N/A N/A
Class PT2-I-49A (2) $ 203,891.46 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $ 203,891.46 N/A N/A N/A
Class PT2-I-50A (2) $ 196,997.75 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $ 196,997.75 N/A N/A N/A
Class PT2-I-51A (2) $ 190,330.94 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $ 190,330.94 N/A N/A N/A
Class PT2-I-52A (2) $ 183,884.13 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $ 183,884.13 N/A N/A N/A
Class PT2-I-53A (2) $ 177,655.04 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $ 177,655.04 N/A N/A N/A
Class PT2-I-54A (2) $ 171,629.92 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $ 171,629.92 N/A N/A N/A
Class PT2-I-55A (2) $ 4,804,698.19 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $ 4,804,698.19 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A December 2005
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A January 2006
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A February 2006
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A March 2006
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A April 2006
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A May 2006
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A June 2006
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A July 2006
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A August 2006
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A September 2006
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A November 2006
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A December 2006
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A December 2006
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A January 2007
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A February 2007
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A March 2007
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A April 2007
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A May 2007
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A June 2007
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A July 2007
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A August 2007
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A September 2007
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A November 2007
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A December 2007
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A December 2007
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A January 2008
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A February 2008
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A March 2008
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A April 2008
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A May 2008
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A June 2008
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A July 2008
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A August 2008
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A September 2008
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A November 2008
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A December 2008
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A December 2008
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A January 2009
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A February 2009
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A March 2009
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A April 2009
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A May 2009
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A June 2009
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A July 2009
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A August 2009
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A September 2009
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A November 2009
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A December 2009
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A December 2009
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A January 2010
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A February 2010
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A March 2010
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A April 2010
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A May 2010
Class PT2-II-1 (5) $ 26,121,784.71 N/A N/A N/A
Class PT2-II-2A (6) $ 10,813,944.28 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $ 10,813,944.28 N/A N/A N/A
Class PT2-II-3A (6) $ 9,579,068.59 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $ 9,579,068.59 N/A N/A N/A
Class PT2-II-4A (6) $ 9,414,905.08 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $ 9,414,905.08 N/A N/A N/A
Class PT2-II-5A (6) $ 8,804,807.84 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $ 8,804,807.84 N/A N/A N/A
Class PT2-II-6A (6) $ 8,494,820.80 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $ 8,494,820.80 N/A N/A N/A
Class PT2-II-7A (6) $ 8,199,087.06 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $ 8,199,087.06 N/A N/A N/A
Class PT2-II-8A (6) $ 7,916,572.09 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $ 7,916,572.09 N/A N/A N/A
Class PT2-II-9A (6) $ 7,646,290.11 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $ 7,646,290.11 N/A N/A N/A
Class PT2-II-10A (6) $ 7,387,160.53 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $ 7,387,160.53 N/A N/A N/A
Class PT2-II-11A (6) $ 7,138,422.35 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $ 7,138,422.35 N/A N/A N/A
Class PT2-II-12A (6) $ 6,898,472.31 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $ 6,898,472.31 N/A N/A N/A
Class PT2-II-13A (6) $ 6,666,961.05 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $ 6,666,961.05 N/A N/A N/A
Class PT2-II-14A (6) $ 6,412,798.32 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $ 6,412,798.32 N/A N/A N/A
Class PT2-II-15A (6) $ 6,141,460.13 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $ 6,141,460.13 N/A N/A N/A
Class PT2-II-16A (6) $ 5,875,822.73 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $ 5,875,822.73 N/A N/A N/A
Class PT2-II-17A (6) $ 5,621,706.04 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $ 5,621,706.04 N/A N/A N/A
Class PT2-II-18A (6) $ 5,378,633.44 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $ 5,378,633.44 N/A N/A N/A
Class PT2-II-19A (6) $ 5,146,125.55 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $ 5,146,125.55 N/A N/A N/A
Class PT2-II-20A (6) $ 4,975,289.01 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $ 4,975,289.01 N/A N/A N/A
Class PT2-II-21A (6) $ 22,541,643.75 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $ 22,541,643.75 N/A N/A N/A
Class PT2-II-22A (6) $ 49,747,487.22 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $ 49,747,487.22 N/A N/A N/A
Class PT2-II-23A (6) $ 1,486,110.83 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $ 1,486,110.83 N/A N/A N/A
Class PT2-II-24A (6) $ 1,426,318.99 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $ 1,426,318.99 N/A N/A N/A
Class PT2-II-25A (6) $ 1,368,961.83 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $ 1,368,961.83 N/A N/A N/A
Class PT2-II-26A (6) $ 1,313,939.14 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $ 1,313,939.14 N/A N/A N/A
Class PT2-II-27A (6) $ 1,261,153.44 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $ 1,261,153.44 N/A N/A N/A
Class PT2-II-28A (6) $ 1,210,526.17 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $ 1,210,526.17 N/A N/A N/A
Class PT2-II-29A (6) $ 1,162,005.90 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $ 1,162,005.90 N/A N/A N/A
Class PT2-II-30A (6) $ 1,115,389.49 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $ 1,115,389.49 N/A N/A N/A
Class PT2-II-31A (6) $ 1,070,666.13 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $ 1,070,666.13 N/A N/A N/A
Class PT2-II-32A (6) $ 1,027,759.97 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $ 1,027,759.97 N/A N/A N/A
Class PT2-II-33A (6) $ 1,078,809.71 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $ 1,078,809.71 N/A N/A N/A
Class PT2-II-34A (6) $ 9,936,343.67 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $ 9,936,343.67 N/A N/A N/A
Class PT2-II-35A (6) $ 2,877,076.86 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $ 2,877,076.86 N/A N/A N/A
Class PT2-II-36A (6) $ 375,902.14 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $ 375,902.14 N/A N/A N/A
Class PT2-II-37A (6) $ 363,317.10 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $ 363,317.10 N/A N/A N/A
Class PT2-II-38A (6) $ 351,138.28 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $ 351,138.28 N/A N/A N/A
Class PT2-II-39A (6) $ 339,365.69 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $ 339,365.69 N/A N/A N/A
Class PT2-II-40A (6) $ 327,972.26 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $ 327,972.26 N/A N/A N/A
Class PT2-II-41A (6) $ 316,976.93 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $ 316,976.93 N/A N/A N/A
Class PT2-II-42A (6) $ 306,322.83 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $ 306,322.83 N/A N/A N/A
Class PT2-II-43A (6) $ 296,018.10 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $ 296,018.10 N/A N/A N/A
Class PT2-II-44A (6) $ 286,049.18 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $ 286,049.18 N/A N/A N/A
Class PT2-II-45A (6) $ 276,413.37 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $ 276,413.37 N/A N/A N/A
Class PT2-II-46A (6) $ 267,091.71 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $ 267,091.71 N/A N/A N/A
Class PT2-II-47A (6) $ 258,078.79 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $ 258,078.79 N/A N/A N/A
Class PT2-II-48A (6) $ 249,363.78 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $ 249,363.78 N/A N/A N/A
Class PT2-II-49A (6) $ 240,938.54 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $ 240,938.54 N/A N/A N/A
Class PT2-II-50A (6) $ 232,792.25 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $ 232,792.25 N/A N/A N/A
Class PT2-II-51A (6) $ 224,914.06 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $ 224,914.06 N/A N/A N/A
Class PT2-II-52A (6) $ 217,295.87 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $ 217,295.87 N/A N/A N/A
Class PT2-II-53A (6) $ 209,934.96 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $ 209,934.96 N/A N/A N/A
Class PT2-II-54A (6) $ 202,815.08 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $ 202,815.08 N/A N/A N/A
Class PT2-II-55A (6) $ 5,677,711.81 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $ 5,677,711.81 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A December 2005
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A January 2006
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A February 2006
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A March 2006
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A April 2006
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A May 2006
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A June 2006
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A July 2006
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A August 2006
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A September 2006
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A November 2006
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A December 2006
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A December 2006
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A January 2007
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A February 2007
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A March 2007
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A April 2007
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A May 2007
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A June 2007
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A July 2007
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A August 2007
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A September 2007
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A November 2007
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A December 2007
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A December 2007
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A January 2008
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A February 2008
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A March 2008
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A April 2008
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A May 2008
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A June 2008
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A July 2008
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A August 2008
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A September 2008
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A November 2008
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A December 2008
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A December 2008
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A January 2009
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A February 2009
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A March 2009
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A April 2009
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A May 2009
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A June 2009
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A July 2009
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A August 2009
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A September 2009
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A November 2009
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A December 2009
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A December 2009
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A January 2010
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A February 2010
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A March 2010
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A April 2010
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A May 2010
Class PT2-R (8) (8) N/A N/A N/A
---------------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having an "A" in
their class designation, provided that, on each Distribution Date on which
interest is distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest, this Pooling-Tier REMIC-2 Regular Interest shall bear interest at
a per annum rate equal to Swap LIBOR subject to a maximum rate equal to the
weighted average of the Pooling-Tier REMIC-1 Interest Rates on the
Pooling-Tier REMIC-1 Regular Interests relating to Loan Group I and having
an "A" in their class designation.
(3) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having a "B" in their
class designation.
(4) Each Pooling-Tier REMIC-2 IO is an interest-only interest and does not have
a principal balance but has a notional balance ("Pooling-Tier REMIC-2 IO
Notional Balance") equal to the Pooling-Tier REMIC-2 Principal Amount of the
Corresponding Pooling-Tier REMIC-1 Regular Interest. From the Closing Date
through and including the Corresponding Actual Crossover Distribution Date,
each Pooling-Tier REMIC-2 IO Interest shall be entitled to receive interest
that accrues on the Corresponding Pooling-Tier REMIC-1 Regular Interest at a
rate equal to the excess, if any, of (i) the Pooling-Tier REMIC-1 Interest
Rate for the Corresponding Pooling-Tier REMIC-1 Regular Interest over (ii)
Swap LIBOR. After the Corresponding Actual Crossover Distribution Date, the
Pooling-Tier REMIC-2 IO Interest shall not accrue interest.
(5) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(6) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and having
an "A" in their class designation, provided that, on each Distribution Date
on which interest is distributable on the Corresponding Pooling-Tier REMIC-2
IO Interest, this Pooling-Tier REMIC-2 Regular Interest shall bear interest
at a per annum rate equal to Swap LIBOR subject to a maximum rate equal to
the weighted average of the Pooling-Tier REMIC-1 Interest Rates on the
Pooling-Tier REMIC-1 Regular Interests relating to Loan Group II and having
an "A" in their class designation.
(7) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group II and having a "B" in
their class designation.
(8) The Class PT2-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in respect
of the Mortgage Loans from the related Loan Group for such Distribution Date
shall be distributed to the Pooling-Tier REMIC-2 Regular Interests at the
Pooling-Tier REMIC-2 Interest Rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group I Mortgage Loans shall be
allocated to the then outstanding Pooling-Tier REMIC-2 Regular Interests (other
than the Pooling-Tier REMIC-2 IO Interests) relating to the Group I Mortgage
Loans with the lowest numerical denomination until the Pooling-Tier REMIC-2
Principal Amount of such interest is reduced to zero, provided that, for
Pooling-Tier REMIC-2 Regular Interests relating to the Group I Mortgage Loans
with the same numerical denomination, such Realized Losses, Subsequent
Recoveries and payments of principal shall be allocated pro rata between such
Pooling-Tier REMIC-2 Regular Interests, until the Pooling-Tier REMIC-2 Principal
Amount of such interest is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Group II Mortgage Loans shall be
allocated to the then outstanding Pooling-Tier REMIC-2 Regular Interests (other
than the Pooling-Tier REMIC-2 IO Interests) relating to Loan Group II with the
lowest numerical denomination until the Pooling-Tier REMIC-2 Principal Amount of
such interest is reduced to zero, provided that, for Pooling-Tier REMIC-2
Regular Interests relating to the Group II Mortgage Loans with the same
numerical denomination, such Realized Losses and payments of principal shall be
allocated pro rata between such Pooling-Tier REMIC-2 Regular Interests, until
the Pooling-Tier REMIC-2 Principal Amount of such interest is reduced to zero.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and
each such interest, other than the Class LT-R Interest, is hereby designated as
a regular interest in the Lower-Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Lower-Tier REMIC Lower-Tier Initial Lower-Tier Principal Upper-Tier REMIC
Interest Interest Rate Amount Regular Interest
---------------- ------------- ---------------------------- ----------------
Class LT-A-1 (1) 1/2 initial Class Certificate A-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2a (1) 1/2 initial Class Certificate A-2a
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2b (1) 1/2 initial Class Certificate A-2b
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2c (1) 1/2 initial Class Certificate A-2c
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-1 (1) 1/2 initial Class Certificate M-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-2 (1) 1/2 initial Class Certificate M-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-3 (1) 1/2 initial Class Certificate M-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-4 (1) 1/2 initial Class Certificate M-4
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-5 (1) 1/2 initial Class Certificate M-5
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-6 (1) 1/2 initial Class Certificate M-6
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-1 (1) 1/2 initial Class Certificate B-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-2 (1) 1/2 initial Class Certificate B-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-3 (1) 1/2 initial Class Certificate B-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance N/A
plus 1/2 Subordinated Amount, less
the aggregate initial Lower-Tier
Principal Amount of Class
LT-Group I and Class LT Group II
Class LT-Group I (2) 0.001% aggregate Stated Principal N/A
Balance of Group I Mortgage
Loans(4)
Class LT-Group II (3) 0.001% aggregate Stated Principal N/A
Balance of Group II Mortgage
Loans(4)
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) N/A
-----------------------------
(1) The interest rate with respect to any Distribution Date for these interests
is a per annum variable rate equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling Tier REMIC-2 IO Interests) relating to the
Group I Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling Tier REMIC-2 IO Interests) relating to the
Group II Mortgage Loans.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of these
Lower-Tier Regular Interests shall be rounded to eight decimal places.
(5) This Lower-Tier Regular Interest is an interest-only interest and does not
have a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(6) The Class LT-R Interest is the sole class of residual interest in the
Lower-Tier REMIC and it does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a
regular interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2a, Class
LT-A-2b, Class LT-A-2c, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4,
Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class LT-B-3
Interests are hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed Classes").
On each Distribution Date, 50% of the increase in the
Subordinated Amount shall be payable as a reduction of the Lower-Tier Principal
Amount of the LT-Accretion Directed Classes (each such Class will be reduced by
an amount equal to 50% of any increase in the Subordinated Amount that is
attributable to a reduction in the Class Certificate Balance of its
Corresponding Class) and shall be accrued and added to the Lower-Tier Principal
Amount of the Class LT-Accrual Interest. On each Distribution Date, the increase
in the Lower-Tier Principal Amount of the Class LT-Accrual Interest shall not
exceed interest accruals for such Distribution Date for the Class LT-Accrual
Interest. In the event that: (i) 50% of the increase in the Subordinated Amount
exceeds (ii) interest accruals on the Class LT-Accrual Interest for such
Distribution Date, the excess for such Distribution Date (accumulated with all
such excesses for all prior Distribution Dates) will be added to any increase in
the Subordinated Amount for purposes of determining the amount of interest
accrual on the Class LT-Accrual Interest payable as principal on the
LT-Accretion Directed Classes on the next Distribution Date pursuant to the
first sentence of this paragraph. All payments of scheduled principal and
prepayments of principal generated by the Mortgage Loans and all Subsequent
Recoveries allocable to principal shall be allocated (i) 50% to the Class
LT-Accrual Interest, the Class LT-Group I Interest and Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in the
manner described below) and (ii) 50% to the LT-Accretion Directed Classes (such
principal payments and Subsequent Recoveries shall be allocated among such
LT-Accretion Directed Classes in an amount equal to 50% of the principal amounts
and Subsequent Recoveries allocated to their respective Corresponding Classes),
until paid in full. Notwithstanding the above, principal payments allocated to
the Class X Interest that result in the reduction in the Subordinated Amount
shall be allocated to the Class LT-Accrual Interest (until paid in full).
Realized Losses shall be applied so that after all distributions have been made
on each Distribution Date (i) the Lower-Tier Principal Amount of each of the
LT-Accretion Directed Classes is equal to 50% of the Class Certificate Balance
of their Corresponding Class, and (ii) the Class LT-Accrual Interest, the Class
LT-Group I Interest and the Class LT-Group II Interest (and further allocated
among these Lower-Tier Regular Interests in the manner described below) is equal
to 50% of the aggregate Stated Principal Balance of the Mortgage Loans plus 50%
of the Subordinated Amount. Any increase in the Class Certificate Balance of a
Class of Offered Certificates as a result of a Subsequent Recovery shall
increase the Lower-Tier Principal Amount of the Corresponding Lower-Tier Regular
Interest by 50% of such increase, and the remaining 50% of such increase shall
increase the Lower-Tier Principal Amount of the Class LT-Accrual Interest, the
Class LT-Group I Interest and the Class LT-Group II Interest (such increase
shall be further allocated among such Lower-Tier Regular Interests in the manner
described below). As among the Class LT-Accrual Interest, the Class LT-Group I
Interest and the Class LT-Group II Interest, all payments of scheduled principal
and prepayments of principal generated by the Mortgage Loans, all Subsequent
Recoveries and all Realized Losses, allocable to such Lower-Tier Regular
Interests and all increases in the Lower-Tier Principal Amount of such
Lower-Tier Regular Interests as a result of Subsequent Recoveries shall be
allocated (i) to the Class LT-Group I Interest and the Class LT-Group II
Interest, each from the related Loan Group so that their respective Lower-Tier
Principal Amounts (computed to at least eight decimal places) are equal to
0.001% of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group and (ii) the remainder to the Class LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and
each such interest, other than the Class UT-R Interest, is hereby designated as
a regular interest in the Upper-Tier REMIC. The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Upper-Tier REMIC Upper-Tier Initial Principal Corresponding Class
Interest Interest Rate Upper-Tier Amount of Certificates
---------------- ------------- ----------------- -------------------
Class A-1 (1) $ 335,337,000 Class A-1
Class A-2a (2) $ 256,767,000 Class A-2a
Class A-2b (2) $ 81,000,000 Class A-2b
Class A-2c (2) $ 58,500,000 Class A-2c
Class M-1 (3) $ 37,135,000 Class M-1
Class M-2 (3) $ 33,758,000 Class M-2
Class M-3 (3) $ 24,114,000 Class M-3
Class M-4 (3) $ 17,844,000 Class M-4
Class M-5 (3) $ 16,880,000 Class M-5
Class M-6 (3) $ 14,950,000 Class M-6
Class B-1 (3) $ 16,397,000 Class B-1
Class B-2 (3) $ 11,575,000 Class B-2
Class B-3 (3) $ 12,539,000 Class B-3
Class IO (4) (2) N/A
Class X (5) (3) Class X
Class UT-R (6) (4) Class R
-----------------
(1) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group I Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group I Interest (the "Upper-Tier REMIC Loan Group I Rate") and
(ii) the Upper-Tier REMIC WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group II Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group II Interest (the "Upper-Tier REMIC Loan Group II Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(3) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the WAC Cap) for the Corresponding Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(4) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class IO Interest shall be entitled
to receive all interest distributable on the Class LT-IO Interest. This
interest shall be beneficially owned by the holders of the Class X
Certificates and shall be held as an asset of the Swap Account.
(5) The Class X Interest has an initial principal balance of $47,744,874 but
will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the Lower-Tier Principal Amounts of the Lower-Tier Regular Interests (other
than the Class LT-IO Interest) as of the first day of the related Interest
Accrual Period. With respect to any Interest Accrual Period, the Class X
Interest shall bear interest at a rate equal to the excess, if any, of the
Upper-Tier REMIC WAC Rate over the product of (i) 2 and (ii) the weighted
average of the Lower-Tier Interest Rates of the Lower-Tier REMIC Interests
(other than the Class LT-IO Interest), where the Lower-Tier Interest Rate on
each of the Class LT-Accrual Interest, Class LT-Group I Interest and Class
LT-Group II Interest is subject to a cap equal to zero and each LT-Accretion
Directed Class is subject to a cap equal to the Upper-Tier Interest Rate on
its Corresponding Class of Upper-Tier Regular Interest. With respect to any
Distribution Date, interest that so accrues on the notional principal
balance of the Class X Interest shall be deferred in an amount equal to any
increase in the Subordinated Amount on such Distribution Date. Such deferred
interest shall not itself bear interest.
(6) The Class UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of
the Lower-Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper-Tier REMIC at the rates shown above,
provided that the Class IO Interest shall be entitled to receive interest before
any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper-Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
The Certificates
----------------
Class Pass-Through Class Certificate
Class Designation Rate Balance
----------------- ------------------ -----------------
Class A-1 (1) $ 335,337,000
Class A-2a (2) $ 256,767,000
Class A-2b (3) $ 81,000,000
Class A-2c (4) $ 58,500,000
Class M-1 (5) $ 37,135,000
Class M-2 (5) $ 33,758,000
Class M-3 (5) $ 24,114,000
Class M-4 (5) $ 17,844,000
Class M-5 (5) $ 16,880,000
Class M-6 (5) $ 14,950,000
Class B-1 (5) $ 16,397,000
Class B-2 (5) $ 11,575,000
Class B-3 (5) $ 12,539,000
Class X (6) $ 0(6)
Class R (7) $ 0(7)
---------------------
(1) The Class A-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group I Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group I Cap and (iii) the WAC Cap.
(2) The Class A-2a Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(3) The Class A-2b Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(4) The Class A-2c Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(5) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
B-1, Class B-2 and Class B-3 Interests will bear interest during each
Interest Accrual Period at a per annum rate equal to (a) on or prior to the
Optional Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin, and (ii) the WAC Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin, and (ii) the WAC Cap.
(6) The Class X Certificates will represent beneficial ownership of the Class X
Interest, the Class IO Interest, the Interest Rate Swap Agreement, the right
to Class IO Shortfalls and amounts in the Excess Reserve Fund Account and
the Swap Account, subject to the obligation to make payments from the Excess
Reserve Fund Account in respect of Basis Risk CarryForward Amounts and
amounts in the Swap Account subject to the obligation to make Net Swap
Payments and Basis Risk CarryForward Amounts. For federal income tax
purposes, the Trustee will treat a Class X Certificateholder's obligation to
make payments from the Excess Reserve Fund Account or the Swap Account as
payments made pursuant to an interest rate cap contract written by the Class
X Certificateholders in favor of each Class of Offered Certificates. Such
rights of the Class X Certificateholders and Offered Certificateholders
shall be treated as held in a portion of the Trust Fund that is treated as a
grantor trust under subpart E, Part I of subchapter J of the Code.
(7) The Class UT-R Interest does not have an interest rate or a principal
balance.
(8) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and the Swap Account
in respect of any Basis Risk CarryForward Amounts. Each of these
Certificates will also be subject to the obligation to pay Class IO
Shortfalls as described in Section 8.13. For federal income tax purposes,
any amount distributed on the Offered Certificates on any such Distribution
Date in excess of the amount distributable on their Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date shall be treated as
having been paid from the Excess Reserve Fund Account or the Swap Account,
as applicable, and any amount distributable on such Corresponding Class of
Upper-Tier Regular Interest on such Distribution Date in excess of the
amount distributable on the Offered Certificates on such Distribution Date
shall be treated as having been paid to the Swap Account, all pursuant to,
and as further provided in, Section 8.13. For federal income tax purposes,
the Trustee will treat a Certificateholder's right to receive payments from
the Excess Reserve Fund Account or the Swap Account as payments made
pursuant to an interest rate cap contract written by the Class X
Certificateholders.
The minimum denomination for each Class of Certificates, other
than the Class P, Class R and the Class X Certificates, will be $25,000 with
integral multiples of $1 in excess thereof. The minimum denomination for the
Class P and the Class X Certificates will each be a 1% Percentage Interest in
such Class. The Class R Certificate will represent a 100% Percentage Interest in
such Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates............ All Classes of Certificates other
than the Physical Certificates.
Class A Certificates............... Class X-0, Xxxxx X-0x, Xxxxx X-0x
and Class A-2c Certificates.
Delay Certificates................. None.
ERISA-Restricted Certificates...... Class R Certificates, Class P
Certificates and Class X
Certificates; any certificate with a
rating below the lowest applicable
permitted rating under the
Underwriters' Exemption.
LIBOR Certificates................. Class A and Subordinated \
Certificates.
Non-Delay Certificates............. Class A, Class X and
Subordinated Certificates.
Offered Certificates............... LIBOR Certificates.
Physical Certificates.............. Class P, Class X and
Class R Certificates.
Private Certificates............... Class P, Class X and
Class R Certificates.
Rating Agencies.................... Fitch, Xxxxx'x and
Standard & Poor's.
Regular Certificates............... All Classes of
Certificates other than the
Class P and Class R
Certificates.
Residual Certificates.............. Class R Certificates.
Subordinated Certificates.......... Class M-1, Class M-2,
Class M-3, Class M-4, Class
M-5, Class M-6, Class B-1,
Class B-2 and Class B-3
Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Accounts, the Distribution
Account, any Escrow Account or the Excess Reserve Fund Account. Each Account
shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Due Date on which the related Mortgage Rate adjusts as set forth in the
related Mortgage Note and each Due Date thereafter on which the Mortgage Rate
adjusts as set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom any Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any Distribution Date, the aggregate amount held in each Collection Account at
the close of business on the related Determination Date on account of (i)
Principal Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation
Proceeds on the Mortgage Loans received after the end of the related Prepayment
Period and (ii) all Scheduled Payments on the Mortgage Loans due after the end
of the related Due Period.
Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class Certificate Balance of
the LIBOR Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
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 of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicers on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by the Servicers
during the related Prepayment Period (in each case, net of unreimbursed expenses
incurred in connection with a liquidation or foreclosure and unreimbursed
Advances, if any); (iii) all partial or full prepayments on the Mortgage Loans
received by the Servicers during the related Prepayment Period together with all
Compensating Interest, if applicable, thereon (excluding any Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to the
substitutions of Mortgage Loans that occur with respect to such Distribution
Date; (v) amounts received with respect to such Distribution Date as the
Repurchase Price in respect of a Mortgage Loan repurchased with respect to such
Distribution Date; (vi) the proceeds received with respect to the termination of
the Trust Fund pursuant to clause (a) of Section 9.01; and (vii) the Closing
Date Deposit Amount; reduced by (y) amounts in reimbursement for Advances
previously made with respect to the Mortgage Loans and other amounts as to which
the Servicers, the Depositor, the Trustee, or the Custodian are entitled to be
paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the Accrued
Certificate Interest Distribution Amount such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such Pass-Through
Rate not been subject to any Loan Group Cap or WAC Cap (that is, had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin on
such Class of Certificates for such Distribution Date and the resulting amount
being reduced by allocated Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls) over (ii) the Accrued Certificate Interest Distribution
Amount received on such Distribution Date such Class of Certificates at, with
respect to each Class of Group I Class A Certificates, the lesser of the Loan
Group I Cap or the WAC Cap, with respect to each Class of Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and with
respect to each other Class of LIBOR Certificates, the WAC Cap, as applicable,
for such Distribution Date and (B) the Basis Risk CarryForward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments from the Excess Reserve Fund Account or any
Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended
from time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii)
a day on which banking and savings and loan institutions, in (a) the States of
New York, California, Texas, New Jersey or Delaware, (b) a State in which any
Servicer's servicing operations are located, or (c) the State in which the
Trustee's operations are located, are authorized or obligated by law or
executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee
in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P or Class R Certificates, at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Certificates, reduced by any Applied Realized Loss Amounts allocated to
such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of the Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date). The
Class X, Class P and Class R Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any Affiliate of the Depositor shall
be deemed not to be Outstanding and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder. The Trustee is
entitled to rely conclusively on a certification of the Depositor or any
Affiliate of the Depositor in determining which Certificates are registered in
the name of an Affiliate of the Depositor.
Certification: As defined in Section 8.12.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or
the Group II Class A Certificates, as applicable.
Class A Certificates: The Group I Class A Certificates and the
Group II Class A Certificates.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 51.70% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $4,822,704.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2a Certificates: All Certificates bearing the class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the class
designation of "Class A-2b".
Class A-2c Certificates: All Certificates bearing the class
designation of "Class A-2c".
Class B Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 85.10% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,822,704.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), and (I) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 87.50% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$4,822,704.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 90.10% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,822,704.
Class Certificate Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the
avoidance of doubt, the Class IO Shortfall for any Distribution Date shall equal
the amount payable to the Class X Certificates in respect of amounts due to the
Swap Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest (prior to any
reduction for Basis Risk Payments or Swap Termination Payments) on such
Distribution Date, all as further provided in Section 8.13.
Class LT-R Interest: The residual interest in the Lower-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class M Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B Certificates (other than the
Class M-1 Certificates) and (ii) the Subordinated Amount, in each case after
taking into account the distributions of the related Principal Distribution
Amount and any principal payments on those Classes of Certificates from the Swap
Account on that Distribution Date, by (y) the aggregate Stated Principal Balance
of the Mortgage Loans for that Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 59.40%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $4,822,704.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 66.40% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$4,822,704.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 71.40% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,822,704.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 75.10% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$4,822,704.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 78.60% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,822,704.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 81.70% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$4,822,704.
Class P Certificates: All Certificates bearing the class
designation of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier
REMIC-1 as described in the Preliminary Statement and the related footnote
thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier
REMIC-2 as described in the Preliminary Statement and the related footnote
thereto.
Class R Certificates: All Certificates bearing the class
designation of "Class R".
Class UT-R Interest: The residual interest in the Upper-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
Class X Certificates: All Certificates bearing the class
designation of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum
of (i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class X Interest which is distributable as a
Subordination Reduction Amount, minus (iii) any amounts paid from the Excess
Reserve Fund Account to pay any Basis Risk CarryForward Amount or any Swap
Termination Payment.
Class X Interest: The Upper-Tier Regular Interest represented by
the Class X Certificates as specified and described in the Preliminary Statement
and the related footnote thereto.
Closing Date: November 29, 2005.
Closing Date Deposit Amount: $1,841.93 (all of which is allocable
to principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $534.12 of the Closing Date Deposit Amount shall be attributable
to the Group I Mortgage Loans and $1,307.81 of the Closing Date Deposit Amount
shall be attributable to the Group II Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any successor
or amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to
any Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a)
sum of (i) the outstanding principal balance of the Second Lien Mortgage Loan
and (ii) the outstanding principal balance as of such date of any mortgage loan
or mortgage loans that are senior or equal in priority to the Second Lien
Mortgage Loan and which are secured by the same Mortgaged Property to (b) the
Appraised Value as determined pursuant to the Underwriting Guidelines of the
related Mortgaged Property as of the origination of the Second Lien Mortgage
Loan.
Compensating Interest: For any Distribution Date, the lesser of
(a) the amount by which the Prepayment Interest Shortfall, if any, for such
Distribution Date, exceeds all Prepayment Interest Excesses for such
Distribution Date with respect to all voluntary Principal Prepayments in Full
(excluding any payments made upon liquidation of any Mortgage Loan) on the
Mortgage Loans serviced by the applicable Servicer and (b) the amount of the
aggregate Servicing Fee paid to or retained by the applicable Servicer for such
Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan which contains a provision whereby the Mortgagor is permitted to
convert the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in
accordance with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee in
the State of California at which at any particular time its corporate trust
business with respect to this Agreement is administered, which office at the
date of the execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attn: Trust Administration-MS05X4, facsimile
no. (000) 000-0000 and which is the address to which notices to and
correspondence with the Trustee should be directed.
Corresponding Actual Crossover Distribution Date: For each
Pooling-Tier REMIC-2 IO Interest, the related Corresponding Scheduled Crossover
Distribution Date, unless on such date two times the aggregate Pooling-Tier
REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO Interest then
outstanding is less than the scheduled swap notional amount (taking into account
the use of the multiplier) of the Interest Rate Swap Agreement applicable for
such Distribution Date, in which case the Corresponding Actual Crossover
Distribution Date for such Pooling-Tier REMIC-2 IO Interest shall be the first
Distribution Date thereafter on which two times the aggregate of the
Pooling-Tier REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO
Interest then outstanding is greater than or equal to the scheduled swap
notional amount (taking into account the use of the multiplier) of the Interest
Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower-Tier
REMIC or Upper-Tier REMIC that corresponds to the class of interests in the
other such REMIC or to a Class of Certificates in the manner set out below:
Corresponding
Corresponding Lower-Tier Upper-Tier Regular Corresponding Class of
Class Designation Interest Certificates
------------------------ ------------------ ----------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-2c Class A-2c Class A-2c
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
N/A Class X Class X
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described
in the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in
the Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Cumulative Loss Percentage: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the calendar month preceding the month in which such Distribution Date
occurs and the denominator of which is the Cut-off Date Pool Principal Balance
of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period divided by
(y) the Cut-off Date Pool Principal Balance exceeds the applicable cumulative
loss percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
----------------------------------- ---------------------------------------
December 2007 through November 2008 1.650% for the first month, plus an
additional 1/12th of 2.05% for each
month thereafter (e.g., 2.675% in June
2008)
December 2008 through November 2009 3.700% for the first month, plus an
additional 1/12th of 2.05% for each
month thereafter (e.g., 4.725% in June
2009)
December 2009 through November 2010 5.750% for the first month, plus an
additional 1/12th of 1.65% for each
month thereafter (e.g., 6.575% in June
2010)
December 2010 through November 2011 7.400% for the first month, plus an
additional 1/12th of 0.900% for each
month thereafter (e.g., 7.850% in June
2011)
December 2011 and thereafter 8.300%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee, or the applicable Custodian, as applicable, consisting
of items (i) - (viii) as listed on Exhibit K hereto.
Custodian: LaSalle and its respective successors in interest.
Custodian Fee: With respect to each Distribution Date, the
aggregate amount of fees and expenses that the Custodian is entitled to receive,
pursuant to the fee schedule related to the LaSalle Mortgage Loans to which the
Depositor and the Custodian have previously agreed, for custodial services
rendered with respect to the LaSalle Mortgage Loans, during the related Due
Period. The Custodian shall inform the Trustee of the Custodian Fee on or prior
to the related Determination Date pursuant to Section 3.07(h).
Custodian Fee Rate: As to any Distribution Date, the Custodian
Fee for such Distribution Date, converted to a per annum rate on (i) the
aggregate Stated Principal Balance of the Mortgage Loans as of the first day of
the related Interest Accrual Period and (ii) with respect to the Determination
Date in December 2005 only, the portion of the Closing Date Deposit Amount
allocable to principal (calculated on an actual/360 basis)
Cut-off Date: November 1, 2005.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal Balances of all Mortgage Loans as of the Cut-off Date plus the portion
of the Closing Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off Date
(after giving effect to payments of principal due on that date, whether or not
received).
Data Tape Information: The information provided by the
Originators as of the Cut-off Date to the Depositor or the Purchaser setting
forth the following information with respect to each Mortgage Loan: (1) the
Mortgagor's name; (2) as to each Mortgage Loan, the Scheduled Principal Balance
as of the Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code
indicating whether the Mortgaged Property is owner occupied; (6) the type of
Mortgaged Property; (7) the first date on which the Scheduled Payment was due on
the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (8) the "paid through date" based on
payments received from the related Mortgagor; (9) the original principal amount
of the Mortgage Loan; (10) with respect to Adjustable Rate Mortgage Loans, the
Maximum Mortgage Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage
Loan); (12) a code indicating the purpose of the loan (i.e., purchase, rate and
term refinance, equity take out refinance); (13) a code indicating the
documentation style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Originator of such Mortgage
Loan; (23) with respect to each First Lien Mortgage Loan, the LTV at
origination, and with respect to each Second Lien Mortgage Loan, the CLTV at
origination; and (24) if such Mortgage Loan is covered by a primary mortgage
insurance policy or a lender-paid primary mortgage insurance policy, the primary
mortgage insurance rate. With respect to the Mortgage Loans in the aggregate,
the Data Tape Information shall set forth the following information, as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust to the Swap Provider pursuant to the Interest
Rate Swap Agreement as a result of an Event of Default (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the
defaulting party or a Termination Event (as defined in the Interest Rate Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax Event Upon
Merger (each as defined in the Interest Rate Swap Agreement )) with respect to
which the Swap Provider is the sole Affected Party (as defined in the Interest
Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the United
States Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Trigger Event: With respect to any Distribution Date,
a Delinquency Trigger Event exists if the quotient (expressed as a percentage)
of (x) the rolling three month average of the aggregate Stated Principal Balance
of 60+ Day Delinquent Mortgage Loans (including Mortgage Loans in foreclosure
and Mortgage Loans related to REO Property) and (y) (1) until the aggregate
Class Certificate Balance of the Class A Certificates have been reduced to zero,
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date equals or exceeds 33.00% of the prior period's Senior
Enhancement Percentage and (2) after the aggregate Class Certificate Balance of
the Class A Certificates have been reduced to zero, the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date equals or
exceeds 39.50% of the prior period's Class M Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof.
Depositor: Xxxxxx Xxxxxxx ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depositor Mortgage Loan: A Mortgage Loan that was purchased by
Purchaser from an Originator identified on the Mortgage Loan Schedule that is
not Meritage, Wilmington Finance or the Responsible Party, and as to which the
Depositor makes certain representations and warranties in this Agreement.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "P-1" by Moody's, "F1+" by Fitch and "A-1" by Standard & Poor's (to
the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the
18th day (or if such day is not a Business Day, the immediately preceding
Business Day) in the calendar month in which such Distribution Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company in trust for registered Holders of Xxxxxx Xxxxxxx Home Equity Loan
Trust 2005-4 Mortgage Pass-Through Certificates, Series 2005-4." Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if
such day is not a Business Day, the next succeeding Business Day, commencing in
December 2005.
Document Certification and Exception Report: The report attached
to Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal
or state-chartered depository institution or trust company that complies with
the definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trustee.
Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated "A-1+" by Standard & Poor's if
the amounts on deposit are to be held in the account for no more than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on deposit are to be held
in the account for no more than 30 days), or the long-term unsecured debt
obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicer and the Trustee) (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c)
in the name of the Trustee for the benefit of the Regular Certificateholders and
designated "Deutsche Bank National Trust Company in trust for registered Holders
of Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4, Mortgage Pass Through
Certificates, Series 2005-4." Funds in the Excess Reserve Fund Account shall be
held in trust for the Regular Certificateholders for the uses and purposes set
forth in this Agreement. Amounts on deposit in the Excess Reserve Fund Account
shall not be invested.
Excess Subordinated Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Subordinated Amount on such Distribution
Date over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: As defined in Section 8.12(a).
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate
equal to the sum of the Servicing Fee Rate, the Trustee Fee Rate, the Custodian
Fee Rate and any lender-paid primary mortgage insurance fee rate, if applicable.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Trustee Fee, the Custodian Fee and any lender-paid primary mortgage
insurance fee, if applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx
Xxx Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Responsible Party, Meritage, Wilmington Finance or the
Depositor, as applicable, as contemplated by this Agreement, the Meritage
Agreements or the Wilmington Finance Agreements, as applicable), a determination
made by the applicable Servicer that all Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds and other payments or recoveries which the
applicable Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. Each Servicer
shall maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution Date in
September 2035.
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
First NLC: First NLC Financial Services, LLC, a Florida limited
liability company, and its successors in interest.
First NLC Mortgage Loans: The Mortgage Loans purchased by the
Purchaser pursuant to the First NLC Purchase Agreement for which First NLC is
identified as Originator on the Mortgage Loan Schedule.
First NLC Purchase Agreement: (a) With respect to Mortgage Loans
purchased from First NLC by the Purchaser prior to September 29, 2005, the
Mortgage Loan Purchase and Warranties Agreement, dated as of September 1, 2004,
as amended by Amendment No. 1, dated as of February 4, 2005, each by and between
First NLC and the Purchaser, each of which are attached hereto as Exhibit O and
(b) with respect to Mortgage Loans purchased from First NLC by the Purchaser on
or after September 29, 2005, the Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of September 29, 2005, by and between First NLC
and the Purchaser, which is attached hereto as Exhibit X.
Xxxxx: Xxxxx, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 12.05(b) the address for notices to Fitch shall be Fitch, Inc., Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - Xxxxxx
Xxxxxxx Home Equity Loan Trust 2005-4, or such other address as Fitch may
hereafter furnish to the Depositor, the Trustee and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Class A Certificates: The Class A-1 Certificates.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: The Class A-2a Certificates, the
Class A-2b Certificates and the Class A-2c Certificates, collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
HomEq: HomEq Servicing Corporation, a New Jersey corporation, and
its successors in interest.
Index: As to each Adjustable Rate Mortgage Loan, the index from
time to time in effect for the adjustment of the Mortgage Rate set forth as such
on the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in
the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect, including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower-Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs and
ending on the day immediately preceding the current Distribution Date (or, in
the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date). For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate Mortgage Loan, the date, specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between Xxxxxx Xxxxxxx Capital Services Inc. and
the Trustee or any other cap agreement or swap agreement (including any related
schedules) entered into by the Trustee on behalf of the Trust pursuant to
Section 2.01(d) hereof.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, that portion of Available Funds
attributable to interest relating to Mortgage Loans in that Loan Group.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 90-1 (for transactions by insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank collective
investment funds), PTCE 95-60 (for transactions by insurance company general
accounts) or PTCE 96-23 (for transactions effected by "in-house asset
managers"), or any comparable exemption available under Similar Law.
JPMorgan: JPMorgan Chase Bank, National Association, a national
banking association, and its successors in interest.
JPMorgan Serviced Mortgage Loan: A Mortgage Loan which is
initially serviced by JPMorgan, as set forth in the Mortgage Loan Schedule.
LaSalle Mortgage Loans: The Mortgage Loans for which MILA, Inc.
is identified as the Originator on the Mortgage Loan Schedule.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a defaulted Mortgage Loan (including any REO Property) which either (a) was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the applicable Servicer has certified to the Trustee that it has
received all amounts it expects to receive in connection with the liquidation of
such Mortgage Loan including the final disposition of an REO Property, or (b) is
a Second Lien Mortgage Loan (1) that is delinquent 180 days or longer, (2) for
which the related first lien mortgage loan is not a Mortgage Loan, and (3) as to
which the applicable Servicer has certified to the Trustee that it does not
believe there is a reasonable likelihood that any further net proceeds will be
received or recovered with respect to such Second Lien Mortgage Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as
of any Distribution Date, the weighted average of the Adjusted Net Mortgage
Rates then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period.
Loan Group II Cap: With respect to the Group II Mortgage Loans as
of any Distribution Date, the weighted average of the Adjusted Net Mortgage
Rates then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period.
Loan-to-Value Ratio or LTV: With respect to any First Lien
Mortgage Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary
Statement.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-M-1, Class LT-M-2, Class LT-M-3,
Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2, Class
LT-B-3, Class LT-IO, Class LT-Group I, Class LT-Group II and Class LT-Accrual
Interests as described in the Preliminary Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in
the related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Meritage: Meritage Mortgage Corporation, an Oregon corporation,
and its successors in interest.
Meritage Agreements: The Meritage Purchase Agreement and the
Meritage Assignment Agreement, each of which are attached hereto as Exhibit P.
Meritage Assignment Agreement: The Assignment and Recognition
Agreement, dated as of the Closing Date, among the Purchaser, the Depositor and
Meritage.
Meritage Mortgage Loans: The Mortgage Loans purchased by the
Purchaser pursuant to the Meritage Purchase Agreement for which Meritage is
identified as Originator on the Mortgage Loan Schedule.
Meritage Purchase Agreement: (a) With respect to Mortgage Loans
purchased from Meritage by the Purchaser prior to June 1, 2005, the Mortgage
Loan Purchase and Warranties Agreement, dated as of August 1, 2004, as amended
by Amendment No. 1, dated as of March 29, 2005, each by and between Meritage and
the Purchaser, solely insofar as such agreement relates to the Meritage Mortgage
Loans and (b) with respect to Mortgage Loans purchased from Meritage by the
Purchaser on or after June 1, 2005, the Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of June 1, 2005, by and between
Meritage and the Purchaser, solely insofar as such agreement relates to the
Meritage Mortgage Loans.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originators have designated or will designate MERS as, and have taken or will
take such action as is necessary to cause MERS to be, the mortgagee of record,
as nominee for the Originators, in accordance with MERS Procedure Manual and (b)
the Originators have designated or will designate the Trustee as the Investor on
the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in
the related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc., and its successors in
interest. If Xxxxx'x is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b), the address for notices to Moody's
shall be Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Trustee and the
Servicers.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject
of this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes, without limitation, the Mortgage File, the Scheduled Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition proceeds, Prepayment Charges, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan, excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Trustee and referred to on Schedule I, such schedule setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgage Loan
number; (2) the city, state and zip code of the Mortgaged Property; (3) the
number and type of residential units constituting the Mortgaged Property; (4)
the current Mortgage Rate; (5) the current net Mortgage Rate; (6) the current
Scheduled Payment; (7) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (11) with respect to each Adjustable Rate Mortgage
Loan, the next Interest Rate Adjustment Date; (12) with respect to each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing Fee; (15)
whether such Mortgage Loan is a Group I Mortgage Loan or a Group II Mortgage
Loan; (16) the applicable Originator's name, (17) the date such Mortgage Loan
was sold by the applicable Originator to the Purchaser, (18) whether such
Mortgage Loan provides for a Prepayment Charge as well as the term and amount of
such Prepayment Charge, if any; (19) with respect to each First Lien Mortgage
Loan, the LTV at origination, and with respect to each Second Lien Mortgage
Loan, the CLTV at origination; (20) the applicable Servicer's name; and (21) the
date on which servicing of the Mortgage Loan was transferred to the applicable
Servicer; and (22) whether JPMorgan is initially the Servicer of the Mortgage
Loan.
Mortgage Note: The note or other evidence of the indebtedness of
a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage
Note, which shall be adjusted from time to time in the case of an Adjustable
Rate Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the
amount remaining for distribution pursuant to subsection 4.02(a)(iii) (before
giving effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds Compensating Interest payments made with respect to
such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Swap Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed
by some or all of the Class X and Class P Certificates that are rated by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the applicable Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property, which, in accordance with Accepted Servicing Practices, will not or,
in the case of a proposed Servicing Advance, would not be ultimately recoverable
from related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise. The determination by a Servicer that it has made a Nonrecoverable
Servicing Advance or that any proposed Servicing Advances, if made, would
constitute a Nonrecoverable Servicing Advance, shall be evidenced by an
Officer's Certificate delivered to the Trustee.
Notice of Final Distribution: The notice to be provided pursuant
to Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of any
Servicer with responsibility for the servicing of the Mortgage Loans required to
be serviced by such Servicer and listed on a list delivered to the Trustee
pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably acceptable to the
Trustee (and/or such other Persons as may be set forth herein), provided that
any Opinion of Counsel relating to (a) qualification of any Trust REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of such
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in such Servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with such Servicer of the
Mortgage Loans as an officer, employee, director or person performing similar
functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
Originators: The Responsible Party, Meritage, Wilmington Finance,
MILA, Inc., a Washington corporation and Acoustic Home Loans, LLC, a Delaware
limited liability company.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the applicable Servicer in respect of any Remittance Date representing
the aggregate of all payments of principal and interest, net of the Servicing
Fee, that were due during the related Due Period on the Mortgage Loans and that
were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates (except as set forth in the following sentence), the following
percentages: Class A-1 Certificates, 0.2400%; Class A-2a Certificates, 0.1000%;
Class A-2b Certificates, 0.2200%; Class A-2c Certificates, 0.3200%; Class M-1
Certificates, 0.4100%; Class M-2 Certificates, 0.4400%; Class M-3 Certificates,
0.4600%; Class M-4 Certificates, 0.5900%; Class M-5 Certificates, 0.6200%; Class
M-6 Certificates, 0.6900%; Class B-1 Certificates, 1.4500%; Class B-2
Certificates, 1.9500%; and Class B-3 Certificates, 2.4500%. On the first
Distribution Date after the Optional Termination Date, the Pass-Through Margins
shall increase to: Class A-1 Certificates, 0.4800%; Class A-2a Certificates,
0.2000%; Class A-2b Certificates, 0.4400%; Class A-2c Certificates, 0.6400%;
Class M-1 Certificates, 0.6150%; Class M-2 Certificates, 0.6600%; Class M-3
Certificates, 0.6900%; Class M-4 Certificates, 0.8850%; Class M-5 Certificates,
0.9300%; Class M-6 Certificates, 1.0350%; Class B-1 Certificates, 2.1750%; Class
B-2 Certificates, 2.9250%; and Class B-3 Certificates, 3.6750%.
Pass-Through Rate: For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2 Regular
Interest, each Lower-Tier Regular Interest and each Upper-Tier Regular Interest,
the per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being set forth on the face thereof or equal to
the percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by any Servicer, the Trustee or any of their
respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by, any Depository Institution and rated
"P-1" by Moody's, "F1+" by Fitch and "A-1+" by Standard & Poor's (to
the extent they are Rating Agencies hereunder and are so rated by
such Rating Agency);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any State thereof and that are rated by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by each Rating Agency that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor or an Affiliate thereof, that have been
rated "Aaa" by Moody's, "AAAm" by Standard & Poor's and at least
"AA" by Fitch (to the extent they are Rating Agencies hereunder and
are so rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies
as a permitted investment of funds backing "Aaa" or "AAA" rated
securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
international organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in Section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by Section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in Section 860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a
Person that is not a U.S. Person or a U.S. Person with respect to whom income
from a Residual Certificate is attributable to a foreign permanent establishment
or fixed base, within the meaning of an applicable income tax treaty of such
Person or any other U.S. Person, (vi) an "electing large partnership" within the
meaning of Section 775 of the Code and (vii) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any Trust REMIC to
fail to qualify as a REMIC at any time that the Certificates are outstanding.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of Xxxxxxx Mac, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Loan Group I WAC Rate: With respect to the
Group I Mortgage Loans as of any Distribution Date, a per annum rate equal to
(a) the weighted average of the Adjusted Net Mortgage Rates for each such
Mortgage Loan then in effect on the beginning of the related Due Period on the
Group I Mortgage Loans, adjusted in each case to accrue on the basis of a
360-day year and the actual number of days in the related Interest Accrual
Period.
Pooling-Tier REMIC-1 Loan Group II WAC Rate: With respect to the
Group II Mortgage Loans as of any Distribution Date, a per annum rate equal to
(a) the weighted average of the Adjusted Net Mortgage Rates for each such
Mortgage Loan then in effect on the beginning of the related Due Period on the
Group II Mortgage Loans, adjusted in each case to accrue on the basis of a
360-day year and the actual number of days in the related Interest Accrual
Period.
Pooling-Tier REMIC-2: As described in the Preliminary Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling-Tier REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by any Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution
Date, any interest collected by a Servicer with respect to any Mortgage Loan
serviced by such Servicer as to which a Principal Prepayment in Full occurs from
the 1st day of the month through the 15th day of the month in which such
Distribution Date occurs and that represents interest that accrues from the 1st
day of such month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the portion of the
Prepayment Period from and including the 16th day of the month preceding the
month in which such Distribution Date occurs (or from the day following the
Cut-off Date, in the case of the first Distribution Date) through the last day
of such month, the subject of a Principal Prepayment which is not accompanied by
an amount equal to one month of interest that would have been due on such
Mortgage Loan on the Due Date in the following month and which was applied by
the applicable Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding such Due Date an amount equal to the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and
(d) the number of days commencing on the date on which such Principal Prepayment
was applied and ending on the last day of the calendar month in which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date, either
(i) with respect to any voluntary Principal Prepayments in Full, the period from
and including the 16th day of the month preceding the month in which such
Distribution Date occurs (or, in the case of the first Distribution Date, from
and including the Cut-off Date) to and including the 15th day of the month in
which such Distribution Date occurs, or (ii) with respect to any voluntary
partial Principal Prepayments or any involuntary Principal Prepayments, the
calendar month preceding the month in which such Distribution Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum
of (i) the Basic Principal Distribution Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received in advance of its scheduled Due Date, excluding
any Prepayment Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date, the amount equal to the sum of the following amounts (without duplication)
with respect to the related Due Period: (i) each scheduled payment of principal
on a Mortgage Loan due during such Due Period and received by the Servicers on
or prior to the related Determination Date or advanced by the applicable
Servicer for the related Remittance Date, and all Principal Prepayments received
during the related Prepayment Period; (ii) all Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds on the Mortgage Loans allocable to
principal actually collected by the Servicers during the related Prepayment
Period; (iii) the portion of the Repurchase Price allocable to principal with
respect to each Mortgage Loan repurchased with respect to such Distribution
Date; (iv) all Substitution Adjustment Amounts allocable to principal received
in connection with the substitutions of Mortgage Loans with respect to such
Distribution Date; (v) with respect to the Distribution Date in December 2005
only, the portion of the Closing Date Deposit Amount allocable to principal; and
(vi) the allocable portion of the proceeds received with respect to the
termination of the Trust Fund pursuant to clause (a) of Section 9.01 (to the
extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated November
21, 2005, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the Meritage Purchase
Agreement, the Wilmington Finance Purchase Agreement and the First NLC Purchase
Agreement.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the Mortgage Loans
under each of the Purchase Agreements.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor, the Trustee and the Servicers.
Realized Losses: With respect to any date of determination and
any Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid
principal balance of such Liquidated Mortgage Loan together with accrued and
unpaid interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net of the expenses incurred by the applicable Servicer in connection
with the liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act Interest Shortfall: With respect to any Distribution
Date and any Mortgage Loan, any reduction in the amount of interest collectible
on such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the
second Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the applicable Servicer of any
REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the applicable Servicer in the name of
the Trustee on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, (a) in the
case of any Mortgage Loan repurchased by the Depositor or the Responsible Party,
an amount equal to the sum of (i) the unpaid principal balance of such Mortgage
Loan as of the date of repurchase, (ii) interest on such unpaid principal
balance of such Mortgage Loan at the Mortgage Rate from the last date through
which interest has been paid and distributed to the Trustee to the date of
repurchase, (iii) all unreimbursed Servicing Advances and (iv) all costs and
expenses incurred by the Trustee arising out of or based upon such breach,
including without limitation, costs and expenses relating to the Trustee's
enforcement of the repurchase obligation of the Depositor or the Responsible
Party hereunder, and (b) in the case of any Mortgage Loan repurchased by
Meritage or Wilmington Finance, the repurchase price specified in the Meritage
Agreements or the Wilmington Finance Agreements, as applicable. In addition to
the Repurchase Price, First NLC is obligated to make certain indemnification
payments for material breaches of representations and warranties as further set
forth in Section 2.03(n) in this Agreement, and each of Meritage and Wilmington
Finance is obligated to make certain indemnification payments for material
breaches of representations and warranties as further set forth in the Meritage
Agreements and the Wilmington Finance Agreements, as applicable.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee or the applicable Custodian, as applicable,
substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any
vice president, any assistant vice president, any assistant secretary, any
assistant treasurer, any associate, or any other officer of the Trustee,
customarily performing functions similar to those performed by any of the above
designated officers who at such time shall be officers to whom, with respect to
a particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Responsible Party: First NLC.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second
lien Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount, in each case after taking into account the distribution of the Principal
Distribution Amount and any principal payments on those Classes of Certificates
from the Swap Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 48.30%.
Servicer: JPMorgan or HomEq, and if a successor Servicer to any
Servicer is appointed hereunder, such successor. When the term "Servicer" is
used in this Agreement in connection with the administration of servicing
obligations with respect to any Mortgage Loan, Mortgaged Property, REO Property
or Mortgage File, "Servicer" shall mean the Person identified as the Servicer of
such Mortgage Loan on the Mortgage Loan Schedule.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer in the
performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of a
Mortgaged Property, (ii) any enforcement, administrative or judicial
proceedings, including foreclosures and litigation, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property and (iv) the performance of its
obligations under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing Advances
shall also include any reasonable "out-of-pocket" costs and expenses (including
legal fees) incurred by the applicable Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage in connection with any foreclosure in respect of any Mortgage Loan to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement. None of the Servicers shall be required to make any Nonrecoverable
Servicing Advances.
Servicing Fee: With respect to each Servicer, each Mortgage Loan
serviced by such Servicer and for any calendar month, an amount equal to one
month's interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in Full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the applicable Stated Principal Balance of such Mortgage
Loan as of the first day of such calendar month. Such fee shall be payable
monthly, and shall be pro rated for any portion of a month during which the
Mortgage Loan is serviced by such Servicer under this Agreement. The Servicing
Fee is payable solely from the interest portion (including recoveries with
respect to interest from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds and proceeds received with respect to REO Properties, to the extent
permitted by Section 3.11) of such Scheduled Payment collected by such Servicer,
or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the Trustee or
applicable Custodian in the Custodial File and copies of the Mortgage Loan
Documents set forth in Exhibit K hereto.
Servicing Officer: Any officer of any Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by such Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Servicing Transfer Date: With respect to each JPMorgan Serviced
Mortgage Loan, the date on which such Mortgage Loan will be transferred from
JPMorgan to HomEq, which shall occur not later than the second Distribution
Date.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, two months or more past due (without giving effect to any
grace period), including, without limitation, such Mortgage Loans that are
subject to bankruptcy proceedings, (ii) each Mortgage Loan in foreclosure and
(iii) all REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an
amount equal to 4.95% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 9.90% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Offered Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date Pool Principal
Balance; provided, however, that if, on any Distribution Date, a Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to the applicable
percentage of the then current aggregate Stated Principal Balance of the
Mortgage Loans until the Distribution Date on which a Trigger Event no longer
exists. When the Class Certificate Balance of each Class of Offered Certificates
has been reduced to zero, the Specified Subordinated Amount will thereafter
equal zero.
Standard & Poor's: Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc., and its successors in interest. If Standard
& Poor's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Standard & Poor's shall
be Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance Group - Xxxxxx Xxxxxxx Home Equity Loan Trust
2005-4, or such other address as Standard & Poor's may hereafter furnish to the
Depositor, the Trustee and the Servicers.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Trustee with respect to
the related Mortgage Loan representing payments or recoveries of principal
including advances in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of principal received by the related
Servicer on or prior to the related Determination Date or advanced by the
related Servicer for the related Remittance Date and any unscheduled principal
payments and other unscheduled principal collections received during the related
Prepayment Period, and the Stated Principal Balance of any Mortgage Loan that
has prepaid in full or has become a Liquidated Mortgage Loan during the related
Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of
(a) the Distribution Date in December 2008 and (b) the Distribution Date
following the Distribution Date on which the aggregate Class Certificate
Balances of the Class A Certificates have been reduced to zero and (ii) the
first Distribution Date on which the Senior Enhancement Percentage (calculated
for this purpose only after taking into account payments of principal on the
Mortgage Loans applied to reduce the Stated Principal Balances of the Mortgage
Loans for the applicable Distribution Date but prior to any allocation of the
Principal Distribution Amount and principal payments from the Swap Account to
the Certificates on such Distribution Date) is greater than or equal to the
Senior Specified Enhancement Percentage.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the LIBOR Certificates as of such Distribution Date (after giving
effect to the payment of the Principal Remittance Amount on such Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date,
the excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by the
Responsible Party, Meritage, Wilmington Finance or Depositor for a Deleted
Mortgage Loan that satisfies the criteria set forth in the definition of
"Qualified Substitute Mortgage Loan" in the applicable Purchase Agreement or
(ii) substituted by the Depositor for a Deleted Mortgage Loan, which, if
substituted by the Depositor, must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit J, (a)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
more than 10% less than, the Stated Principal Balance of the Deleted Mortgage
Loan; (b) be accruing interest at a rate no lower than and not more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (c) have a Loan-to-Value
Ratio or a Combined Loan-to-Value Ratio, as applicable, no higher than that of
the Deleted Mortgage Loan; (d) have a remaining term to maturity no greater than
(and not more than one year less than that of) the Deleted Mortgage Loan; and
(e) comply with each representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: The corpus of a trust created pursuant to Section
4.06 of this Agreement, consisting of the Interest Rate Swap Agreement, the
Class IO Interest and the right to receive Class IO Shortfalls, subject to the
obligation to pay amounts specified in Section 4.06.
Swap LIBOR: With respect to any Distribution Date (and the
related Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in
the Interest Swap Agreement), (ii) two, and (iii) the quotient of (a) the actual
number of days in the Interest Accrual Period for the LIBOR Certificates divided
by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination Payment owed to
the Swap Provider for such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period, multiplied by 12.
Swap Provider: Xxxxxx Xxxxxxx Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or the
Swap Provider upon termination of the Interest Rate Swap Agreement as a result
of an Event of Default (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement).
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of each Trust REMIC in the manner provided
under Treasury Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on
the Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an
amount equal to the excess if any, of (i) the interest on the Mortgage Loans
received by the Servicers on or prior to the related Determination Date (other
than Prepayment Interest Excesses) or advanced by the Servicers for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such Distribution
Date and (B) any Net Swap Payments to the Swap Provider.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting
of (i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Accounts, Excess Reserve Fund Account, the Distribution Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the Closing Date
Deposit Amount; (v) the Interest Rate Swap Agreement; (vi) the Swap Account;
(vii) the Depositor's rights under the Meritage Agreements and the Wilmington
Finance Agreements (solely insofar as such agreements relate to the Meritage
Mortgage Loans or the Wilmington Finance Mortgage Loans, as applicable); and
(viii) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2,
the Lower-Tier REMIC or the Upper-Tier REMIC, as applicable.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of (a) one-twelfth of the Trustee Fee Rate and (b) (i) the aggregate
Stated Principal Balance of the Mortgage Loans as of the first day of the
related Interest Accrual Period and (ii) with respect to the Distribution Date
in December 2005 only, the portion of the Closing Date Deposit Amount allocable
to principal.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0047% per
annum.
Trustee Float Period: With respect to the Distribution Date and
the related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed under footnote 1
of, and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class
of Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amount with respect to such Class over (ii) the sum of
(a) all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates, and (b) the amount by which the Class Certificate
Balance of such Class has been increased due to the distribution of any
Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Upper-Tier Interest Rate for the Class of Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier REMIC Loan Group
I Rate or Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the
Upper-Tier REMIC WAC Rate, the excess, if any, of (i) the amount of interest
such Class of Upper-Tier Regular Interest would otherwise be entitled to receive
on such Distribution Date had such Upper-Tier REMIC Regular Interest not been
subject to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group
II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate, over (ii) the
amount of interest payable on such Class of Certificates on such Distribution
Date taking into account the Upper-Tier REMIC Loan Group I Rate or Upper-Tier
REMIC Loan Group II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate
and (B) the Upper-Tier CarryForward Amount for such Class of Certificates for
all previous Distribution Dates not previously paid, together with interest
thereon at a rate equal to the applicable Upper-Tier Interest Rate for such
Class of Certificates for such Distribution Date, without giving effect to the
Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group II Rate, as
and if applicable, or the Upper-Tier REMIC WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary
Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC Loan Group I Rate: As described in the
Preliminary Statement.
Upper-Tier REMIC Loan Group II Rate: As described in the
Preliminary Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the
weighted average of the Lower-Tier Interest Rates on the Lower-Tier Regular
Interests (other than the Class LT-IO Interest) as of the first day of the
related Interest Accrual Period, weighted on the basis of the Lower-Tier
Principal Amounts of such Lower-Tier Regular Interests as of the first day of
the related Interest Accrual Period.
U.S. Person: (i) A citizen or resident of the United States; (ii)
a corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution Date, the weighted average of the Adjusted Net Mortgage Rates then
in effect on the beginning of the related Due Period on the Mortgage Loans minus
the Swap Payment Rate, adjusted in each case to accrue on the basis of a 360-day
year and the actual number of days in the related Interest Accrual Period.
Wilmington Finance: Collectively, Wilmington Finance Inc., a
Delaware corporation, and its successors in interest, and Wilmington Finance, a
division of AIG Federal Savings Bank, a federally chartered savings bank, and
its successors in interest.
Wilmington Finance Agreements: The Wilmington Finance Purchase
Agreement and the Wilmington Finance Assignment Agreement, each of which are
attached hereto as Exhibit Q.
Wilmington Finance Assignment Agreement: The Assignment and
Recognition Agreement, dated as of the Closing Date, among the Purchaser, the
Depositor and Wilmington Finance.
Wilmington Finance Mortgage Loans: The Mortgage Loans purchased
by the Purchaser pursuant to the Wilmington Finance Purchase Agreement for which
Wilmington Finance is identified as Originator on the Mortgage Loan Schedule.
Wilmington Finance Purchase Agreement: (a) With respect to
Mortgage Loans purchased from Wilmington Finance by the Purchaser prior to June
1, 2005, the Mortgage Loan Purchase and Warranties Agreement, dated as of August
1, 2004, as amended by Amendment to Mortgage Loan Purchase and Warranties
Agreement, dated as of January 27, 2005, Amendment No. 2, dated as of February
4, 2005 and Amendment No. 3, dated as of April 28, 2005, each by and between
Wilmington Finance and the Purchaser, solely insofar as such agreement relates
to the Wilmington Finance Mortgage Loans and (b) with respect to Mortgage Loans
purchased from Wilmington Finance by the Purchaser on or after June 1, 2005, the
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of June 1, 2005, by and between Wilmington Finance and the Purchaser, solely
insofar as such agreement relates to the Wilmington Finance Mortgage Loans.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to LaSalle
with respect to the LaSalle Mortgage Loans, and to the Trustee with respect to
the remaining Mortgage Loans for the benefit of the Certificateholders the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _____________, without
recourse" and signed (which may be by facsimile signature) in the name
of the last endorsee by an authorized officer. To the extent that there
is no room on the face of the Mortgage Note for endorsements, the
endorsement may be contained on an allonge, unless the Trustee is
advised in writing by the applicable Originator (pursuant to the
applicable Purchase Agreement) or the Depositor, as applicable, that
state law does not so allow;
(ii) the original of any guaranty executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or
a certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the applicable Originator or the Depositor, as
applicable, shall deliver or cause to be delivered to the Custodian or
Trustee, as applicable, a photocopy of such Mortgage certified by the
applicable Originator or the Depositor, as applicable, to be a true and
complete copy of such Mortgage and shall forward to the Custodian or
Trustee, as applicable, such original recorded Mortgage within 14 days
following the applicable Originator's or the Depositor's receipt of such
Mortgage from the applicable public recording office; or in the case of
a Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such
public recording office to be a true and complete copy of the original
recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank (except with respect to MERS Designated Mortgage
Loans);
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage Loan)
to the last endorsee with evidence of recording thereon or a certified
true copy of such intervening assignments of Mortgage submitted for
recording, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of Mortgage,
the applicable Originator or the Depositor, as applicable, shall deliver
or cause to be delivered a photocopy of such intervening assignment,
certified by the applicable Originator or the Depositor, as applicable,
to be a true and complete copy of such intervening assignment and shall
forward to the Custodian or Trustee, as applicable, such original
recorded intervening assignment within 14 days following the applicable
Originator or the Depositor's receipt of such from the applicable public
recording office; or in the case of an intervening assignment where a
public recording office retains the original recorded intervening
assignment or in the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such intervening
assignment certified by such public recording office to be a true and
complete copy of the original recorded intervening assignment;
(vii) the original mortgagee title insurance policy or attorney's
opinion of title and abstract of title, or, in the event such original
title policy is unavailable, a certified true copy of the related policy
binder or commitment for title certified to be true and complete by the
title insurance company; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The Depositor will use its reasonable efforts to assist the
Trustee and the Servicers in enforcing the obligations of each Responsible Party
under this Agreement, the obligations of Meritage under the Meritage Agreements
and the obligations of Wilmington Finance under the Wilmington Finance
Agreements.
The Depositor shall cause to be delivered, or shall deliver in
the case of a Depositor Mortgage Loan, to the Trustee or Custodian, as
applicable, the applicable recorded document promptly upon receipt from the
respective recording office but in no event later than 180 days from the Closing
Date.
If any Mortgage has been recorded in the name of Mortgage
Electronic Registration System, Inc. ("MERS") or its designee, no Assignment of
Mortgage in favor of the Trustee will be required to be prepared or delivered
and instead, the applicable Servicer shall take all reasonable actions as are
necessary at the expense of the applicable Originator to the extent permitted
under the related Purchase Agreement and otherwise at the expense of the
Depositor to cause the Trust to be shown as the owner of the related Mortgage
Loan on the records of MERS for the purpose of the system of recording transfers
of beneficial ownership of mortgages maintained by MERS.
From time to time, the Depositor or the applicable Servicer, as
applicable, shall forward to the Trustee or Custodian, as applicable, additional
original documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan in accordance with the terms of
this Agreement upon receipt of such documents. All such mortgage documents held
by the Trustee or Custodian, as applicable, as to each Mortgage Loan shall
constitute the "Custodial File".
No later than thirty (30) Business Days following the later of
the Closing Date and the date of receipt by the applicable Servicer of the
complete recording information for a Mortgage, the applicable Servicer shall
promptly submit or cause to be submitted for recording, at the expense of the
applicable Originator as required pursuant to the related Purchase Agreement, or
the Depositor in the case of a Depositor Mortgage Loan, and at no expense to the
Trust Fund, the Trustee, the applicable Servicer, or, except in the case of a
Depositor Mortgage Loan, the Depositor, in the appropriate public office for
real property records, each Assignment of Mortgage referred to in Section
2.01(b)(v). Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments of Mortgage shall not be required to be completed and submitted for
recording with respect to any Mortgage Loan (i) if the Trustee, the Custodian
and each Rating Agency have received an Opinion of Counsel, satisfactory in form
and substance to the Trustee and each Rating Agency to the effect that the
recordation of such Assignments of Mortgage in any specific jurisdiction is not
necessary to protect the Trustee's interest in the related Mortgage Note, (ii)
if such Mortgage Loan is a MERS Designated Mortgage Loan or (iii) if the Rating
Agencies have each notified the Depositor in writing that not recording any such
Assignments of Mortgage would not cause the initial ratings on any LIBOR
Certificates to be downgraded or withdrawn; provided, however, that no Servicer
shall be held responsible or liable for any loss that occurs because an
Assignment of Mortgage was not recorded, but only to the extent the applicable
Servicer does not have prior knowledge of the act or omission that causes such
loss. However, with respect to the Assignments of Mortgage referred to in
clauses (i) and (ii) above, if foreclosure proceedings occur against a Mortgaged
Property, the Depositor shall notify the applicable Servicer and such Servicer
shall record such Assignment of Mortgage at the expense of the Depositor, in the
case of a Depositor Mortgage Loan, or the related Originator as required
pursuant to the related Purchase Agreement. If the Assignment of Mortgage is to
be recorded, the Mortgage shall be assigned to "Deutsche Bank National Trust
Company, as trustee under the Pooling and Servicing Agreement dated as of
November 1, 2005, Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4". In the event
that any such Assignment of Mortgage is lost or returned unrecorded because of a
defect therein, the Depositor shall promptly cause to be delivered a substitute
Assignment of Mortgage to cure such defect and thereafter cause each such
assignment to be duly recorded. If there is such a defect with respect to a
Meritage Mortgage Loan or a Wilmington Finance Mortgage Loan, the Trustee shall
take such actions, with the Depositor's consent, to enforce the rights of the
Trust as "Purchaser" under the Meritage Agreements or the Wilmington Finance
Agreements, as applicable.
On or prior to the Closing Date, the Depositor shall deliver to
the Trustee and the Custodian, as applicable, a copy of the Data Tape
Information in an electronic, machine readable medium in a form mutually
acceptable to the Trustee or Custodian, as applicable.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "XXXXXX XXXXXXX HOME EQUITY
LOAN TRUST 2005-4" and Deutsche Bank National Trust Company is hereby appointed
as Trustee in accordance with the provisions of this Agreement. The parties
hereto acknowledge and agree that it is the policy and intention of the Trust to
acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the representations and warranties set
forth in paragraph (liii) of Schedule IV-B, paragraph (ff) of Schedule IV-C and
paragraph (aaa) of Schedule V.
(d) The Trust shall have the capacity, power and authority, and
the Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans, the Interest Rate Swap
Agreement), the Meritage Agreements and the Wilmington Finance Agreements
pursuant to Section 2.01(a). The Trustee on behalf of the Trust is hereby
directed to enter into the Interest Rate Swap Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee and the Custodian shall acknowledge, on the Closing Date, receipt by the
Trustee, or Custodian, as applicable, of the documents identified in the Initial
Certification in the form annexed hereto as Exhibit E, and declares that it
holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such other assets as
are included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders. The Trustee and the Custodian shall
maintain possession of the related Mortgage Notes in the State of California
unless otherwise permitted by the Rating Agencies.
In connection with the Closing Date, the Trustee and the
Custodian shall be required to deliver via facsimile (with original to follow
the next Business Day) to the Depositor and the Servicers an Initial
Certification prior to the Closing Date, or, as the Depositor agrees to, on the
Closing Date, certifying receipt of a Mortgage Note and Assignment of Mortgage
for each Mortgage Loan. Neither the Trustee nor the Custodian shall be
responsible to verify the validity, sufficiency or genuineness of any document
in any Custodial File.
Within 90 days after the Closing Date, the Trustee and the
Custodian shall, for the benefit of the Holders of the Certificates, ascertain
that all documents identified in the Document Certification and Exception Report
in the form attached hereto as Exhibit F are in its possession, and shall
deliver to the Depositor, the Servicers, and to the Trustee, if delivered by the
Custodian, a Document Certification and Exception Report, in the form annexed
hereto as Exhibit F, to the effect that, as to each applicable Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as an
exception and not covered by such certification): (i) all documents identified
in the Document Certification and Exception Report and required to be reviewed
by it are in its possession; (ii) such documents have been reviewed by it and
appear regular on their face and relate to such Mortgage Loan; (iii) based on
its examination and only as to the foregoing documents, the information set
forth in items (1), (2), (7) and (9) of the Mortgage Loan Schedule and items
(1), (9) and (17) of the Data Tape Information respecting such Mortgage Loan
accurately reflects the information set forth in the Custodial File; and (iv)
each Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement. Neither the Trustee nor the Custodian shall be responsible to verify
the validity, sufficiency or genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, the applicable Servicer
(for the benefit of the Holders of the Certificates, based solely on the list of
MERS Designated Mortgage Loans and screen printouts from the MERS System
provided to such Servicer by the Responsible Party or, with respect to the
Depositor Mortgage Loans, the Depositor, no later than 45 days after the Closing
Date) shall confirm, on behalf of the Trust, that the Trustee is shown as the
Investor with respect to each MERS Designated Mortgage Loan on such screen
printouts. If the Trustee is not shown as the Investor with respect to any MERS
Designated Mortgage Loans on such screen printouts, the applicable Servicer
shall promptly notify the Responsible Party or, in the case of a Depositor
Mortgage Loan, the Depositor of such fact, and such Person shall then either
cure such defect or repurchase such Mortgage Loan in accordance with Section
2.03.
The Trustee and the Custodian shall retain possession and custody
of each applicable Custodial File in accordance with and subject to the terms
and conditions set forth herein. The applicable Servicer shall promptly deliver
to the Trustee or to the Custodian, as applicable, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Custodial File as come into the possession of the Servicer from time to time.
The Responsible Party and the Depositor shall deliver (or the
Depositor, as applicable, shall use reasonable efforts to cause Meritage and
Wilmington Finance to deliver) to the applicable Servicer copies of all trailing
documents required to be included in the Custodial File at the same time the
original or certified copies thereof are delivered to the Trustee or the
Custodian, as applicable, including but not limited to such documents as the
title insurance policy and any other Mortgage Loan Documents upon return from
the public recording office. Such documents shall be delivered by the
Responsible Party at the Responsible Party's expense (or the Depositor, as
applicable, shall use reasonable efforts to cause Meritage and Wilmington
Finance to deliver such documents at Meritage's expense or Wilmington Finance's
expense, as applicable, pursuant to the Meritage Agreements or the Wilmington
Finance Agreements, as applicable) to such Servicer.
Section 2.03 Representations and Warranties; Remedies for
Breaches of Representations and Warranties with Respect to the Mortgage Loans.
(a) HomEq hereby makes the representations and warranties set forth in Schedule
II hereto to the Depositor and the Trustee as of the dates set forth in such
Schedule, and JPMorgan hereby makes the representations and warranties set forth
in Schedule III hereto to the Depositor and the Trustee as of the dates set
forth in such Schedule. Upon discovery by any of the parties hereto of a breach
of any of the foregoing representations and warranties, the party discovering
such breach shall give prompt written notice to the other.
(b) The Depositor hereby makes the representations and warranties
set forth in Schedules IV-A, IV-B and IV-C hereto to the Trustee as of the dates
set forth in such Schedule.
(c) LaSalle hereby makes the representations and warranties set
forth in Schedule VI hereto to the Trustee as of the dates set forth in such
Schedule.
(d) First NLC hereby makes the representations and warranties set
forth in Schedule V hereto to the Depositor, the Servicers and the Trustee as of
the dates set forth in such Schedule. LaSalle hereby makes the representations
and warranties set forth in Schedule VI hereto to the Trustee as of the dates
set forth in such Schedule.
(e) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File.
(f) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Depositor or the Responsible Party, as
applicable, under this Agreement, that materially and adversely affects the
value of any Mortgage Loan or the interests of the Trustee or the
Certificateholders therein, the party discovering such breach shall give prompt
written notice thereof to the other parties. Upon receiving written notice of a
breach of a representation and warranty or written notice that a Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the Trustee shall in turn notify the Responsible Party
or the Depositor, as applicable, in writing to correct or cure, in accordance
with the this Agreement, any such breach of a representation or warranty made by
the Responsible Party or the Depositor, as applicable, under this Agreement
within sixty (60) days from the date of notice from the Trustee or the discovery
by the Responsible Party or the Depositor, as applicable, of the breach, and if
the Responsible Party or the Depositor, as applicable, fails or is unable to
correct or cure the defect or breach within such period, the Trustee shall
notify the Depositor of such failure to correct or cure. Unless otherwise
directed by the Depositor within five (5) Business Days after notifying the
Depositor of such failure by the Responsible Party or the Depositor, as
applicable, to correct or cure, the Trustee shall notify the Responsible Party
or the Depositor, as applicable, to repurchase the Mortgage Loan (a "Deleted
Mortgage Loan") at the Repurchase Price or, if permitted hereunder, substitute a
Substitute Mortgage Loan for such Mortgage Loan, in each case, pursuant to this
Agreement. Notwithstanding the foregoing, in the event that the Trustee receives
notice of a breach by (i) First NLC of any of the representations and warranties
set forth in paragraphs (rr), (zz), (aaa), (ccc), (jjj), (kkk), (lll), (mmm),
(nnn), (ooo) and (ppp) of Schedule V or (ii) the Depositor of any
representations and warranties set forth in paragraphs (xliv), (lii), (liii),
(liv), (lv), (lxi), (lxii), (liii), (lxiv), (lxv), (lxvi), (lxvii), (lxviii) or
(lxix) of Schedule IV-B or paragraphs (qq), (rr), (tt), (uu), (vv), (ww), (xx),
(yy), (zz), (aaa) or (ccc) of Schedule IV-C, the Trustee shall notify the
Responsible Party or the Depositor, as applicable, to repurchase the Mortgage
Loan at the Repurchase Price within sixty (60) days of the Responsible Party's
or the Depositor's receipt of such notice, as applicable. If, within ten (10)
Business Days of receipt of such notice by the Responsible Party or the
Depositor, as applicable, the Responsible Party or the Depositor, as applicable,
fails to repurchase such Mortgage Loan, the Trustee shall notify the Depositor
of such failure. The Trustee shall pursue all legal remedies available to the
Trustee against the Responsible Party under this Agreement, if the Trustee has
received written notice from the Depositor directing the Trustee to pursue such
remedies (and without such notice against the Depositor in the case of a
Depositor Mortgage Loan).
(g) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's or the Custodian's review of the
related Custodial File, the Trustee or the Custodian, as applicable, shall
notify the applicable Originator (if any), the applicable Servicer, the Trustee
(if applicable) and the Depositor in writing, and request that such Originator
(or the Depositor in the case of a Depositor Mortgage Loan) correct or cure such
defect as required under this Agreement, the Wilmington Finance Agreements or
the Meritage Agreements, as applicable, and if such Originator (or the Depositor
in the case of a Depositor Mortgage Loan) fails or is unable to correct or cure
the defect within the period set forth in this Agreement, the Wilmington Finance
Agreements or the Meritage Agreements, as applicable, the Trustee or the
Custodian, as applicable, shall notify the Depositor of such failure to correct
or cure. Unless otherwise directed by the Depositor within five (5) Business
Days after notifying the Depositor of such failure by the applicable Originator
or the Depositor, as applicable, to correct or cure, the Trustee or the
Custodian, as applicable, shall notify the applicable Originator or the
Depositor, as applicable, to repurchase the Mortgage Loan at the Repurchase
Price or, if permitted hereunder, substitute a Substitute Mortgage Loan for such
Mortgage Loan, in each case, pursuant to the terms of this Agreement, applicable
Originator. If, within ten (10) Business Days of receipt of such notice by the
applicable Originator or the Depositor, as applicable, such Originator or the
Depositor, as applicable, fails to repurchase such Mortgage Loan, the Trustee
shall notify the Depositor of such failure. The Trustee shall pursue all legal
remedies available to the Trustee against the applicable Originator or the
Depositor, as applicable, under this Agreement, the Wilmington Finance
Agreements or the Meritage Agreements, as applicable, if the Trustee has
received written notice from the Depositor directing the Trustee to pursue such
remedies (and without such notice against the Depositor in the case of a
Depositor Mortgage Loan).
(h) Within 90 days of the earlier of either discovery by or
notice to the Depositor of any breach of a representation or warranty set forth
on Schedule IV-A, IV-B or IV-C hereto that materially and adversely affects the
value of any Mortgage Loan or the interest of the Trustee or the
Certificateholders therein, the Depositor shall use its best efforts to promptly
cure such breach in all material respects and, if such defect or breach cannot
be remedied, the Depositor shall purchase such Mortgage Loan at the Repurchase
Price or, if permitted hereunder, substitute a Substitute Mortgage Loan for such
Mortgage Loan. Within 90 days of the earlier of discovery by the Depositor or
receipt of notice by the Depositor of the breach of a representation and
warranty set forth in Schedule V to this Agreement, Exhibit B to the Meritage
Assignment Agreement or Exhibit B to the Wilmington Finance Assignment
Agreement, that (1) materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan and (2) has not been cured, repurchased
or substituted for by the applicable Originator in accordance with the terms of
this Agreement, the Meritage Agreements or the Wilmington Finance Agreements, as
applicable, (i) the Depositor shall, within the time period permitted therefor
under such agreement, (A) in the case of a breach by First NLC, take such action
described in Section 2.03(f) of this Agreement in respect of such Mortgage Loan,
(B) in the case of Meritage, take such action described in Section 5 of the
Meritage Assignment Agreement in respect of such Mortgage Loan, or (C) in the
case of Wilmington Finance, take such action described in Section 5 of the
Wilmington Finance Assignment Agreement in respect of such Mortgage Loan, in
each case of clauses (A), (B) or (C), as if the Depositor were the applicable
Originator, and (ii) the Trustee shall promptly deliver to the Depositor or its
designee the related Mortgage File in accordance with the Servicer's direction
in a Request for Release and, upon Depositor's request, shall assign to the
Depositor all of its rights with respect to such Originator's breach under this
Agreement, the Meritage Assignment Agreement or the Wilmington Finance
Assignment Agreement, as applicable, which assignment shall be evidenced by a
writing prepared by the Depositor and executed by the Trustee in favor of the
Depositor. Any obligation of the Depositor under this subsection shall terminate
upon receipt by the Trustee of a confirmation from each Rating Agency that such
termination will not cause a downgrade, qualification or withdrawal of the
rating then assigned to any Class of Certificates by any Rating Agency.
(i) Within 90 days of the earlier of either discovery by or
notice to the Responsible Party of any breach of a representation or warranty
set forth on Schedule V that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders therein,
the Responsible Party shall use its best efforts to promptly cure such breach in
all material respects and, if such defect or breach cannot be remedied, the
Responsible Party shall, at the Depositor's option, purchase such Mortgage Loan
at the Repurchase Price or, if permitted hereunder, substitute a Substitute
Mortgage Loan for such Mortgage Loan, if applicable.
(j) Any substitution of a Substitute Mortgage Loan by the
Responsible Party shall be made in accordance with the substitution procedures
set forth in the applicable Purchase Agreement, which provisions shall be as set
forth in such agreement as if they were set forth herein. With respect to any
Substitute Mortgage Loan or Loans substituted by the Depositor or the
Responsible Party, the Depositor or the Responsible Party, as applicable, shall
deliver to the Trustee for the benefit of the Certificateholders the Mortgage
Note, the Mortgage, the related Assignment of Mortgage, and such other documents
and agreements as are required by Section 2.01, with the Mortgage Note endorsed
and the Mortgage assigned as required by Section 2.01. With respect to any
Substitute Mortgage Loan or Loans substituted by Meritage or Wilmington Finance,
the Depositor shall use reasonable efforts to cause Meritage or Wilmington
Finance, as applicable, to deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related Assignment of
Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. Notwithstanding anything to the contrary set forth in this
Agreement, no substitution is permitted to be made (a) in any calendar month
after the Determination Date for such month or (b) if the substitution were to
be made on or after the second anniversary of the Closing Date. Scheduled
Payments due with respect to Substitute Mortgage Loans in the Due Period of
substitution shall not be part of the Trust Fund and will be retained by the
Depositor or the Responsible Party on the next succeeding Distribution Date. For
the Due Period of substitution, distributions to Certificateholders will include
the Scheduled Payment due on any Deleted Mortgage Loan for such Due Period and
thereafter the Depositor or the Responsible Party shall be entitled to retain
all amounts received in respect of such Deleted Mortgage Loan.
(k) The applicable Servicer, based upon information provided by
the Depositor or the applicable Originator, shall amend the Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the removal of
such Deleted Mortgage Loan and the substitution of the Substitute Mortgage Loan
or Loans and such Servicer shall deliver the amended Mortgage Loan Schedule to
the Trustee or Custodian, as applicable. Upon such substitution, the Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement in all
respects, and, if the substitution is made by the Depositor, the Depositor shall
be deemed to have made with respect to such Substitute Mortgage Loan or Loans,
as of the date of substitution, the representations and warranties made pursuant
to Section 2.03(b) with respect to such Mortgage Loan. Upon any such
substitution and the deposit into the related Collection Account of the amount
required to be deposited therein in connection with such substitution as
described in Section 2.03(k), the Trustee or Custodian, as applicable, shall
release the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to the Depositor (in the case of a
Depositor Mortgage Loan) or the applicable Originator and shall execute and
deliver at the direction of the Depositor or the applicable Originator, such
instruments of transfer or assignment prepared by the Depositor or the
applicable Originator, in each case without recourse, as shall be necessary to
vest title in the Depositor or the applicable Originator, of the Trustee's
interest in any Deleted Mortgage Loan substituted for pursuant to this Section
2.03.
(l) For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable
Servicer will determine the amount (if any) by which the aggregate unpaid
principal balance of all such Substitute Mortgage Loans as of the date of
substitution is less than the aggregate unpaid principal balance of all such
Deleted Mortgage Loans. The amount of such shortage, plus an amount equal to the
sum of (i) any accrued and unpaid interest on the Deleted Mortgage Loans and
(ii) all unreimbursed Servicing Advances with respect to such Deleted Mortgage
Loans, or the amount of any similar shortage with respect to a Substitute
Mortgage Loan substituted by the Responsible Party under this Agreement
(collectively, the "Substitution Adjustment Amount"), shall be deposited into
the related Collection Account by the Depositor on or before the Distribution
Account Deposit Date for the Distribution Date following the Prepayment Period
during which the related Mortgage Loan became required to be purchased or
replaced hereunder. The Depositor shall use reasonable efforts to cause Meritage
or Wilmington Finance, as the case may be, to remit to the applicable Servicer
for deposit into the related Collection Account any Substitution Adjustment
Amount on or before the Distribution Account Deposit Date for the Distribution
Date following the Prepayment Period during which the related Mortgage Loan
became required to be purchased or replaced hereunder.
(m) Any Mortgage Loan repurchased pursuant to this Section 2.03
will be removed from the Trust Fund. The applicable Servicer shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the
removal of any Mortgage Loan repurchased and such Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee or Custodian, as applicable. For
purposes of determining the applicable Repurchase Price, any such repurchase
shall occur or shall be deemed to occur as of the last day of the applicable
Prepayment Period.
(n) In the event that the Depositor or the Responsible Party
shall have repurchased a Mortgage Loan pursuant to this Agreement, the
Repurchase Price therefor shall be deposited by the applicable Servicer in the
applicable Collection Account of the related Servicer pursuant to Section 3.10
on or before the Distribution Account Deposit Date for the Distribution Date
following the Prepayment Period during which the Depositor or the Responsible
Party, as applicable, repurchased such Mortgage Loan and upon such deposit of
the Repurchase Price and receipt of a Request for Release in the form of Exhibit
J hereto, the Trustee or Custodian, as applicable, shall release the related
Custodial File held for the benefit of the Certificateholders to such Person as
directed by the applicable Servicer, and the Trustee shall execute and deliver
at such Person's direction such instruments of transfer or assignment prepared
by such Person, in each case without recourse, as shall be necessary to transfer
title from the Trustee.
(o) In addition to any repurchase or substitution obligation by
the Responsible Party under this Agreement, the Responsible Party shall
indemnify the Depositor and its Affiliates, the Servicers, the Purchaser, the
Trustee, the Custodian and the Trust for any breach of any representation and
warranty of the Responsible Party set forth in this Agreement, in accordance
with the indemnification provisions relating to breaches of representations and
warranties (including without limitation, the representations and warranties set
forth in paragraph (aaa) of Schedule V to this Agreement) and defective Mortgage
Loans set forth in the First NLC Purchase Agreement, as if such indemnification
provisions were set forth herein for the benefit of the Depositor and its
Affiliates, the Servicers, the Purchaser, the Trustee and the Trust. This
indemnity shall survive the termination of this Agreement.
(p) It is understood and agreed by the parties hereto that the
obligation of the Depositor, the Responsible Party under this Agreement,
Meritage under the Meritage Agreements, or Wilmington Finance under the
Wilmington Finance Agreements, to cure, repurchase or substitute any Mortgage
Loan as to which a breach of a representation and warranty has occurred and is
continuing, together with any related indemnification obligations set forth
therein or herein, shall constitute the sole remedies against such Persons
respecting such breach available to Certificateholders, the Depositor (if
applicable) or the Trustee on their behalf.
(q) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by Meritage or Wilmington Finance pursuant to
the Meritage Agreements or the Wilmington Finance Agreements, as applicable, the
party discovering such breach shall give prompt written notice thereof to the
other parties to this Agreement and Meritage or Wilmington Finance, as
applicable. The Trustee shall take such action, with the Depositor's consent,
with respect to such breach under the Meritage Agreements or Wilmington Finance
Agreements, as the case may be, as may be necessary or appropriate to enforce
the rights of the Trust with respect thereto.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee or the Custodian for the benefit of
the Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized Denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is the Distribution Date occurring in
September 2035, which is the Distribution Date in the month following the month
in which the latest maturity date of any Mortgage Loan occurs. Amounts
distributable to the Class X Certificates (prior to any reduction for any Basis
Risk Payment or Swap Termination Payment), exclusive of any amounts received
from the Swap Provider, shall be deemed paid from the Upper-Tier REMIC in
respect of the Class X Interest to the Holders of the Class X Certificates prior
to distribution of any Basis Risk Payments to the LIBOR Certificates. For
federal income tax purposes, any amount distributed on the Offered Certificates
on any Distribution Date in excess of the amount distributable on their
Corresponding Class of Upper-Tier Regular Interest on such Distribution Date
shall be treated as having been paid from the Excess Reserve Fund Account or the
Swap Account, as applicable, and any amount distributable on such Corresponding
Class of Upper-Tier Regular Interest on such Distribution Date in excess of the
amount distributable on the Corresponding Class of Offered Certificates on such
Distribution Date shall be treated as having been paid to the Excess Reserve
Fund Account or the Swap Account, all pursuant to and as further provided in
Section 8.13.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee and the
Servicers that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.06 shall survive delivery of the
respective Custodial Files to the Trustee or to the Custodian, as the case may
be, and shall inure to the benefit of the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, each Servicer shall service and administer the
Mortgage Loans for which it is acting as Servicer in accordance with the terms
of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that such Servicer, any Subservicer or any
Affiliate of such Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, each Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, each Servicer
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, each Servicer in
its own name or in the name of a Subservicer is hereby authorized and empowered
by the Trustee when the applicable Servicer believes it appropriate in its best
judgment in accordance with Accepted Servicing Practices, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. Each Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
Each Servicer covenants that its computer and other systems used in servicing
the Mortgage Loans operate in a manner such that the Servicer can service the
Mortgage Loans in accordance with the terms of this Pooling and Servicing
Agreement. Each Servicer shall also comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under any standard
hazard insurance policy. Subject to Section 3.16, the Trustee shall execute, at
the written request of a Servicer, and furnish to such Servicer and any
Subservicer such documents provided to the Trustee as are necessary or
appropriate to enable such Servicer or any Subservicer to carry out its
servicing and administrative duties hereunder, and the Trustee hereby grants to
each Servicer, and this Agreement shall constitute, a power of attorney to carry
out such duties, including a power of attorney in the form of Exhibit R hereto
to take title to Mortgaged Properties after foreclosure in the name of and on
behalf of the Trustee. The Trustee shall execute a separate power of attorney in
favor of each Servicer for the purposes described herein to the extent necessary
or desirable to enable each Servicer to perform its duties hereunder. The
Trustee shall not be liable for the actions of any Servicer or any Subservicers
under such powers of attorney. Notwithstanding anything contained herein to the
contrary, no Servicer or Subservicer shall without the Trustee's consent: (i)
initiate any action, suit or proceeding solely under the Trustee's name without
indicating such Servicer's or Subservicer's, as applicable, representative
capacity, or (ii) take any action with the intent to, or which actually does
cause, the Trustee to be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards
of the preceding paragraph, each Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by a Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, a
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and none of the Servicers shall (i) permit
any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (except for a reduction of interest payments resulting
from the application of the Servicemembers Civil Relief Act or any similar state
statutes) or (ii) permit any modification, waiver or amendment of any term of
any Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) cause any Trust REMIC to
fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions, or (iii) except as provided in Section 3.07(a), waive any
Prepayment Charges.
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
Servicer from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the applicable Servicer shall be entitled to waive any such provisions on behalf
of the Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers. (a) Each Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the Mortgage Loans ("Subservicing Agreements"). The applicable Servicer shall,
within a reasonable period of time, give notice to the Trustee of any such
Subservicing Agreement. The Trustee shall not be required to review or consent
to such Subservicing Agreements and shall have no liability in connection
therewith.
(b) Each Subservicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
Each Servicer will examine each Subservicing Agreement to which it is a party
and will be familiar with the terms thereof. The terms of any Subservicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
Each Servicer and the respective Subservicers may enter into and make amendments
to the Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee,
without the consent of the Trustee. Any variation without the consent of the
Trustee from the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to such Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. Each Servicer shall deliver to the
Trustee and the Depositor copies of all Subservicing Agreements, and any
amendments or modifications thereof, promptly upon such Servicer's execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, each Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which such Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as such Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. Each Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
(d) As of the Closing Date, JPMorgan has appointed Chase Home
Finance LCC ("CHF") to act as subservicer with respect to JPMorgan's servicing
obligations under this Agreement. So long as JPMorgan is not a rated servicer by
each Rating Agency, JPMorgan agrees that prior to replacing CHF as subservicer,
other than with an affiliate of JPMorgan that is a rated servicer, it will
obtain confirmation from each Rating Agency that such replacement of CHF as
subservicer with respect to JPMorgan's servicing obligations related to the
Mortgage Loans will not cause the then current rating on any Class of
Certificates to be qualified, withdrawn or lowered by any Rating Agency and
agrees that any replacement subservicer shall agree to subservice in accordance
with the terms of this Agreement, including but not limited to the consideration
of whether to waive a Prepayment Charge hereunder.
Section 3.03 Successor Subservicers. Each Servicer shall be
entitled to terminate any Subservicing Agreement to which such Servicer is a
party and the rights and obligations of any Subservicer pursuant to any such
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement. In the event of termination of any Subservicer, all
servicing obligations of such Subservicer shall be assumed simultaneously by the
applicable Servicer party to the related Subservicing Agreement without any act
or deed on the part of such Subservicer or such Servicer, and such Servicer
either shall service directly the related Mortgage Loans or shall enter into a
Subservicing Agreement with a successor Subservicer which qualifies under
Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer party to the related Subservicing Agreement shall, for any reason, no
longer be a Servicer (including termination due to an Event of Default).
Section 3.04 Liability of the Servicers. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and a Subservicer or reference to
actions taken through a Subservicer or otherwise, such Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
such Servicer alone were servicing and administering such Mortgage Loans. Each
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of such Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
related Servicer alone, and the Trustee (or any successor to such Servicer)
shall not be deemed a party thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.06. Each Servicer shall be solely liable for all fees owed by
it to any Subservicer, irrespective of whether such Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements
by Trustee. In the event a Servicer at any time shall for any reason no longer
be a Servicer (including by reason of the occurrence of an Event of Default),
the Trustee, or its designee, or the successor Servicer if the successor is not
the Trustee, shall thereupon assume all of the rights and obligations of such
Servicer under each Subservicing Agreement that such Servicer may have entered
into, with copies thereof provided to the Trustee, or the successor Servicer if
the successor is not the Trustee, prior to the Trustee, or the successor
Servicer if the successor is not the Trustee, assuming such rights and
obligations, unless the Trustee elects to terminate any Subservicing Agreement
in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
Servicer shall be deemed, subject to Section 3.03, to have assumed all of such
Servicer's interest therein and to have replaced such Servicer as a party to
each Subservicing Agreement to which the predecessor Servicer was a party to the
same extent as if each Subservicing Agreement had been assigned to the assuming
party, except that (i) such Servicer shall not thereby be relieved of any
liability or obligations under any such Subservicing Agreement that arose before
it ceased to be a Servicer and (ii) none of the Depositor, the Trustee, their
designees or any successor to such Servicer shall be deemed to have assumed any
liability or obligation of such Servicer that arose before it ceased to be a
Servicer.
Such Servicer at its expense shall, upon request of the Trustee,
its designee or the successor Servicer deliver to the assuming party all
documents and records relating to each Subservicing Agreement to which it is a
party and the Mortgage Loans then being serviced by it and an accounting of
amounts collected and held by or on behalf of it, and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a)
Each Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Mortgage Loans, and shall, to the extent
such procedures shall be consistent with this Agreement and the terms and
provisions of any applicable Insurance Policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing and
Accepted Servicing Practices, each Servicer may (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the Due Dates for
the Scheduled Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the applicable Servicer shall make
timely advances on such Mortgage Loan during such extension pursuant to Section
4.01 and in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements, subject to Section
4.01(d) pursuant to which such Servicer shall not be required to make any such
advances that are Nonrecoverable P&I Advances. Notwithstanding the foregoing, a
Servicer may waive, or permit a Subservicer to waive, in whole or in part, a
Prepayment Charge only under the following circumstances: (i) such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of such Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan,
(ii) such Prepayment Charge is not permitted to be collected by applicable
federal, state or local law or regulation or (iii) the collection of such
Prepayment Charge would be considered "predatory" pursuant to written guidance
published or issued by any applicable federal, state or local regulatory
authority acting in its official capacity and having jurisdiction over such
matters. If a Prepayment Charge is waived other than as permitted by the prior
sentence, then the applicable Servicer is required to pay the amount of such
waived Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the related Collection Account
together with and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited into the Collection Account; provided, however,
that the applicable Servicer shall not have an obligation to pay the amount of
any uncollected Prepayment Charge if the failure to collect such amount is the
direct result of inaccurate or incomplete information on the Mortgage Loan
Schedule in effect at such time.
(b) (i) The Trustee shall establish and maintain the Excess
Reserve Fund Account, on behalf of the Class X Certificateholders, to receive
any Basis Risk Payment and to secure their limited recourse obligation to pay to
the LIBOR Certificateholders Basis Risk CarryForward Amounts (prior to using any
Net Swap Receipts). For the avoidance of doubt, any Basis Risk CarryForward
Amounts shall be paid to the Offered Certificates first from the Excess Reserve
Fund Account and then from the Swap Account.
(ii) On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment for such date into the Excess Reserve
Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis
Risk CarryForward Amount on any Class of Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(S), the lesser of (x) the Class X
Distributable Amount (without regard to the reduction in clause (iii) in the
definition thereof) (to the extent remaining after the distributions specified
in Sections 4.02(a)(iii)(A)-(R)) and (y) the aggregate Basis Risk CarryForward
Amounts for such Distribution Date and (2) withdraw from the Excess Reserve Fund
Account amounts necessary to pay to such Class or Classes of Certificates the
Basis Risk CarryForward Amount. Such payments, along with payments from the Swap
Account, shall be allocated to those Classes on a pro rata basis based upon the
amount of Basis Risk CarryForward Amount owed to each such Class and shall be
paid in the priority set forth in Section 4.02(a)(iii)(T).
(ii) The Trustee shall account for the Excess Reserve Fund
Account as an asset of a grantor trust under subpart E, Part I of the
subchapter J of the Code and not an asset of any Trust REMIC. The
beneficial owners of the Excess Reserve Fund Account are the Class X
Certificateholders. For all federal tax purposes, amounts transferred by
the Upper-Tier REMIC to the Excess Reserve Fund Account shall be treated
as distributions by the Trustee to the Class X Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee to
the LIBOR Certificateholders shall be accounted for by the Trustee as
amounts paid first to the Holders of the Class X Certificates and then
to the respective Class or Classes of LIBOR Certificates. In addition,
the Trustee shall account for the LIBOR Certificateholders' rights to
receive payments of Basis Risk CarryForward Amounts (along with payments
of Basis Risk CarryForward Amounts and Upper-Tier CarryForward Amounts
from the Swap Account) as rights in a limited recourse interest rate cap
contract written by the Class X Certificateholders in favor of the LIBOR
Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement,
the Trustee shall not be required to make any payments from the Excess
Reserve Fund Account except as expressly set forth in this Section
3.07(c) and Sections 4.02(a)(iii)(T) and (V).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Depositor shall cause to be
deposited into the Distribution Account on the Closing Date the Closing Date
Deposit Amount. The Trustee shall, promptly upon receipt, deposit in the
Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicers to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicers pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to
be deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee in writing to
withdraw such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
notice to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 4.02.
(e) The Trustee may invest the funds in the Distribution Account,
in one or more Permitted Investments, in accordance with Section 3.12. Each
Servicer shall direct the Trustee to withdraw from the Distribution Account and
to remit to such Servicer no less than monthly, all income and gain realized
from the investment of the portion of funds deposited in the Distribution
Account by such Servicer (except during the Trustee Float Period). The Trustee
may withdraw from the Distribution Account any income or gain earned from the
investment of funds deposited therein during the Trustee Float Period for its
own benefit.
(f) Each Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the related
Collection Account within a reasonable period of time prior to any change
thereof.
(g) In order to comply with its duties under the USA Patriot Act
of 2001, the Trustee shall obtain and verify certain information and
documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address, and other identifying information.
(h) On or prior to the Determination Date, the Custodian shall
deliver an invoice to the Trustee, setting forth the amount of the Custodian Fee
for the related Distribution Date. To the extent not set forth on such invoice,
the Trustee shall calculate the Custodian Fee Rate for such Distribution Date,
based upon the Custodian Fee as set forth in each such invoice. On the
Distribution Date, the Trustee shall remit each Custodian Fee to the Custodian
from the Distribution Account.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more accounts
(collectively, the "Subservicing Account"). The Subservicing Account shall be an
Eligible Account and shall otherwise be acceptable to the related Servicer. The
Subservicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less
its servicing compensation to the extent permitted by the Subservicing
Agreement, and shall thereafter deposit such amounts in the Subservicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter deposit such
proceeds in the Collection Account of the related Servicer or remit such
proceeds to the related Servicer for deposit in the Collection Account of the
related Servicer not later than two Business Days after the deposit of such
amounts in the Subservicing Account. For purposes of this Agreement, such
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) Each Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract") serviced by such
Servicer. Each Tax Service Contract shall be assigned to the Trustee, or a
successor Servicer at the applicable Servicer's expense in the event that a
Servicer is terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not otherwise provided pursuant to the Tax Service Contracts described
in paragraph (a) above, each Servicer undertakes to perform such functions with
respect to the Mortgage Loans serviced by such Servicer. To the extent the
related Mortgage provides for Escrow Payments, the related Servicer shall
establish and maintain, or cause to be established and maintained, one or more
accounts (the "Escrow Accounts"), which shall be Eligible Accounts. Each
Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, all collections from the Mortgagors (or related advances from
Subservicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments")
collected on account of the Mortgage Loans and shall thereafter deposit such
Escrow Payments in the Escrow Accounts, in no event more than two Business Days
after the deposit of such funds in the clearing account, for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may be made only to (i)
effect payment of taxes, assessments, hazard insurance premiums, and comparable
items; (ii) reimburse such Servicer (or a Subservicer to the extent provided in
the related Subservicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of such Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
to transfer such funds to a replacement Escrow Account that meets the
requirements hereof; (vii) recover amounts deposited in error. As part of its
servicing duties, each Servicer or Subservicers shall pay to the Mortgagors
interest on funds in Escrow Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Escrow Accounts is insufficient, to
pay such interest from its or their own funds, without any reimbursement
therefor. To the extent that a Mortgage does not provide for Escrow Payments,
the applicable Servicer shall determine whether any such payments are made by
the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The applicable
Servicer assumes full responsibility for the payment of all such bills within
such time and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments; provided, however, that such advances are deemed to be Servicing
Advances.
Section 3.10 Collection Accounts. (a) On behalf of the Trustee,
each Servicer shall establish and maintain, or cause to be established and
maintained, one or more separate Eligible Accounts (each such account or
accounts, a "Collection Account"), held in trust for the benefit of the Trustee.
On behalf of the Trustee, each Servicer shall deposit or cause to be deposited
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after such Servicer's receipt thereof, and shall
thereafter deposit in the related Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the
extent such Insurance Proceeds and Condemnation Proceeds are not to be
applied to the restoration of the related Mortgaged Property or released
to the related Mortgagor in accordance with the express requirements of
law or in accordance with Accepted Servicing Practices and Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments
with respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer
pursuant to the second paragraph of Section 3.13(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to
Section 3.07(a)) by such Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by each Servicer in the related Collection Account and shall,
upon collection, belong to the applicable Servicer as additional compensation
for its servicing activities. In the event a Servicer shall deposit in the
related Collection Account any amount not required to be deposited therein, it
may at any time withdraw such amount from its Collection Account, any provision
herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. Each
Servicer shall give notice to the Trustee of the location of the related
Collection Account maintained by it when established and prior to any change
thereof in accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Accounts. (a) Each
Servicer shall, from time to time, make withdrawals from the related Collection
Account for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Trustee
(A) the Trustee Fee with respect to such Distribution Date and (B) all
Available Funds in respect of the related Distribution Date together
with all amounts representing Prepayment Charges from the Mortgage Loans
received by the applicable Servicer during the related Prepayment
Period;
(ii) to reimburse such Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 (such Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(iii) to pay such Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect
to each Mortgage Loan serviced by such Servicer or Subservicer, but only
to the extent of any Late Collections, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds or other amounts as may be
collected by such Servicer from a Mortgagor, or otherwise received with
respect to such Mortgage Loan (or the related REO Property) (such
Servicer's right for recovery or reimbursement has priority over the
Trust as stated in the definition of "Available Funds");
(iv) to pay to such Servicer as servicing compensation (in
addition to the Servicing Fee) on the Remittance Date any interest or
investment income earned on funds deposited in its Collection Account;
(v) to pay to the applicable Responsible Party or the Depositor,
as applicable, with respect to each Mortgage Loan that has previously
been repurchased or replaced pursuant to this Agreement, all amounts
received thereon subsequent to the date of purchase or substitution, as
further described herein;
(vi) to reimburse such Servicer for (A) any P&I Advance or
Servicing Advance previously made which such Servicer has determined to
be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent
not recoverable from Liquidation Proceeds, Insurance Proceeds or other
amounts received with respect to the related Second Lien Mortgage Loan
under Section 3.11(a)(iii) (such Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(vii) to pay, or to reimburse such Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan
serviced by such Servicer pursuant to Section 3.15 (such Servicer's
right for recovery or reimbursement has priority over the Trust);
(viii) to reimburse such Servicer or the Depositor for expenses
incurred by or reimbursable to such Servicer or the Depositor, as the
case may be, pursuant to Section 6.03 (such Servicer's right for
recovery or reimbursement has priority over the Trust as stated in the
definition of "Available Funds");
(ix) to reimburse such Servicer or the Trustee, as the case may
be, for expenses reasonably incurred in respect of the breach or defect
giving rise to the repurchase obligation of the Responsible Party or the
Depositor, as applicable, that were included in the Repurchase Price of
the Mortgage Loan, including any expenses arising out of the enforcement
of the repurchase obligation, to the extent not otherwise paid pursuant
to the terms hereof (such Servicer's right for recovery or reimbursement
has priority over the Trust as stated in the definition of "Available
Funds");
(x) to withdraw any amounts deposited in the related Collection
Account in error;
(xi) to withdraw any amounts held in the related Collection
Account and not required to be remitted to the Trustee on the Remittance
Date occurring in the month in which such amounts are deposited into
such Collection Account, to reimburse such Servicer for xxxxxxxxxxxx X&X
Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the related Collection Account upon
termination of this Agreement;
(b) Each Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. Each Servicer shall provide written notification (as set forth
in Section 4.01(d)) to the Trustee, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the related Collection Account
pursuant to subclause (a)(vi) above.
(c) Each Servicer shall be responsible for reviewing and
reconciling the applicable Collection Account in accordance with Accepted
Servicing Practices. Each Servicer shall act to promptly to resolve any
discrepancies.
Section 3.12 Investment of Funds in the Collection Accounts and
the Distribution Account. (a) Each Servicer may invest the funds in the related
Collection Account and the related Escrow Account (to the extent permitted by
law and the related Mortgage Loan documents) and the Trustee may (but is not
obligated to) invest funds in the Distribution Account during the Trustee Float
Period, and, with respect to the portion of funds in the Distribution Account
deposited by a Servicer, shall (except during the Trustee Float Period) invest
such funds in the Distribution Account at the direction of such Servicer (for
purposes of this Section 3.12, such Accounts are referred to as an "Investment
Account"), in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement; provided, however, that the
Trustee shall have no obligation to invest funds deposited into the Distribution
Account by a Servicer on the Remittance Date later than 10:00 a.m. (Pacific
Standard Time). If no investment instruction is given in a timely manner, the
Trustee shall hold the funds in the Distribution Account uninvested. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account (other than investments made during
the Trustee Float Period) shall be made in the name of the applicable Servicer.
The applicable Servicer shall be entitled to sole possession (except with
respect to investment direction of funds and any income and gain realized on any
investment in the Distribution Account during the Trustee Float Period, which
shall be for the sole benefit of the Trustee) over each such related investment,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the applicable Servicer, or with respect to investments
during the Trustee Float Period, the Trustee or its agent (with a copy to the
Trustee or its agent if related to investment of funds in the Distribution
Account not during the Trustee Float Period), together with any document of
transfer necessary to transfer title to such investment to the applicable
Servicer, or with respect to investments during the Trustee Float Period, the
Trustee or its agent. In the event amounts on deposit in an Investment Account
are at any time invested in a Permitted Investment payable on demand, the
applicable Servicer, or with respect to investments during the Trustee Float
Period, the Trustee may:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the
last day such Permitted Investment may otherwise mature
hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the related Collection Account or Escrow Account held by or on
behalf of the related Servicer, shall be for the benefit of such Servicer and
shall be subject to its withdrawal in the manner set forth in Section 3.11. Such
Servicer shall deposit in its Collection Account or Escrow Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of the
portion of funds deposited in the Distribution Account by a Servicer and held by
the Trustee, shall be for the benefit of such Servicer (except for any income or
gain realized from the investment of funds on deposit in the Distribution
Account during the Trustee Float Period, which shall be for the benefit of the
Trustee) and shall be subject to the Trustee's withdrawal in the manner set
forth in Section 3.07(e). Each Servicer shall deposit in the Distribution
Account (except with respect to losses incurred during the Trustee Float Period)
the amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(d) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee shall take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings.
(e) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment or lack of investment of funds held in
any Investment Account or the Distribution Account (except that if any losses
are incurred from the investment of funds deposited in the Distribution Account
during the Trustee Float Period, the Trustee shall be responsible for
reimbursing the Trust for such loss immediately upon realization of such loss)
if made in accordance with this Section 3.12.
(f) The Trustee or its Affiliates shall be permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) Each Servicer shall cause to be maintained
for each Mortgage Loan serviced by such Servicer fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the least of (i) the outstanding principal balance of such Mortgage Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. Each Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property serviced by such
Servicer in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property. Each Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by any Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by any Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Trustee, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards and
flood insurance has been made available, the applicable Servicer will cause to
be maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that any Servicer shall obtain and maintain a
blanket policy with an insurer either (i) acceptable to Xxxxxx Mae or Xxxxxxx
Mac or (ii) having a General Policy Rating of B:III or better from Best's (or
such other rating that is comparable to such rating) insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case such Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the related Collection Account from its own funds the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, each Servicer agrees to prepare and present, on behalf of itself and the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Mae or
Xxxxxxx Mac, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. Each Servicer shall provide the Trustee upon
request with copies of any such insurance policies and fidelity bond. Each
Servicer shall be deemed to have complied with this provision if an Affiliate of
the applicable Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to such Servicer. Any such errors and omissions
policy and fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Trustee. Each Servicer shall also cause each
Subservicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"Due-on-Sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, such Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If a Servicer reasonably believes it is unable under applicable law to enforce
such "Due-on-Sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, such Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note; provided, that no such substitution shall be effective unless
such person satisfies the underwriting criteria of such Servicer and such
substitution is in the best interest of the Certificateholders as determined by
such Servicer. In connection with any assumption, modification or substitution,
such Servicer shall apply such underwriting standards and follow such practices
and procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. No
Servicer shall take or enter into any assumption and modification agreement,
however, unless (to the extent practicable in the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
Each Servicer shall notify the Trustee that any such substitution, modification
or assumption agreement has been completed and shall forward to the Trustee the
executed original of such substitution or assumption agreement, which document
shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. Each
Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which may include
an acquisition of REO Property) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. Each Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Trustee, taking into
account, among other things, the timing of foreclosure proceedings; provided,
however, with respect to any Second Lien Mortgage Loan for which the related
first lien mortgage loan is not included in the Trust Fund, if, after such
Mortgage Loan becomes 180 days or more delinquent, the applicable Servicer
determines that a significant net recovery is not possible through foreclosure,
such Mortgage Loan may be charged off and the Mortgage Loan will be treated as a
Liquidated Mortgage Loan giving rise to a Realized Loss. The foregoing is
subject to the provisions that, in any case in which Mortgaged Property shall
have suffered damage from an uninsured cause, a Servicer shall not be required
to expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i) that such restoration will increase the net
proceeds of liquidation of the related Mortgage Loan to the Trustee, after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by such Servicer through Insurance Proceeds, Condemnation Proceeds
or Liquidation Proceeds from the related Mortgaged Property, as contemplated in
Section 3.11. Each Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as
any recovery resulting from a partial collection of Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the applicable Servicer or any Subservicer for any related
unreimbursed Servicing Advances, pursuant to Section 3.11 or 3.17; second, to
reimburse the applicable Servicer for any related xxxxxxxxxxxx X&X Advances,
pursuant to Section 3.11; third, to accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the Mortgage Rate, to the date of the
liquidation or REO Disposition, or to the Due Date prior to the Remittance Date
on which such amounts are to be distributed if not in connection with a
liquidation or REO Disposition; and fourth, as a recovery of principal of the
Mortgage Loan. If the amount of the recovery so allocated to interest is less
than a full recovery thereof, that amount will be allocated as follows: first,
to unpaid Servicing Fees; and second, as interest at the Mortgage Rate (net of
the Servicing Fee Rate). The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the applicable Servicer or any Subservicer
pursuant to Section 3.11 or 3.17. The portions of the recovery so allocated to
interest at the Mortgage Rate (net of the Servicing Fee Rate) and to principal
of the Mortgage Loan shall be applied as follows: first, to reimburse the
applicable Servicer or any Subservicer for any related unreimbursed Servicing
Advances in accordance with Section 3.11 or 3.17, and second, to the Trustee in
accordance with the provisions of Section 4.02, subject to the last paragraph of
Section 3.17(f) with respect to certain excess recoveries from an REO
Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, such Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, such
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the
applicable Servicer shall determine consistent with Accepted Servicing Practices
how the Servicer shall proceed with respect to the Mortgaged Property. In the
event (a) the environmental inspection report indicates that the Mortgaged
Property is contaminated by hazardous or toxic substances or wastes and (b) the
applicable Servicer determines, consistent with Accepted Servicing Practices, to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, such
Servicer shall be reimbursed for all reasonable costs associated with such
foreclosure or acceptance of a deed in lieu of foreclosure and any related
environmental clean-up costs, as applicable, from the related Liquidation
Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse
such Servicer, such Servicer shall be entitled to be reimbursed from amounts in
the related Collection Account pursuant to Section 3.11. In the event the
applicable Servicer determines not to proceed with foreclosure or acceptance of
a deed in lieu of foreclosure, such Servicer shall be reimbursed from general
collections for all Servicing Advances made with respect to the related
Mortgaged Property from the related Collection Account pursuant to Section 3.11.
The Trustee shall not be responsible for any determination made by the
applicable Servicer pursuant to this paragraph or otherwise.
In the event a Servicer elects to charge-off a Second Lien
Mortgage Loan 180 days or more delinquent pursuant to this Section 3.15, no
Second Lien Mortgage Loan shall be characterized as a Liquidated Mortgage Loan,
unless the Depositor consents in writing to such characterization after the
applicable Servicer has provided the Depositor with a combined equity analysis
of such Second Lien Mortgage Loan and the related first lien mortgage loan;
provided, that if the Depositor has failed to notify the applicable Servicer
within 3 Business Days of receipt of such combined equity analysis, then the
Depositor shall be deemed to have consented to such characterization. In the
event a Servicer elects to charge off a Second Lien Mortgage Loan 180 days or
more delinquent pursuant to this Section 3.15, such Servicer shall notify the
Trustee of such election, which notice may be provided in a Servicer Remittance
Report delivered pursuant to Section 4.03(d). JPMorgan may elect to charge-off a
Second Lien Mortgage Loan pursuant to this Section 3.15 without such written
consent, so long as such Second Lien Mortgage Loan is 180 days or more
delinquent.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in
full of any Mortgage Loan, or the receipt by a Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, such
Servicer will, on or before the last day of the month in which such payment in
full occurs, notify the Trustee, by a certification (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the related
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Custodial File by
submitting a Request for Release (in writing or an electronic format acceptable
to the Trustee or the Custodian, as applicable) to the Trustee or Custodian, as
applicable. Upon receipt of such certification and Request for Release, the
Trustee or Custodian, as applicable, shall promptly release the related
Custodial File to such Servicer within five (5) Business Days. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee or Custodian,
as applicable, shall, upon request of a Servicer and delivery to the Trustee or
the Custodian, as applicable, of a Request for Release, release the related
Custodial File to such Servicer, and the Trustee or Custodian, as applicable,
shall, at the direction of such Servicer, execute such documents as shall be
necessary to the prosecution of any such proceedings and such Servicer shall
retain the Mortgage File in trust for the benefit of the Trustee. Such Request
for Release shall obligate the applicable Servicer to return each and every
document previously requested from the Custodial File to the Trustee or the
Custodian, as applicable, when the need therefor by such Servicer no longer
exists, unless the Mortgage Loan has been charged-off or liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
related Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and such Servicer has delivered to the Trustee or the Custodian,
as applicable, a certificate of a Servicing Officer certifying as to the name
and address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
charged-off or liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
related Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, a copy of the Request for Release shall be released
by the Trustee or the Custodian, as applicable, to the applicable Servicer or
its designee upon request therefor. Upon receipt of a Request for Release under
this Section 3.16, the Trustee or the Custodian, as applicable, shall deliver
the related Custodial File to the requesting Servicer (at such Servicer's
expense); provided, however, that in the event a Servicer has not previously
received copies of the relevant Mortgage Loan Documents necessary to service the
related Mortgage Loan in accordance with Accepted Servicing Practices, the
Responsible Party shall reimburse the applicable Servicer for any overnight
courier charges incurred for the requested Custodial Files.
Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the applicable Servicer copies of any court
pleadings, requests for trustee's sale or other documents reasonably necessary
to the foreclosure or trustee's sale in respect of a Mortgaged Property or to
any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity, or shall exercise and deliver to such Servicer a
power of attorney sufficient to authorize such Servicer to execute such
documents on its behalf. Each such certification shall include a request that
such pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
applicable Servicer shall cause the deed or certificate of sale to be issued in
the name of the Trustee, on behalf of the Certificateholders. Upon written
request by the applicable Servicer, the Trustee shall provide such Servicer with
a power of attorney prepared by such Servicer with respect to such REO Property
in the form of Exhibit R.
(b) Each Servicer shall manage, conserve, protect and operate
each REO Property for the Trustee solely for the purpose of its prompt
disposition and sale. Each Servicer, either itself or through an agent selected
by such 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. Each 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 such Servicer deems to be in the best interest of the Trustee. The
Trustee shall have no obligations with respect to any REO Dispositions.
(c) Each Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(d) Each Servicer shall deposit net of reimbursement to such
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited, in no event more than
two (2) Business Days following such Servicer's receipt thereof, in the related
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(e) Each Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in excess
of the unpaid principal balance of the related Mortgage Loan, plus all unpaid
REO Imputed Interest thereon through the date of the REO Disposition, shall be
retained by the applicable Servicer as additional servicing compensation.
(g) Each Servicer shall use its reasonable best efforts to sell,
or cause its Subservicer to sell, in accordance with Accepted Servicing
Practices, any REO Property serviced by such Servicer or Subservicer as soon as
possible, but in no event later than the conclusion of the third calendar year
beginning after the year of its acquisition by Pooling-Tier REMIC-1 unless (i)
such Servicer applies for an extension of such period from the Internal Revenue
Service pursuant to the REMIC Provisions and Code Section 856(e)(3), in which
event such REO Property shall be sold within the applicable extension period, or
(ii) such Servicer obtains for the Trustee an Opinion of Counsel, addressed to
the Depositor, the Trustee and such Servicer, to the effect that the holding by
the Pooling-Tier REMIC-1 of such REO Property subsequent to such period will not
result in the imposition of taxes on "prohibited transactions" as defined in
Section 860F of the Code or cause any Trust REMIC to fail to qualify as a REMIC
under the REMIC Provisions or comparable provisions of relevant state laws at
any time. Each Servicer shall manage, conserve, protect and operate each REO
Property serviced by such Servicer for the Trustee solely for the purpose of its
prompt disposition and sale in a manner which does not cause such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) or result in the receipt by the Pooling-Tier REMIC-1 of any "income
from non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the
Code or any "net income from foreclosure property" which is subject to taxation
under Section 860G(a)(1) of the Code. Pursuant to its efforts to sell such REO
Property, the applicable Servicer shall either itself or through an agent
selected by such Servicer protect and conserve such REO Property in the same
manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Trustee on behalf of the Certificateholders, rent the same, or
any part thereof, as such Servicer deems to be in the best interest of the
Trustee on behalf of the Certificateholders for the period prior to the sale of
such REO Property; provided, however, that any rent received or accrued with
respect to such REO Property qualifies as "rents from real property" as defined
in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the applicable Servicer shall adjust the Mortgage
Rate on the related Adjustment Date and shall adjust the Scheduled 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.
In the event that an Index becomes unavailable or otherwise unpublished, the
related Servicer shall select a comparable alternative index over which it has
no direct control and which is readily verifiable. Each 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 Rate and
Scheduled Payment adjustments. Each Servicer shall promptly, upon written
request therefor, deliver to the Trustee such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by a Servicer or the receipt of
notice from the Trustee that a Servicer has failed to adjust a Mortgage Rate or
Scheduled Payment in accordance with the terms of the related Mortgage Note,
such Servicer shall deposit in the related Collection Account from its own funds
the amount of any interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The applicable Servicer shall provide, or cause
the Subservicer to provide, to the Depositor, the Trustee, the OTS or the FDIC
and the examiners and supervisory agents thereof, access to the documentation
regarding the Mortgage Loans in its possession required by applicable
regulations of the OTS. Such access shall be afforded without charge, but only
upon five (5) Business Days' prior written request and during normal business
hours at the offices of the applicable Servicer or any Subservicer. Nothing in
this Section shall derogate from the obligation of any such party to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of any such party to provide access as provided in this Section
as a result of such obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee. Each Servicer shall account fully to the
Trustee for any funds received by such Servicer or which otherwise are collected
by such Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan serviced by such Servicer. All Mortgage
Files and funds collected or held by, or under the control of, a Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including, but not limited to,
any funds on deposit in its Collection Account, shall be held by such Servicer
for and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
Each Servicer also agrees that it shall not create, incur or subject any
Mortgage File or any funds that are deposited in any Collection Account, the
Distribution Account or any Escrow Account, or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that such Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to such Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, each Servicer shall, with respect to each Mortgage Loan
serviced by it, be entitled to retain from deposits to its Collection Account
and from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with respect to each
Mortgage Loan (less any portion of such amounts retained by any Subservicer). In
addition, each Servicer shall be entitled to recover unpaid Servicing Fees out
of related late collections to the extent permitted in Section 3.11. The right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of a Servicer's responsibilities and
obligations under this Agreement; provided, however, that each Servicer may pay
from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption
or modification fees, late payment charges, NSF fees, reconveyance fees and
other similar fees and charges (other than Prepayment Charges) shall be retained
by a Servicer only to the extent such fees or charges are received by such
Servicer. Each Servicer shall also be entitled pursuant to Section 3.11(a)(iv)
to withdraw from the related Collection Account, and pursuant to Section
3.07(e), to direct the Trustee to withdraw from the Distribution Account and
remit to the applicable Servicer (except for monies invested during the Trustee
Float Period), as additional servicing compensation, interest or other income
earned on the related portions of deposits therein. Each Servicer shall also be
entitled, as additional servicing compensation, to interest or other income
earned on deposits in the related Escrow Account (to the extent permitted by law
and the related Mortgage Loan documents) in accordance with Section 3.12. Each
Servicer shall also be entitled to retain net Prepayment Interest Excesses (to
the extent not required to offset Prepayment Interest Shortfalls), but only to
the extent such amounts are received by such Servicer.
(c) Each Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including payment
of premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by such Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. Each Servicer
will deliver or cause to be delivered to the Depositor, the Rating Agencies and
the Trustee on or before March 15th of each calendar year, commencing in 2006,
an Officer's Certificate stating, as to each signatory thereof, that (i) a
review of the activities of such Servicer during the preceding calendar year and
of performance under this Agreement or a similar agreement has been made under
such officers' supervision, and (ii) to the best of such officers' knowledge,
based on such review, such Servicer has fulfilled in all material respects 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 officers and the nature and status thereof. Promptly after
receipt of such Officer's Certificate, the Depositor shall review such Officer's
Certificate and, if applicable, consult with the applicable Servicer as to the
nature of any defaults by such Servicer in the fulfillment of any of such
Servicer's obligations. The obligations of a Servicer under this Section apply
to each Servicer that serviced a Mortgage Loan during the applicable period,
whether or not such Servicer is acting as a Servicer at the time such Officer's
Certificate is required to be delivered.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Not later than March 15th of each calendar year
commencing in 2006, each Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Depositor, the Rating Agencies and the Trustee a report stating that (i) it has
obtained a letter of representation regarding certain matters from the
management of such Servicer which includes an assertion that such Servicer has
complied with certain minimum residential mortgage loan servicing standards,
identified in the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers Association of America, with respect to the
servicing of residential mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. In rendering its report such firm may rely, as to matters relating
to the direct servicing of residential mortgage loans by Subservicers, upon
comparable reports of firms of independent certified public accountants rendered
on the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those Subservicers.
Promptly after receipt of such report, the Depositor shall review such report
and, if applicable, consult with the applicable Servicer as to the nature of any
defaults by such Servicer in the fulfillment of any of such Servicer's
obligations. The obligations of a Servicer under this Section apply to each
Servicer that serviced a Mortgage Loan during the applicable period, whether or
not such Servicer is acting as a Servicer at the time such statement is required
to be delivered.
Section 3.24 Trustee to Act as Servicer. (a) Subject to Section
7.02, in the event that any Servicer shall for any reason no longer be a
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of such
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of such predecessor Servicer pursuant to Section 3.10 or any
acts or omissions of such predecessor Servicer hereunder), (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03, (iii)
responsible for expenses of such predecessor Servicer pursuant to Section 2.03
or (iv) deemed to have made any representations and warranties of such Servicer
hereunder. Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by a Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If any Servicer shall for any reason no longer be a Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
such Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of such Servicer thereunder; and such Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The applicable Servicer shall, upon request of the Trustee,
but at the expense of such Servicer, deliver to the assuming party all documents
and records relating to each Subservicing Agreement (if any) to which it is
party and the Mortgage Loans then being serviced thereunder and an accounting of
amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of such Subservicing Agreement to the
assuming party.
Section 3.25 Compensating Interest. Each Servicer shall remit to
the Trustee on each Remittance Date for deposit in the Distribution Account an
amount from its own funds equal to the Compensating Interest payable by such
Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, each Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) Each Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans required to be serviced by it and the
related borrowers and shall provide all required notices thereunder.
Section 3.27 Transfer of Servicing for the Mortgage Loans. Prior
to the Servicing Transfer Date, JPMorgan shall have complied with each of the
servicing transfer requirements in accordance with HomEq's commercially
reasonable instructions, provided to JPMorgan in writing and reasonably in
advance of the Servicing Transfer Date.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances. (a) The amount of P&I Advances to be made
by each Servicer for any Remittance Date shall equal, subject to Section
4.01(c), the sum of (i) the aggregate amount of Scheduled Payments (with each
interest portion thereof net of the related Servicing Fee), due during the Due
Period immediately preceding such Remittance Date in respect of the Mortgage
Loans serviced by such Servicer, which Scheduled Payments were not received as
of the close of business on the related Determination Date (provided, however,
that with respect to any Balloon Loan that is delinquent on its maturity date,
the applicable Servicer will not be required to advance the principal portion of
the related balloon payment but will be required to continue to make P&I
Advances in accordance with this Section 4.01(a) with respect to such Balloon
Loan in an amount equal to the assumed scheduled interest that would otherwise
be due based on the original amortization schedule for such Balloon Loan (with
interest at the Adjusted Net Mortgage Rate)), plus (ii) with respect to each REO
Property serviced by such Servicer, which REO Property was acquired during or
prior to the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the related Collection Account for
distribution on such Remittance Date.
(b) On each Remittance Date, each Servicer shall remit in
immediately available funds to the Trustee an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties serviced by such Servicer for the related Remittance Date either
(i) from its own funds or (ii) from the related Collection Account, to the
extent of funds held therein for future distribution (in which case, it will
cause to be made an appropriate entry in the records of the related Collection
Account that Amounts Held for Future Distribution have been, as permitted by
this Section 4.01, used by such Servicer in discharge of any such P&I Advance)
or (iii) in the form of any combination of (i) and (ii) aggregating the total
amount of P&I Advances to be made by such Servicer with respect to such Mortgage
Loans and REO Properties. Any Amounts Held for Future Distribution and so used
shall be appropriately reflected in such Servicer's records and replaced by such
Servicer by deposit in the related Collection Account on or before any future
Remittance Date to the extent required.
(c) The obligation of each Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by any
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by any Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Trustee.
(e) Except as otherwise provided herein, the applicable Servicer
shall be entitled to reimbursement pursuant to Section 3.11 for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall allocate from amounts then on deposit in the
Distribution Account in the following order of priority and to the extent of the
Available Funds remaining and, on such Distribution Date, shall make
distributions on the Certificates in accordance with such allocation:
(i) to the holders of each Class of LIBOR Certificates and to the
Swap Account in the following order of priority:
(A) to the Swap Account, the sum of (x) all Net Swap Payments
and (y) any Swap Termination Payment owed to the Swap Provider
other than a Defaulted Swap Termination Payment;
(B) from the Interest Remittance Amounts for both the Loan
Groups, to the Class A Certificates, the related Accrued
Certificate Interest Distribution Amounts and any related Unpaid
Interest Amounts for such Distribution Date, pursuant to the
allocation set forth in clauses (iv) and (v) of this Section
4.02(a);
(C) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the Class M-4
Certificates, the Accrued Certificate Interest Distribution
Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(K) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date
or (2) with respect to which a Trigger Event is in effect, to the
holders of the related Class or Classes of LIBOR Certificates then
entitled to distributions of principal as set forth below, from amounts
remaining on deposit in the Distribution Account after making
distributions pursuant to clause (i) above, an amount equal to the
Principal Distribution Amount in the following order of priority:
(1) to the Class A Certificates, allocated as described in
Section 4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero; and
(2) sequentially to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class
B-3 Certificates, in that order, until the respective Class
Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not in effect, to the holders
of the related Class or Classes of LIBOR Certificates then entitled to
distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02(c),
until the respective Class Certificate Balances thereof are
reduced to zero;
(2) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and (y) the Class M-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(3) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and to the Class M-1 Certificates in clause
(ii)(B)(b) above and (y) the Class M-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(4) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above and to the Class M-2 Certificates in clause
(ii)(B)(c) above and (y) the Class M-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(5) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above and to the Class M-3 Certificates in clause
(ii)(B)(d) above and (y) the Class M-4 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(6) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above and to the Class M-4 Certificates in clause
(ii)(B)(e) above and (y) the Class M-5 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(7) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above and to the Class M-5 Certificates in clause
(ii)(B)(f) above and (y) the Class M-6 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(8) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above and to the Class M-6 Certificates in clause
(ii)(B)(g) above and (y) the Class B-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(9) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above, to the Class M-6 Certificates in clause
(ii)(B)(g) above and to the Class B-1 Certificates in clause
(ii)(B)(h) above and (y) the Class B-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero; and
(10) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in clause
(ii)(B)(f) above, to the Class M-6 Certificates in clause
(ii)(B)(g) above, to the Class B-1 Certificates in clause
(ii)(B)(h) above and to the Class B-2 Certificates in clause
(ii)(B)(i) above and (y) the Class B-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) to the Class M-1 Certificates, any Unpaid Interest Amount
for such Class;
(B) to the Class M-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(C) to the Class M-2 Certificates, any Unpaid Interest Amount
for such Class;
(D) to the Class M-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(E) to the Class M-3 Certificates, any Unpaid Interest Amount
for such Class;
(F) to the Class M-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(G) to the Class M-4 Certificates, any Unpaid Interest Amount
for such Class;
(H) to the Class M-4 Certificates, any Unpaid Realized Loss
Amount for such Class;
(I) to the Class M-5 Certificates, any Unpaid Interest Amount
for such Class;
(J) to the Class M-5 Certificates, any Unpaid Realized Loss
Amount for such Class;
(K) to the Class M-6 Certificates, any Unpaid Interest Amount
for such Class;
(L) to the Class M-6 Certificates, any Unpaid Realized Loss
Amount for such Class;
(M) to the Class B-1 Certificates, any Unpaid Interest Amount
for such Class;
(N) to the Class B-1 Certificates, any Unpaid Realized Loss
Amount for such Class;
(O) to the Class B-2 Certificates, any Unpaid Interest Amount
for such Class;
(P) to the Class B-2 Certificates, any Unpaid Realized Loss
Amount for such Class;
(Q) to the Class B-3 Certificates, any Unpaid Interest Amount
for such Class;
(R) to the Class B-3 Certificates, any Unpaid Realized Loss
Amount for such Class;
(S) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment (without regard to Net Swap Receipts) for such
Distribution Date;
(T) from funds on deposit in the Excess Reserve Fund Account
with respect to such Distribution Date, an amount equal to any
remaining Basis Risk CarryForward Amount with respect to the
LIBOR Certificates for such Distribution Date, allocated to the
LIBOR Certificates in the same order and priority in which the
Accrued Certificate Interest Distribution Amount is allocated
among such Classes of Certificates, with the allocation to the
Class A Certificates being (a) first, among the Class A
Certificates, pro rata, based on their respective Class
Certificate Balances and (b) second, any remaining amounts to the
Class A Certificates, pro rata, based on any Basis Risk
CarryForward Amounts remaining unpaid, in order to reimburse such
unpaid amounts;
(U) to the Swap Account, the amount of any Defaulted Swap
Termination Payment owed to the Swap Provider;
(V) to the Class X Certificates, the remainder of the Class X
Distributable Amount not distributed pursuant to Sections
4.02(a)(iii)(A)-(U); and
(W) to the Class R Certificates, any remaining amount in the
Trust REMICs;
(iv) Solely for purposes of interest allocation calculations,
the Interest Remittance Amount attributable to Group I Mortgage Loans
will be allocated:
(1) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates; and
(2) second, concurrently, to the Class A-2a, Class A-2b and
Class A-2c Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(A) to such
Classes of Certificates), the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amount for the Class
A-2a, Class A-2b and Class A-2c Certificates, respectively, to
the extent not otherwise previously paid from the Interest
Remittance Amount attributable to Group II Mortgage Loans.
(v) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group II Mortgage Loans will
be allocated:
(1) first, concurrently, to the Class A-2a, Class A-2b and
Class A-2c Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(A) to such
Classes of Certificates), the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amount for the Class
A-2a, Class A-2b and Class A-2c Certificates, respectively; and
(2) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1 Certificates, to the extent not
otherwise previously paid from the Interest Remittance Amount
attributable to Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing
allocation rules, any Class of Class A Certificates does not receive in full the
related Accrued Certificate Interest Distribution Amount or the related Unpaid
Interest Amount, if any, then such shortfall will be allocated to the Holders of
such Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the holders of the Class P Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Class A Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, on a pro rata basis, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for such Distribution Date;
provided, however, that if the Class Certificate Balances of the Class A
Certificates in either Class A Certificate Group are reduced to zero, then the
remaining amount of principal distributions distributable to the Class A
Certificates on such Distribution Date, and the amount of such principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining Outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their
respective Class Certificate Balances have been reduced to zero. Any
distributions of principal to the Group I Class A Certificates shall be made
first from Available Funds relating to the Group I Mortgage Loans, and any
distributions of principal to the Group II Class A Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
Any principal distributions allocated to the Group II Class A
Certificates shall be allocated first to the Class A-2a Certificates, until
their Class Certificate Balance has been reduced to zero, then to the Class A-2b
Certificates, until their Class Certificate Balance has been reduced to zero,
and then to the Class A-2c Certificates, until their Class Certificate Balance
has been reduced to zero. Notwithstanding the foregoing, on and after the
Distribution Date on which the aggregate Class Certificate Balances of the
Subordinated Certificates and the principal balance of the Class X Certificates
have been reduced to zero, any principal distributions allocated to the Group II
Class A Certificates shall be allocated pro rata among the Classes of Group II
Class A Certificates, based on their respective Class Certificate Balances,
until their respective Class Certificate Balances have been reduced to zero.
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Trustee as a reduction in the following order:
(1) First, to the amount of interest payable to the Class X
Certificates; and
(2) Second, pro rata, as a reduction of the Accrued
Certificate Interest Distribution Amount for the Class A,
Class M and Class B Certificates, based on the amount of
interest to which such Classes would otherwise be
entitled.
Section 4.03 Monthly Statements to Certificateholders. (a) Not
later than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicers, the Depositor and each Rating Agency a
statement (with respect to information in such statement relating to the
Mortgage Loans, based solely on information derived from or contained in the
Servicer Remittance Reports and monthly information reports provided by the
Servicer pursuant to Section 4.03(d) below) setting forth with respect to the
related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid
Interest Amounts included in such distribution and any remaining Unpaid
Interest Amounts after giving effect to such distribution, any Basis
Risk CarryForward Amount for such Distribution Date and the amount of
all Basis Risk CarryForward Amount covered by withdrawals from the
Excess Reserve Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest, including any Basis Risk CarryForward Amount not covered
by amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such
Distribution Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the amount of Expense Fees paid to or retained by the
Servicers or the Trustee (stated separately and in the aggregate) with
respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(viii) the amount of P&I Advances included in the distribution on
such Distribution Date and the aggregate amount of P&I Advances reported
by the Servicers as outstanding as of the close of business on such
Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan as of the close of business on
the Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xi) the total number and aggregate principal balance of any REO
Properties (and market value, if available) as of the close of business
on the Determination Date preceding such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation thereof and the aggregate outstanding balance
of all 60+ Day Delinquent Mortgage Loans);
(xiii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xiv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xv) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Unpaid Interest
Amounts;
(xvi) the amount of any Net Swap Payments, Net Swap Receipts,
Swap Termination Payments or Defaulted Swap Termination Payments;
(xvii) the calculations of LIBOR and Swap LIBOR;
(xviii) the Subordinated Amount and Specified Subordinated
Amount;
(xix) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicers;
(xx) the Cumulative Loss Percentage; and
(xxi) other reasonably requested information.
(b) The Trustee's responsibility for providing the above
statement to the Certificateholders, each Rating Agency, each Servicer and the
Depositor is limited to the availability, timeliness and accuracy of the
information derived from the applicable Servicer. The Trustee will provide the
above statement via the Trustee's internet website. The Trustee's website will
initially be located at xxxxx://xxx.xxx.xx.xxx/xxxx and assistance in using the
website can be obtained by calling the Trustee's investor relations desk at
0-000-000-0000. A paper copy of the statement will also be made available upon
request.
The Trustee will also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement to Certificateholders
and may affix thereto any disclaimer it deems appropriate in its reasonable
discretion (without suggesting liability on the part of any other party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i) and (a)(ii) of this Section 4.03
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Not later than the Determination Date for each Distribution Date, each
Servicer shall furnish to the Trustee and the Depositor, a monthly remittance
advice statement (in a format mutually agreed upon by such Servicer and the
Trustee) containing such information as shall be reasonably requested by the
Trustee to enable the Trustee to provide the reports required by Section 4.03(a)
as to the accompanying remittance and the period ending on the close of business
on the last day of the related Prepayment Period (the "Servicer Remittance
Report").
Each Servicer shall furnish to the Trustee monthly information
reports, as of the related Determination Date, to document Mortgage Loan payment
activity on an individual Mortgage Loan basis. With respect to each month, the
corresponding monthly information reports (in electronic format) shall be
received by the Trustee no later than the related Determination Date, which
reports shall contain the following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, received during the related Prepayment Period along
with a detailed report of interest on principal prepayment amounts
remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by such
Servicer during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate expenses reimbursed to such Servicer during the
prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days, (3)
91 days or more; (b) as to which foreclosure or bankruptcy proceedings
of the related mortgagor have commenced; and (c) as to which REO
Property has been acquired.
Section 4.04 Certain Matters Relating to the Determination of
LIBOR. LIBOR shall be calculated by the Trustee in accordance with the
definition of LIBOR. Until all of the LIBOR Certificates are paid in full, the
Trustee shall at all times retain at least four Reference Banks for the purpose
of determining LIBOR with respect to each LIBOR Determination Date. The Trustee
initially shall designate the Reference Banks (after consultation with the
Depositor). Each "Reference Bank" shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market,
shall not control, be controlled by, or be under common control with, the
Trustee and shall have an established place of business in London. If any such
Reference Bank should be unwilling or unable to act as such or if the Trustee
should terminate its appointment as Reference Bank, the Trustee shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Trustee shall have no liability or responsibility to any
Person for (i) the selection of any Reference Bank for purposes of determining
LIBOR or (ii) any inability to retain at least four Reference Banks which is
caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are Outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Trustee to the most
junior Class of Subordinated Certificates then outstanding in reduction of the
Class Certificate Balance thereof.
Section 4.06 Swap Account. On the Closing Date, the Trustee shall
establish and maintain in its name, a separate non-interest bearing trust
account for the benefit of the holders of the Certificates (the "Swap Account")
as a part of the Trust Fund. The Swap Account shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trustee held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments, Net Swap
Payments owed to the Swap Provider and Net Swap Receipts for that Distribution
Date will be deposited into the Swap Account. Funds in the Swap Account will be
distributed in the following order of priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to
the Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, other
than a Defaulted Swap Termination Payment, if any, owed to the Swap
Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid Interest
Amounts as described in Section 4.02(a)(i), to the extent unpaid from
Available Funds;
(iv) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay Accrued Certificate Interest
Distribution Amounts and, if applicable, any Unpaid Interest Amounts as
described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent
unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described
and, in the same manner and order of priority as set forth, in Section
4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the
extent necessary to maintain the Subordinated Amount at the Specified
Subordinated Amount, after giving effect to payments and distributions
from Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward
Amounts, pro rata, based on their Class Certificate Balances for such
Distribution Date, up to the Swap Payment Allocation for each Class of
Class A Certificates and to the extent unpaid from Available Funds
(including Basis Risk Payments on deposit in the Excess Reserve Fund
Account);
(vii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay Basis Risk CarryForward Amounts, up to the Swap
Payment Allocation for each Class of Class M and Class B Certificates
and to the extent unpaid from Available Funds (including Basis Risk
Payments on deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis
Risk CarryForward Amount, pro rata, based on their respective remaining
unpaid Basis Risk CarryForward Amount after the allocation of payments
as set forth in clauses (vi) and (vii) above;
(ix) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay any Unpaid Realized Loss Amount, to the extent
unpaid from Available Funds;
(x) to the Swap Provider, any Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining
amounts.
Upon termination of the Trust, any amounts remaining in the Swap
Account shall be distributed pursuant to the priorities set forth in this
Section 4.06.
The Trustee shall account for the Swap Account as an asset of a
grantor trust under subpart E, Part I of subchapter J of the Code and not as an
asset of any Trust REMIC created pursuant to this Agreement. The beneficial
owners of the Swap Account are the Class X Certificateholders. For federal
income tax purposes, Net Swap Payments and Swap Termination Payments payable to
the Swap Provider shall be deemed to be paid to the Swap Account from the
Upper-Tier REMIC, first, by the Holder of the Class X Certificates (in respect
of the Class IO Interest and, if applicable, the Class X Interest) and second,
other than any Defaulted Swap Termination Payment, from the Upper-Tier REMIC by
the Holders of the applicable Class or Classes of Offered Certificates (in
respect of Class IO Shortfalls) as and to the extent provided in Section 8.13.
Any Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier CarryForward Amounts distributed by the Trustee to the Offered
Certificateholders shall be accounted for by the Trustee, for federal income tax
purposes, as amounts paid first to the Holders of the Class X Certificates in
respect of the Class X Interest and (to the extent remaining after payments to
the Swap Provider) the Class IO Interest, and then to the respective Class or
Classes of Offered Certificates. In addition, the Trustee shall account for the
rights of Holders of each Class of Offered Certificates to receive payments of
Upper-Tier CarryForward Amounts (including, but without duplication Basis Risk
CarryForward Amounts) from the Swap Account (along with Basis Risk CarryForward
Amounts payable from the Excess Reserve Fund Account) as rights in a separate
limited recourse interest rate cap contract written by the Class X
Certificateholders in favor of Holders of each such Class.
The Swap Account shall be an "outside reserve fund" for federal
income tax purposes and not an asset of any Trust REMIC. Furthermore, the
Holders of the Class X Certificates shall be the beneficial owners of the Swap
Account for all federal income tax purposes, and shall be taxable on all income
earned thereon.
With respect to the failure of the Swap Provider to perform any
of its obligations under the Interest Rate Swap Agreement, the breach by the
Swap Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Interest Rate Swap
Agreement, the Trustee shall send any notices and make any demands, on behalf of
the Trust as are required under the Interest Rate Swap Agreement. To the extent
that the Swap Provider fails to make any payment required under terms of the
Interest Rate Swap Agreement, the Trustee shall immediately demand that Xxxxxx
Xxxxxxx, the guarantor of the Swap Provider's obligations under the guarantee of
Xxxxxx Xxxxxxx relating to the Interest Rate Swap Agreement, make any and all
payments then required to be made by Xxxxxx Xxxxxxx pursuant to such guarantee.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be substantially in the
forms attached hereto as exhibits. The Certificates shall be issuable in
registered form, in the minimum denominations, integral multiples in excess
thereof (except that one Certificate in each Class may be issued in a different
amount) and aggregate denominations per Class set forth in the Preliminary
Statement.
The Depositor hereby directs the Trustee to register the Class X
and Class P Certificates in the name of the Depositor or its designee. On a date
as to which the Depositor notifies the Trustee, the Trustee shall transfer the
Class X and Class P Certificates in the name of the NIM Trustee, or such other
name or names as the Depositor shall request, and to deliver the Class X and
Class P Certificates to the NIM Trustee or to such other Person or Persons as
the Depositor shall request.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such Holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless authenticated by the Trustee by manual signature, and
such authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the direction of the Depositor or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates. (a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of transfer of
any Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless
such transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Trustee shall be entitled to rely solely upon a
written notice to such effect from the Depositor. Except with respect to (i) the
transfer of the Class X, Class P or Class R Certificates to the Depositor or an
Affiliate of the Depositor, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates from the NIM Issuer or the NIM Trustee to the
Depositor or an Affiliate of the Depositor, in the event that a transfer of a
Private Certificate which is a Physical Certificate is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such transfer shall certify to the Trustee in writing the facts
surrounding the transfer in substantially the form set forth in Exhibit H (the
"Transferor Certificate") and either (i) there shall be delivered to the Trustee
a letter in substantially the form of Exhibit I (the "Rule 144A Letter") or (ii)
there shall be delivered to the Trustee at the expense of the transferor an
Opinion of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is a
Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicers shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor
and each Servicer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of the Class R, Class X
or Class P Certificates to the Depositor or an Affiliate of the Depositor, (ii)
the transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, no
transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
shall have received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee
(in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
Person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer, or (ii) in the case of an
ERISA-Restricted Certificate other than a Residual Certificate or a Class P
Certificate that has been the subject of an ERISA-Qualifying Underwriting, and
the purchaser is an insurance company, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) in the case of any such ERISA-Restricted Certificate
other than a Residual Certificate or Class P Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a plan subject to Similar Law, or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee, which Opinion of Counsel shall not be an
expense of the Servicers, the Depositor, the Trustee or the Trust Fund,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not constitute or result in a non-exempt
prohibited transaction within the meaning of ERISA, Section 4975 of the Code or
any Similar Law and will not subject the Depositor, the Trustee or the Servicers
to any obligation in addition to those expressly undertaken in this Agreement or
to any liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate or a Residual
Certificate, in the event the representation letter referred to in the preceding
sentence is not furnished, such representation shall be deemed to have been made
to the Trustee by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. Notwithstanding anything else to the
contrary herein, (a) any purported transfer of an ERISA-Restricted Certificate,
other than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Class P Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate other than an ERISA-Restricted Certificate, or
any interest therein, shall be deemed to have represented that either (i) it is
not a Plan or (ii) the acquisition and holding of the Certificate are eligible
for the exemptive relief available under at least one of the Investor-Based
Exemptions.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
G;
(iii) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Residual Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Residual
Certificate and (C) not to Transfer its Ownership Interest in a Residual
Certificate or to cause the Transfer of an Ownership Interest in a
Residual Certificate to any other Person if it has actual knowledge that
such Person is a Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest no
rights in the purported Transferee. If any purported transferee shall
become a Holder of a Residual Certificate in violation of the provisions
of this Section 5.02(c), then the last preceding Permitted Transferee
shall be restored to all rights as Holder thereof retroactive to the
date of registration of Transfer of such Residual Certificate. The
Trustee shall not have any liability to any Person for any registration
of Transfer of a Residual Certificate that is in fact not permitted by
Section 5.02(b) and this Section 5.02(c) or for making any payments due
on such Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this Agreement so
long as the Transfer was registered after receipt of the related
Transfer Affidavit, Transferor Certificate and the Rule 144A Letter. The
Trustee shall be entitled but not obligated to recover from any Holder
of a Residual Certificate that was in fact a Non-Permitted Transferee at
the time it became a Holder or, at such subsequent time as it became a
Non-Permitted Transferee, all payments made on such Residual Certificate
at and after either such time. Any such payments so recovered by the
Trustee shall be paid and delivered by the Trustee to the last preceding
Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code
as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth
in this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund or the Trustee, to the
effect that the elimination of such restrictions will not cause any Trust REMIC
hereunder to fail to qualify as a REMIC at any time that the Certificates are
Outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Residual Certificate hereby consents to any amendment of
this Agreement which, based on an Opinion of Counsel furnished to the Trustee,
is reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is a Non-Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by a
Person that is a Non-Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall
at all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor notifies the
Depository (and the Trustee consents) of its intent to terminate the book-entry
system through the Depository, and, upon receipt of notice of such intent from
the Depository, the Depository Participants holding beneficial interests in the
Book-Entry Certificates agree to initiate such termination, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. None of the Servicers, the
Depositor or the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Trustee with an adequate
inventory of Certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee, duly
executed by the Certificateholder or his attorney duly authorized in writing.
Each Certificate presented or surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Trustee in
accordance with its customary practice. No service charge shall be made for any
registration of transfer or exchange of Private Certificates, but the Trustee
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Private
Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicers and the
Trustee such security or indemnity as may be required by them to hold each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicers, the Trustee,
the Depositor, and any agent of a Servicer, the Depositor, or the Trustee may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and none of the Servicers, the
Trustee, the Depositor, or any agent of a Servicer, the Depositor, or the
Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or a Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, such Servicer or the Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies in the United States where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates the
offices of its agent for such purposes located at DB Services Tennessee, 000
Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Transfer Unit.
The Trustee shall give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers. The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or a
Servicer. The Depositor and each of the Servicers will each keep in full effect
its existence, rights and franchises as a corporation or federally chartered
savings bank, as the case may be, under the laws of the United States or under
the laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be merged
or consolidated, or any Person resulting from any merger or consolidation to
which the Depositor or a Servicer shall be a party, or any person succeeding to
the business of the Depositor or a Servicer, shall be the successor of the
Depositor or such Servicer, as the case may be, 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 to such Servicer shall be qualified to service
mortgage loans on behalf of, Xxxxxx Xxx or Xxxxxxx Mac.
Section 6.03 Limitation on Liability of the Depositor, the
Servicers and Others. Neither the Depositor, the Servicers nor any of their
directors, officers, employees or agents of the Depositor shall be under any
liability to the Certificateholders 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
Depositor, the Servicers or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Servicers or any such Person from any liability which would otherwise be imposed
by reasons of willful misfeasance, bad faith or negligence (or gross negligence
in the case of the Depositor) in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Depositor, each
Servicer and any director, officer, employee or agent of the Depositor and each
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 Depositor and its Affiliates, the Purchaser, each Servicer and any director,
officer, employee or agent of the Depositor, the Purchaser or each Servicer
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence (or gross negligence in
the case of the Depositor) in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. Neither the Depositor
nor any Servicer shall be under any obligation to appear in, prosecute or defend
any legal action that is not incidental to its respective duties hereunder and
which in its opinion may involve it in any expense or liability; provided,
however, that each of the Depositor and each Servicer may in its discretion
undertake any such action (or direct the Trustee to undertake such actions
pursuant to Section 2.03 for the benefit of the Certificateholders) that it may
deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor and the applicable Servicer
shall be entitled to be reimbursed therefor out of the applicable Collection
Account.
Section 6.04 Limitation on Resignation of a Servicer. Subject to
Sections 7.01 and 10.07, no Servicer shall assign this Agreement or resign from
the obligations and duties hereby imposed on it except by mutual consent of the
Servicers, the Depositor and the Trustee or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by a Servicer. Any such determination permitting the
resignation of a Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Depositor and the Trustee which Opinion of Counsel shall
be in form and substance acceptable to the Depositor and the Trustee. No such
resignation shall become effective until a successor shall have assumed such
Servicer's responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that a Servicer determines that it will no longer engage
in the business of servicing mortgage loans, such Servicer may assign its rights
under this Agreement, provided that, (i) the Depositor in its discretion has
consented, which consent shall not be unreasonably withheld, (ii) the Rating
Agencies' ratings of the Certificates in effect immediately prior to such action
will not be qualified, reduced or withdrawn as a result thereof (as evidenced by
a letter to such effect from the Rating Agencies) and (iii) such Servicer shall
be liable for all costs and expenses associated with the transfer of servicing,
provided further, that such Servicer shall indemnify and hold each of the Trust
Fund, the Trustee, the Custodian, the Depositor, the other Servicers hereunder,
any sub-servicer, the successor Servicer and each Certificateholder harmless
against any and all claims, losses, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments, and any other costs, fees and expenses
that such party may sustain in any way related to such assignment except with
respect to a successor Servicer's failure to comply with the terms of this
Agreement. No assignment by such Servicer shall become effective until a
successor Servicer acceptable to the Depositor and the Trustee shall have
assumed in writing such Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement. Any such assignment shall not relieve a
Servicer of responsibility for any of the obligations specified herein except to
the extent that such responsibilities have been expressly assumed by the
successor Servicer.
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims. Each Servicer, severally and not jointly, shall indemnify the
Depositor, the Purchaser and the Trustee and any director, officer, employee or
agent of the Depositor, the Purchaser or the Trustee and hold them harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain in any way related to any
breach by such Servicer, of (i) any of its representations and warranties
referred to in Section 2.03(a), (ii) any error in any tax or information return
prepared by such Servicer or (iii) the failure of such Servicer to perform its
duties and service the Mortgage Loans in compliance with the terms of this
Agreement. The applicable Servicer immediately shall notify the Depositor and
the Trustee if such claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Depositor and the Trustee) the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Depositor, the Responsible Party or the Trustee in respect of such claim.
This indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of each Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means, with respect to each Servicer individually, any one of the
following events:
(a) any failure by a Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to such
Servicer by the Depositor or by the Trustee, or to such Servicer, the Depositor
and the Trustee by Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates; or
(b) any failure on the part of a Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of such Servicer set forth in this Agreement which continues unremedied for
a period of sixty (60) days (except that (x) such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement and (y) such number of days shall
be ten in the case of a failure to observe or perform any of the obligations set
forth in Sections 3.22, 3.23 or 8.12) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to such Servicer by the Depositor or by the Trustee, or to such
Servicer, the Depositor and the Trustee by Certificateholders entitled to at
least 25% of the Voting Rights in the Certificates and (ii) actual knowledge of
such failure by a Servicing Officer of such Servicer; or
(c) 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, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against a Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) a Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to a
Servicer or of or relating to all or substantially all of its property; or
(e) a 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 or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of a Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to such Servicer by the Trustee or by Depositor, or to such Servicer, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(g) either (i) with respect to JPMorgan, any withdrawal or
downgrade of two or more levels (i.e., from "Above Average" to "Below Average"
or the equivalent) of the servicer rating, as of the Closing Date, of such
Servicer by any Rating Agency which results in a downgrade, qualification or
withdrawal of the rating assigned to any Class of Certificates by any Rating
Agency or (ii) with respect to HomEq, Fitch reduces its servicer rating of HomEq
to "RPS2-" or lower, Xxxxx'x reduces its servicer rating of HomEq to "SQ3" or
lower, or S&P reduces its servicer rating of HomEq to "Average" or lower.
If an Event of Default described in clauses (a) through (g) of
this Section 7.01 shall occur, then, and in each and every such case, so long as
such Event of Default shall not have been remedied, the Trustee may, and at the
direction of a majority of the Voting Rights, the Trustee shall, by notice in
writing to the applicable Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the Mortgage Loans serviced by such Servicer and the
proceeds thereof, other than its rights as a Certificateholder hereunder;
provided, however, that the Trustee shall not be required to give written notice
to such Servicer of the occurrence of an Event of Default described in clauses
(b) through (g) of this Section 7.01 unless and until a Responsible Officer of
the Trustee has actual knowledge of the occurrence of such an event. In the
event that a Responsible Officer of the Trustee has actual knowledge of the
occurrence of an event of default described in clause (a) of this Section 7.01,
the Trustee shall give written notice to the applicable Servicer of the
occurrence of such an event within one Business Day of the first day on which
such Responsible Officer obtains actual knowledge of such occurrence; provided,
that if such failure is the failure to make a P&I Advance, the Trustee shall
send such notice prior to 12:00 noon New York time on the Distribution Date and,
if the Event of Default of such Servicer was the failure to make a P&I Advance,
the Trustee, as successor Servicer, shall make such P&I Advance on the
Distribution Date that such notice was delivered. On and after the receipt by
such Servicer of such written notice, all authority and power of such Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. Subject to Section 7.02, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of such Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of such Servicer to pay amounts owed pursuant to
Article VIII. Such Servicer agrees to cooperate with the Trustee in effecting
the termination of such Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee of all cash amounts
which shall at the time be credited to the Collection Account of such
predecessor Servicer, or thereafter be received with respect to the Mortgage
Loans.
Notwithstanding any termination of the activities of a Servicer
hereunder, such Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Trustee to Act; Appointment of Successor. On and
after the time a Servicer receives a notice of termination pursuant to Section
3.24 or Section 7.01, the Trustee shall, subject to and to the extent provided
in Section 3.05, be the successor to such Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on such Servicer by the terms and provisions hereof and
applicable law including the obligation to make P&I Advances or Servicing
Advances pursuant to Section 3.24 or Section 7.01. As compensation therefor, the
Trustee shall be entitled to all funds relating to the Mortgage Loans that such
Servicer would have been entitled to charge to its Collection Account if such
Servicer had continued to act hereunder including, if such Servicer was
receiving the Servicing Fee, the Servicing Fee and the income on investments or
gain related to its Collection Account and the Distribution Account which such
Servicer would be entitled to receive (in addition to income on investments or
gain related to the Distribution Account for the benefit of the Trustee during
the Trustee Float Period). Notwithstanding the foregoing, if the Trustee has
become the successor to such Servicer in accordance with Section 7.01, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making P&I Advances and Servicing Advances pursuant to
Section 4.01, if it is otherwise unable to so act or at the written request of
Certificateholders entitled to at least a majority of the Voting Rights,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to such Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of such Servicer
hereunder. Any successor to such Servicer shall be an institution which is a
Xxxxxx Xxx and Xxxxxxx Mac approved servicer in good standing, which has a net
worth of at least $30,000,000, which is willing to service the Mortgage Loans
and which executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, containing an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of such terminated Servicer (other than liabilities of such
terminated Servicer under Section 6.03 incurred prior to termination of such
Servicer under Section 7.01), with like effect as if originally named as a party
to this Agreement; provided, that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced, as a result of such assignment and
delegation. Pending appointment of a successor to a Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.05, act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Servicing Fee Rate and amounts paid to the predecessor
Servicer from investments. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor Servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the predecessor Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
In the event that a Servicer is terminated pursuant to Section
7.01, such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the related Servicing Files to a successor Servicer
(excluding set-up costs and other administrative expenses of the successor
Servicer), and in all other cases the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Trustee is the predecessor Servicer (except in the case where
the Trustee in its role as successor Servicer is being terminated pursuant to
Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor Servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
Any successor to a Servicer as servicer shall give notice to the
related Mortgagors of such change of servicer and shall, during the term of its
service as servicer, maintain in force the policy or policies that each Servicer
is required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders and to each Rating
Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Trustee shall transmit by mail to all Certificateholders and each Rating
Agency notice of each such Event of Default hereunder known to the Trustee,
unless such event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case of an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and
is continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming on their face to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodian. Except as otherwise provided in Section 8.01: (a) the Trustee and the
Custodian may request and rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties and neither the Trustee nor the Custodian shall have
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(b) the Trustee and the Custodian may consult with counsel,
financial advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c) neither the Trustee nor the Custodian shall be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder, provided further, the Trustee shall not
be responsible for any act or omission of the Custodian;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer of the
investment security and with respect to the investment of funds in the
Distribution Account during the Trustee Float Period);
(h) except as otherwise provided in Section 7.01, the Trustee
shall not be deemed to have knowledge of an Event of Default, until a
Responsible Officer of the Trustee shall have received written notice thereof;
and
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement, the Interest Rate Swap Agreement or of the
Certificates or of any Mortgage Loan or related document. The Trustee shall not
be accountable for the use or application by the Depositor or a Servicer of any
funds paid to the Depositor or a Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from any Collection Account or the Distribution
Account by the Depositor or a Servicer.
The Trustee shall have no responsibility for filing or recording
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Interest Rate Swap Agreement and the
Certificates not in its individual capacity but solely as Trustee of the Trust
Fund created by this Agreement, in the exercise of the powers and authority
conferred and vested in it by this Agreement. Each of the undertakings and
agreements made on the part of the Trustee on behalf of the Trust Fund in the
Interest Rate Swap Agreement and the Certificates is made and intended not as a
personal undertaking or agreement by the Trustee but is made and intended for
the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and
any interest or investment income earned on funds deposited in the Distribution
Account during the Trustee Float Period. The Trustee and any director, officer,
employee, or agent of the Trustee shall be indemnified by the Trust Fund against
any loss, liability, or expense (including reasonable attorney's fees) resulting
from any error in any tax or information return prepared by any Servicer or
incurred in connection with any claim or legal action relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement or the Interest Rate Swap Agreement, other than any loss, liability,
or expense (i) resulting from any breach of any Servicer's obligations in
connection with this Agreement for which the related Servicer has performed its
obligation to indemnify the Trustee pursuant to Section 6.05, (ii) resulting
from any breach of the Responsible Party's obligations in connection with this
Agreement for which the Responsible Party has performed its obligations to
indemnify the Trustee pursuant to Section 2.03(o) or (iii) incurred because of
willful misconduct, bad faith, or negligence in the performance of any of the
Trustee's duties under this Agreement. This indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee under
this Agreement. Without limiting the foregoing, except as otherwise agreed upon
in writing by the Depositor and the Trustee, and except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misconduct, the Trust Fund shall pay or reimburse the Trustee, for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates, and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must
engage them to perform services under this Agreement.
Except as otherwise provided in this Agreement or a separate
letter agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other expenses incurred by the
Trustee; provided, however, no expense shall be reimbursed hereunder if it would
not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The
Trustee hereunder shall at all times be a corporation or association organized
and doing business under the laws of a state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority and with a credit rating which would
not cause any of the Rating Agencies to reduce their respective then current
ratings of the Certificates (or having provided such security from time to time
as is sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its Affiliates or the Servicers and their Affiliates;
provided, however, that such entity cannot be an Affiliate of the Depositor or a
Servicer other than the Trustee in its role as successor to a Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice of resignation to the Depositor, the Servicers and each
Rating Agency not less than 60 days before the date specified in such notice,
when, subject to Section 8.08, such resignation is to take effect, and
acceptance by a successor trustee in accordance with Section 8.08 meeting the
qualifications set forth in Section 8.06. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment within
30 days after the giving of such notice or resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, or a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to each Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least a majority of
the Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
shall be delivered by the successor Trustee to each Servicer, one complete set
to the Trustee so removed and one complete set to the successor so appointed.
The successor trustee shall notify each Rating Agency of any removal of the
Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed
as provided in Section 8.07 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee and the Servicers an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The Depositor, the
Servicers and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the applicable Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
applicable Servicer and the Trustee may consider appropriate. If any Servicer
shall not have joined in such appointment within 15 days after the receipt by
such Servicer of a request to do so or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of a Servicer, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to a
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument appointing
any separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article VIII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the each Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each Trust REMIC and that in such
capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
Trust REMIC containing such information and at the times and in the manner as
may be required by the Code or state or local tax laws, regulations, or rules,
and furnish to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby;
(b) within thirty days of the Closing Date, apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for all tax entities and shall also furnish to the
Internal Revenue Service, on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
Holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC be treated
as a REMIC on the federal tax return for its first taxable year (and, if
necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax
imposed on the Transfer of a Residual Certificate to a Person that is a
Non-Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax);
(f) to the extent that they are under its control, conduct
matters relating to such assets at all times that any Certificates are
Outstanding so as to maintain the status of each Trust REMIC as a REMIC under
the REMIC Provisions;
(g) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status of any
Trust REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC created
hereunder before its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information
returns to be signed by the Trustee or such other Person as may be required to
sign such returns by the Code or state or local laws, regulations or rules; and
(j) maintain records relating to each Trust REMIC created
hereunder, including the income, expenses, assets, and liabilities thereof on a
calendar year basis and on the accrual method of accounting and the fair market
value and adjusted basis of the assets determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information.
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for each Trust REMIC, within the
meaning of Treasury Regulations Section 1.860F-4(d), and the Trustee is hereby
designated as agent of such Certificateholder for such purpose (or if the
Trustee is not so permitted, such Holder shall be the Tax Matters Person in
accordance with the REMIC Provisions). In such capacity, the Trustee shall, as
and when necessary and appropriate, represent each Trust REMIC created hereunder
in any administrative or judicial proceedings relating to an examination or
audit by any governmental taxing authority, request an administrative adjustment
as to any taxable year of each Trust REMIC created hereunder, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of each Trust REMIC created hereunder, and
otherwise act on behalf of each Trust REMIC in relation to any tax matter or
controversy involving it.
The Trustee shall treat the rights of the Class P
Certificateholders to Prepayment Charges, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and the
Swap Account (subject to the obligation to pay Basis Risk CarryForward Amounts
and Upper-Tier CarryForward Amounts) and the rights of the Offered
Certificateholders to receive Basis Risk CarryForward Amounts and Upper-Tier
CarryForward Amounts as the beneficial ownership of interests in a grantor
trust, and not as obligations of any Trust REMIC created hereunder, for federal
income tax purposes. The Trustee shall file or cause to be filed with the
Internal Revenue Service Form 1041 or such other form as may be applicable and
shall furnish or cause to be furnished, to the Class P Certificateholders, Class
X Certificateholders and LIBOR Certificateholders, the respective amounts
described above that are received, in the time or times and in the manner
required by the Code.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value, if any, to each
Class of Certificates of the right to receive Basis Risk CarryForward Amounts
from the Excess Reserve Fund Account and Basis Risk CarryForward Amounts and
Upper-Tier CarryForward Amounts from the Swap Account. Thereafter, the Depositor
shall provide to the Trustee promptly upon written request therefor any
additional information or data that the Trustee may, from time to time,
reasonably request to enable the Trustee to perform its duties under this
Agreement; provided, however, that the Depositor shall not be required to
provide any information regarding the Mortgage Loans that the Servicer is
required to provide to the Trustee pursuant to this Agreement. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide pursuant to
this paragraph accurate information or data to the Trustee on a timely basis.
Neither the Servicers nor the Trustee shall (i) permit the
creation of any interests in any Trust REMIC other than the regular and residual
interests set forth in the Preliminary Statement, (ii) receive any amount
representing a fee or other compensation for services (except as otherwise
permitted by this Agreement or the related Mortgage Loan documents) or (iii)
otherwise knowingly or intentionally take any action, cause the Trust Fund to
take any action or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any Trust REMIC as a REMIC or (ii)
result in the imposition of a tax upon any Trust REMIC or the Trust Fund
(including but not limited to the tax on "prohibited transactions" as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code, or the tax on "net income from foreclosure
property") unless the Trustee receives an Opinion of Counsel (at the expense of
the party seeking to take such action or, if such party fails to pay such
expense, at the expense of the Trust Fund, but in no event at the expense of the
Trustee) to the effect that the contemplated action will not, with respect to
the Trust Fund, any Trust REMIC created hereunder, endanger such status or
result in the imposition of such a tax).
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Pooling-Tier REMIC-1 as defined in Section 860G(c)
of the Code, on any contribution to any Trust REMIC after the Start-up Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
if applicable, any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Trustee if such
tax arises out of or results from negligence of the Trustee in the performance
of any of its obligations under this Agreement, (ii) the applicable Servicer and
the Responsible Party, jointly, in the case of any such minimum tax, and the
Servicer if such tax arises out of or results from a breach by such Servicer of
any of its obligations under this Agreement, (iii) the Responsible Party if such
tax arises out of or results from the Responsible Party's obligation to
repurchase a Mortgage Loan pursuant to Section 2.03, or (iv) in all other cases,
or if the Trustee, the applicable Servicer or the Responsible Party fails to
honor its obligations under the preceding clause (i), (ii), or (iii), any such
tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and each Servicer
shall reasonably cooperate with the Depositor in connection with the Trust's
satisfying the reporting requirements under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The Trustee shall prepare on behalf of the
Trust any Forms 8-K and 10-K customary for similar securities as required by the
Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission thereunder, and the Trustee shall sign and file (via the Securities
and Exchange Commission's Electronic Data Gathering and Retrieval System) such
Forms on behalf of the Depositor, if an officer of the Depositor signs the
Certification (as defined below), or otherwise on behalf of the Trust. In the
event the Trustee is signing on behalf of the Depositor pursuant to the
preceding sentence, the Depositor hereby grants to the Trustee a limited power
of attorney to execute and file each such document on behalf of the Depositor.
Such power of attorney shall continue until either the earlier of (i) receipt by
the Trustee from the Depositor of written termination of such power of attorney
and (ii) the termination of the Trust. Notwithstanding the foregoing, the
Trustee shall prepare such Form to be signed by the Depositor and the Depositor
shall sign such Form, unless the Securities and Exchange Commission has
indicated that it will accept a Certification signed by the Depositor where the
related Form 10-K is signed by the Trustee on behalf of the Depositor.
(b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, including a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities and Exchange Commission staff's interpretations. Such
Form 10-K shall include as exhibits each Servicer's annual statement of
compliance described under Section 3.22 and the accountant's report described
under Section 3.23, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence, willful misconduct or bad
faith. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit L, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Securities and Exchange Commission (the
"Certification"), which shall, except as described below, be signed by the
senior officer of the Depositor in charge of securitization.
(c) In the event the Certification is to be signed by an officer
of the Depositor, the Trustee shall sign a certification (in the form attached
hereto as Exhibit M, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Securities and Exchange Commission) for the
benefit of the Depositor and its officers, directors and Affiliates in respect
of items 1 through 3 thereof of the Certification (provided, however, that the
Trustee shall not undertake an analysis of the accountant's report attached as
an exhibit to the Form 10-K), and each Servicer shall sign a certification
solely with respect to such Servicer (in the form attached hereto as Exhibit N,
with such changes as may be necessary or appropriate as a result of changes
promulgated by the Securities and Exchange Commission) for the benefit of the
Depositor, the Trustee and their respective officers, directors and Affiliates
in respect of items 4 and 5 of the Certification. Each such certification shall
be delivered to the Depositor no later than March 15th of each year (or if such
day is not a Business Day, the immediately preceding Business Day) and the
Depositor shall deliver the Certification to be filed to the Trustee no later
than March 20th of each year (or if such day is not a Business Day, the
immediately preceding Business Day). In the event that prior to the filing date
of the Form 10-K in March of each year, the Trustee or any Servicer has actual
knowledge of information material to the Certification, that party shall
promptly notify the Depositor and each of the other parties signing the
certifications. In addition, (i) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors, employees, agents and Affiliates from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (ii) each Servicer, severally and not jointly, shall
indemnify and hold harmless the Depositor, the Trustee and their respective
officers, directors, employees, agents and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon any breach of the applicable Servicer's obligations under this
Section 8.12(c) or any material misstatement or omission, negligence, bad faith
or willful misconduct of such Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless any indemnified party, then (i) the Trustee agrees in connection with a
breach of the Trustee's obligations under this Section 8.12(c) or the Trustee's
negligence, bad faith or willful misconduct in connection therewith that it
shall contribute to the amount paid or payable by the Depositor as a result of
the losses, claims, damages or liabilities of the Depositor in such proportion
as is appropriate to reflect the relative fault of the Depositor on the one hand
and the Trustee on the other and (ii) each Servicer agrees that it shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities of such indemnified party in such
proportion as is appropriate to reflect the relative fault of such indemnified
party, on the one hand, and such Servicer, on the other hand, in connection with
a breach of the Servicers' obligations under this Section 8.12(c) or any
material misstatement or omission, negligence, bad faith or willful misconduct
of such Servicer in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission,
the Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.
(e) Prior to January 30 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts,
Basis Risk CarryForward Amounts and Class IO Shortfalls; Tax Classification of
the Excess Reserve Fund Account, Swap Account and the Interest Rate Swap
Agreement. For federal income tax purposes, the Trustee shall treat the Excess
Reserve Fund Account and the Swap Account as beneficially owned by the holders
of the Class X Certificates and shall treat such portion of the Trust Fund as a
grantor trust, within the meaning of subpart E, Part I of subchapter J of the
Code. The Trustee shall treat the rights that each Class of LIBOR Certificates
has to receive payments of Basis Risk CarryForward Amounts, and to the extent
not paid from the Excess Reserve Fund Account, Basis Risk CarryForward Amounts
from the Swap Account (together with Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account) as rights to receive payments under an interest
rate cap contract written by the Class X Certificateholder in favor of each such
Class and beneficially owned by each such Class through the grantor trust.
Accordingly, each Class of Certificates (excluding the Class X, Class P and
Class R Certificates) will be comprised of two components - an Upper-Tier
Regular Interest and an interest in an interest rate cap contract, and the Class
X Certificates will be comprised of four components - two Upper-Tier Regular
Interests (the Class X Interest and the Class IO Interest), an interest in the
Excess Reserve Fund Account, subject to obligation to pay Basis Risk
CarryForward Amounts, and ownership of the Swap Account and the Interest Rate
Swap Agreement, subject to the obligation to pay Upper-Tier CarryForward Amounts
including, but without duplication, Basis Risk CarryForward Amounts. The Trustee
shall allocate the issue price for a Class of Certificates among the respective
components for purposes of determining the issue price of the Upper-Tier Regular
Interest component based on information received from the Depositor. Unless
otherwise advised by the Depositor in writing, for federal income tax purposes,
the Trustee is hereby directed to assign a value of zero to the right of each
Holder of an Offered Certificate to receive the related Upper-Tier CarryForward
Amount and, without duplication, the related Basis Risk CarryForward Amount for
purposes of allocating the purchase price of a LIBOR Certificate acquired by an
initial Holder thereof between such right and the related Upper-Tier Regular
Interest.
Holders of LIBOR Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other than Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class X Interest available
for such payments and amounts payable on the Class IO Interest (such excess, a
"Class IO Shortfall"), first from interest and then from principal distributable
on the LIBOR Certificates. A Class IO Shortfall payable from interest
collections shall be allocated pro rata among such LIBOR Certificates based on
the amount of interest otherwise payable to such Class of LIBOR Certificates,
and a Class IO Shortfall payable from principal collections shall be allocated
in reverse sequential order beginning with the most subordinate Class of LIBOR
Certificates then outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of LIBOR
Certificates in respect of the corresponding Upper-Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class X Certificates
through the Swap Account. In the event any class of Upper-Tier Regular Interest
corresponding to a class of LIBOR Certificates is subject to the Upper-Tier
REMIC Loan Group I Rate, the Upper-Tier REMIC Loan Group II Rate or the
Upper-Tier REMIC WAC Rate, and such rate exceeds the applicable Pass-Through
Rate of the Corresponding Class of Certificates as a result of a Swap
Termination Payment, such excess shall be deemed first paid to the related
Upper-Tier Regular Interest and then paid to the Class X Certificates in a
manner analogous to Class IO Shortfalls.
Section 8.14 Custodial Responsibilities. (a) The Custodian shall
provide access to the Mortgage Loan Documents in possession of the Custodian
regarding the related Mortgage Loans and REO Property and the servicing thereof
to the Trustee, the Certificateholders, the FDIC, and the supervisory agents and
examiners of the FDIC, such access being afforded only upon two (2) Business
Days' prior written request and during normal business hours at the office of
the Custodian. The Custodian shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at the expense of the person requesting such access.
Upon receipt of a written request made by a Servicer in the form
of the Request for Release, the applicable Custodian shall release within five
Business Days the related Mortgage File in accordance with Section 3.16.
(b) The Custodian and any of its respective directors, officers,
employees or agents shall be indemnified by the Trust Fund and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to this Agreement
or the performance of any of the Custodian's duties under this Agreement other
than any loss, liability, or expense incurred (i) resulting from any breach of
the Servicer's obligations in connection with this Agreement for which the
Servicer has performed its obligations to indemnify the Custodian pursuant to
Section 6.05, (ii) resulting from any breach of the Responsible Party's
obligations in connection with this Agreement for which the Responsible Party
has performed its obligations to indemnify the Custodian pursuant to Section
2.03(k), or (iii) because of willful misfeasance, bad faith, or negligence in
the performance of any of the Custodian's duties under this Agreement. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Custodian. Except as otherwise provided in this
Agreement or a separate letter agreement between the Depositor and the
Custodian, the Custodian shall not be entitled to payment or reimbursement for
any routine ongoing expenses incurred by the Custodian in the ordinary course of
its duties as Custodian under this Agreement or for any other expenses incurred
by the Custodian; provided, however, that no expense shall be reimbursed by the
Trust Fund under this Agreement if it would not constitute an "unanticipated
expense incurred by the REMIC" within the meaning of the REMIC Provisions.
(c) The Custodian may resign from its obligations hereunder upon
60 days' prior written notice to the Trustee, the Depositor and the Servicers.
Such resignation shall take effect upon (i) the appointment of a successor
Custodian reasonably acceptable to the Trustee within such 60 day period; and
(ii) delivery of all Custodial Files to the successor Custodian. The Trustee
shall have the right, but not the obligation, to become the successor Custodian.
If no successor Custodian is appointed within 60 days after written notice of
the Custodian's resignation is received by the Trustee, the Custodian may
petition a court of competent jurisdiction to appoint a successor Custodian.
Upon such resignation and appointment of successor Custodian, the
Custodian shall, at such Custodian's expense (unless for nonpayment, then at the
expense of the Trust), promptly transfer to the successor Custodian, as directed
in writing by the Trustee, all Mortgage Files being administered under this
Agreement.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicers and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase, on or after the
Optional Termination Date, by HomEq of all Mortgage Loans (and REO Properties)
at the price equal to the sum of (i) 100% of the unpaid principal balance of
each Mortgage Loan (other than in respect of REO Property) plus accrued and
unpaid interest thereon at the applicable Mortgage Rate, (ii) the lesser of (x)
the appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by HomEq at the
expense of HomEq, plus accrued and unpaid interest on each Mortgage Loan at the
applicable Mortgage Rate and (y) the unpaid principal balance of each Mortgage
Loan related to any REO Property, in each case plus accrued and unpaid interest
thereon at the applicable Mortgage Rate, and (iii) any Swap Termination Payment,
other than a Defaulted Swap Termination Payment, owed to the Swap Provider
pursuant to the Interest Rate Swap Agreement, and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the
trusts created hereby continue beyond the expiration of 21 years from the death
of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of
the United States to the Court of St. James's, living on the date hereof.
Notwithstanding anything to the contrary contained herein, no
such purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 9.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, HomEq shall have deposited in the related Collection Account
an amount to be remitted to the NIM Trustee that, together with such remaining
proceeds, will be sufficient to pay the outstanding principal amount of and
accrued and unpaid interest on the NIM Securities, to the extent the NIM
Securities are then outstanding.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicers determine that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Accounts, the Servicers shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder and the Swap Provider. If
HomEq elects to terminate the Trust Fund pursuant to clause (a) of Section 9.01,
by the 25th day of the month preceding the month of the final distribution,
HomEq shall notify the Depositor and the Trustee of the date HomEq intends to
terminate the Trust Fund and of the applicable repurchase price of the Mortgage
Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date
on which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not earlier than the 10th day and not later
than the 15th day of the month of such final distribution. Any such Notice of
Final Distribution shall specify (a) the Distribution Date upon which final
distribution on the Certificates will be made upon presentation and surrender of
Certificates at the office therein designated, (b) the amount of such final
distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Servicer or Servicers, as the case may be, will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, each
Servicer shall cause all funds in its Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee or the Custodian, as applicable, of a
Request for Release therefor, the Trustee or the Custodian, as applicable, shall
promptly release to HomEq the Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due to the Servicers, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class X Certificates),
the Certificate Balance thereof plus for each such Class and the Class X
Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event
HomEq exercises its purchase option with respect to the Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of HomEq to the effect that the failure to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on "prohibited transactions" on any Trust REMIC as defined
in Section 860F of the Code, or (ii) cause any Trust REMIC to fail to qualify as
a REMIC at any time that any Certificates are Outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
HomEq and, no later than the next Distribution Date after such sale, shall
distribute to the Certificateholders the proceeds of such sale in complete
liquidation of each Trust REMIC; and
(b) The Trustee shall attach a statement to the final federal
income tax return for each Trust REMIC stating that pursuant to Treasury
Regulations Section 1.860F-1, the first day of the 90-day liquidation period for
each such Trust REMIC was the date on which the Trustee sold the assets of the
Trust Fund to HomEq.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time
to time by the Depositor, the Servicers, the Responsible Party, the Custodian
and the Trustee without the consent of any of the Certificateholders (i) to cure
any ambiguity or mistake, (ii) to correct any defective provision herein or to
supplement any provision herein which may be inconsistent with any other
provision herein, (iii) to add to the duties of the Depositor, the Custodian, or
the Servicers, (iv) to add any other provisions with respect to matters or
questions arising hereunder or (v) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement; provided that any
amendment pursuant to clauses (iv) or (v) above shall not, as evidenced by an
Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; and provided, further, that any such
amendment pursuant to clause (iv) or (v) above shall not be deemed to adversely
affect in any material respect the interests of the Certificateholders if the
Person requesting the amendment obtains a letter from each Rating Agency stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Depositor, the Custodian, the Responsible Party and the Servicers also may at
any time and from time to time amend this Agreement, but without the consent of
the Certificateholders to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of each Trust REMIC under the Code, (ii) avoid or minimize the risk of the
imposition of any tax on any Trust REMIC pursuant to the Code that would be a
claim at any time prior to the final redemption of the Certificates or (iii)
comply with any other requirements of the Code; provided that the Trustee has
been provided an Opinion of Counsel, which opinion shall be an expense of the
party requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Custodian, the Servicers, the Responsible Party and the Trustee
with the consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 66(2)/3% of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66(2)/3%, or (iii) reduce the aforesaid percentages of Certificates
the Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any such Trust REMIC to fail to qualify as a REMIC or the grantor trust to
fail to qualify as a grantor trust at any time that any Certificates are
Outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies (with a copy of such notice to the
Trustee) of such amendment, stating the provisions of the Agreement to be
amended.
Notwithstanding the foregoing provisions of this Section 10.01,
with respect to any amendment that significantly modifies the permitted
activities of the Trustee or the Servicers, any Certificate beneficially owned
by the Depositor shall be deemed not to be Outstanding (and shall not be
considered when determining the percentage of Certificateholders consenting or
when calculating the total number of Certificates entitled to consent) for
purposes of determining if the requisite consents of Certificateholders under
this Section 10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into
an amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and that
all requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Notwithstanding the foregoing, any amendment to this Agreement
shall require the prior written consent of the Swap Provider if such amendment
materially and adversely affects the rights or interests of the Swap Provider.
Section 10.02 Recordation of Agreement; Counterparts. This Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected by the Servicers at the
direction and expense of the Depositor, but only upon receipt of an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties. It is the express intent of
the parties hereto that the conveyance (i) of the Mortgage Loans by the
Depositor and (ii) of the Trust Fund by the Depositor to the Trustee each be,
and be construed as, an absolute sale thereof. It is, further, not the intention
of the parties that such conveyances be deemed a pledge thereof. However, in the
event that, notwithstanding the intent of the parties, such assets are held to
be the property of the Depositor, as the case may be, or if for any other reason
this Agreement is held or deemed to create a security interest in either such
assets, then (i) this Agreement shall be deemed to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) the conveyances provided for in this Agreement shall be deemed to be an
assignment and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05 Notices. (a) The Trustee shall promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of a Servicer, or the
Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each
Rating Agency copies (which may be provided electronically via the Trustee's
website) of the following:
(i) Each report to Certificateholders described in Section 4.03;
and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be
in writing (unless otherwise indicated in this paragraph) and shall be deemed to
have been duly given when delivered to: (a) in the case of the Depositor or the
Underwriter, Xxxxxx Xxxxxxx ABS Capital I Inc. or Xxxxxx Xxxxxxx & Co.
Incorporated, (1) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx - SPG Finance, 0000 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (2) Xxxxxxxx Xxxxx, Xxxxxx Xxxxxxx - Legal
Counsel (Securities), 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (3)
Xxxx Xxxxxxxx, Xxxxxx Xxxxxxx - Servicing Oversight, 0000 X-Xxx Xxx., Xxxxx 000,
Xxxx Xxxxx, Xxxxxxx 00000; (4) Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxx - Whole Loan
Operations, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000; (5) Xxxxx Xxxxxx, Xxxxxx
Xxxxxxx - RFPG, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (6) in
the case of a direction or demand, notification to the following email
addresses: Xxxx.Xxxxxxxx@ xxxxxxxxxxxxx.xxx, Xxxxxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx,
Xxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx and Xxxx.Xxxxxxxx@xxxxxxxxxxxxx.xxx; or such
other address as may be hereafter furnished to the other parties hereto by the
Depositor in writing; (b) in the case of JPMorgan, JPMorgan Chase Bank, National
Association, in care of Chase Home Finance LLC, 00000 Xxxxxx Xxxxxxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Dunks, with a copy to: 000 Xxxx Xxxxxx
Xxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention: General Counsel, or such other
address as may be hereafter furnished to the other parties hereto by JPMorgan in
writing; (c) in the case of First NLC, First NLC Financial Services, LLC, 000
Xxxx Xxxxxxxxx, Xxxxxxxx 0, Xxxxxxxxx Xxxxx, Xxxxxxx 00000, or such other
address as may be hereafter furnished to the other parties hereto by First NLC;
(d) in the case of HomEq Servicing Corporation, 0000 Xxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000, Attention: Portfolio Management, Facsimile No.
(000) 000-0000, with a copy to HomEq Servicing Corporation, 0000 Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Legal
Department, Facsimile No. (000) 000-0000, or such other address as may be
hereafter furnished to the other parties hereto by HomEq in writing; (e) in the
case of the Trustee, to Deutsche Bank National Trust Company, 0000 Xxxx Xx.
Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Trust Administration
MS05X4, or such other address as the Trustee may hereafter furnish to the other
parties hereto in writing; (f) in the case of LaSalle, LaSalle Bank National
Association, 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, or
such other address as may be hereafter furnished to the other parties hereto by
LaSalle in writing; and (g) in the case of each of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Assignment; Sales; Advance Facilities.
Notwithstanding anything to the contrary contained herein, except as provided in
Section 6.04, this Agreement may not be assigned by any Servicer without the
prior written consent of the Trustee and the Depositor; provided, however, each
Servicer is hereby authorized to enter into an Advance Facility under which (l)
such Servicer sells, assigns or pledges to an Advancing Person the Servicer's
rights under this Agreement to be reimbursed for any P&I Advances or Servicing
Advances and/or (2) an Advancing Person agrees to fund some or all P&I Advances
or Servicing Advances required to be made by such Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before a Servicer may enter into an Advance Facility. Notwithstanding
the existence of any Advance Facility under which an Advancing Person agrees to
fund P&I Advances and/or Servicing Advances on a Servicer's behalf, such
Servicer shall remain obligated pursuant to this Agreement to make P&I Advances
and Servicing Advances pursuant to and as required by this Agreement, and shall
not be relieved of such obligations by virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect
of P&I Advances and/or Servicing Advances made with respect to the Mortgage
Loans for which a Servicer would be permitted to reimburse itself in accordance
with this Agreement, assuming such Servicer had made the related P&I Advance(s)
and/or Servicing Advance(s).
The applicable Servicer shall maintain and provide to any
successor Servicer a detailed accounting on a loan-by-loan basis as to amounts
advanced by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding xxxxxxxxxxxx X&X Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the applicable Servicer to
provide to the related Advancing Person or its designee loan-by-loan information
with respect to each such reimbursement amount distributed to such Advancing
Person or Advance Facility trustee on each Distribution Date, to enable the
Advancing Person or Advance Facility trustee to make the FIFO allocation of each
such reimbursement amount with respect to each applicable Mortgage Loan. The
applicable Servicer shall remain entitled to be reimbursed by the Advancing
Person or Advance Facility trustee for all P&I Advances and Servicing Advances
funded by such Servicer to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 10.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Responsible Parties and the Servicers
without the consent of any Certificateholder, notwithstanding anything to the
contrary in this Agreement, upon receipt by the Trustee of an Opinion of Counsel
that such amendment has no material adverse effect on the Certificateholders or
written confirmation from the Rating Agencies that such amendment will not
adversely affect the ratings on the Certificates. Prior to entering into an
Advance Facility, the applicable Servicer shall notify the lender under such
facility in writing that: (a) the Advances financed by and/or pledged to the
lender are obligations owed to such Servicer on a non-recourse basis payable
only from the cash flows and proceeds received under this Agreement for
reimbursement of Advances only to the extent provided herein, and the Trustee
and the Trust are not otherwise obligated or liable to repay any Advances
financed by the lender; (b) such Servicer will be responsible for remitting to
the lender the applicable amounts collected by it as reimbursement for Advances
funded by the lender, subject to the restrictions and priorities created in this
Agreement; and (c) the Trustee shall not have any responsibility to track or
monitor the administration of the financing arrangement between such applicable
Servicer and the lender.
Section 10.08 Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights. Each Servicer agrees
that, on 5 Business Days prior notice, it will permit any representative of the
Depositor or the Trustee during such Person's normal business hours, to examine
all the books of account, records, reports and other papers of such Person
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants selected by
the Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision each Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense of a Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by such Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid. It is
the intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Rule of Construction. Article and section headings
are for the convenience of the reader and shall not be considered in
interpreting this Agreement or the intent of the parties hereto.
Section 10.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.13 Rights of the Swap Provider. The Swap Provider
shall be deemed a third-party beneficiary of this Agreement to the same extent
as if it were a party hereto and shall have the right to enforce its rights
under this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Depositor, the Trustee, the Servicers,
the Custodian and the Responsible Party have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
XXXXXX XXXXXXX ABS CAPITAL I INC., as Depositor
By: /s/ Xxxxxxx Xxx
-------------------------------------------
Name: Xxxxxxx Xxx
Title: Managing Director
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as a Servicer
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
HOMEQ SERVICING CORPORATION,
as a Servicer
By: /s/ Xxxxx Xxx
-------------------------------------------
Name: Xxxxx Xxx
Title: Senior Vice President
FIRST NLC FINANCIAL SERVICES, LLC
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Sr. Vice President
LASALLE BANK NATIONAL ASSOCIATION, as Custodian
By: /s/ Xxxx X. Xxxxx
-------------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee
By: /s/ Xxxxxx Xxxxx
-------------------------------------------
Name: Xxxxxx Xxxxx
Title: Associate
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxx
Title: Associate
SCHEDULE I
Mortgage Loan Schedule
(Available Upon Request to Trustee)
SCHEDULE II
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2005-4
Representations and Warranties of HomEq, as Servicer
----------------------------------------------------
HomEq hereby makes the representations and warranties set forth
in this Schedule II to the Depositor and the Trustee, as of the Closing Date.
Capitalized terms used but not otherwise defined in this Schedule II shall have
the meanings ascribed thereto in the Pooling and Servicing Agreement.
(1) HomEq is duly organized, validly existing and in good
standing under the laws of the State of New Jersey and is licensed and
qualified to transact any and all business contemplated by this Pooling
and Servicing Agreement to be conducted by HomEq in any state in which a
Mortgaged Property securing a Mortgage Loan serviced by HomEq is located
or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan serviced by HomEq and to service
each Mortgage Loan serviced by HomEq in accordance with the terms of
this Pooling and Servicing Agreement;
(2) HomEq has the full power and authority to service each
Mortgage Loan serviced by HomEq, and to execute, deliver and perform,
and to enter into and consummate the transactions contemplated by this
Pooling and Servicing Agreement and has duly authorized by all necessary
action on the part of HomEq the execution, delivery and performance of
this Pooling and Servicing Agreement; and this Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the Depositor, the Responsible Party, the other Servicer and
the Trustee, constitutes a legal, valid and binding obligation of HomEq,
enforceable against HomEq in accordance with its terms, except to the
extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by HomEq, the servicing of the Mortgage Loans serviced by
HomEq hereunder, the consummation by HomEq of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of HomEq
and will not (A) result in a breach of any term or provision of the
organizational documents of HomEq or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which HomEq is a
party or by which it may be bound, or any statute, order or regulation
applicable to HomEq of any court, regulatory body, administrative agency
or governmental body having jurisdiction over HomEq; and HomEq is not a
party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it, which materially and
adversely affects or, to HomEq's knowledge, would in the future
materially and adversely affect, (x) the ability of HomEq to perform its
obligations under this Pooling and Servicing Agreement or (y) the
business, operations, financial condition, properties or assets of HomEq
taken as a whole;
(4) No litigation is pending against HomEq that would materially
and adversely affect the execution, delivery or enforceability of this
Pooling and Servicing Agreement or the ability of HomEq to service the
Mortgage Loans serviced by HomEq or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by HomEq of, or compliance by HomEq with, this Pooling and
Servicing Agreement or the consummation by HomEq of the transactions
contemplated by this Pooling and Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date; and
(6) HomEq has the facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans serviced by HomEq.
With respect to each Mortgage Loan serviced by HomEq, to the
extent HomEq serviced such Mortgage Loan serviced by HomEq and to the extent
HomEq provided monthly reports to the three credit repositories, HomEq has fully
furnished, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and unfavorable)
on its borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis.
SCHEDULE III
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2005-4
RepresenRtations and Warranties of JPMorgan, as Servicer
--------------------------------------------------------
JPMorgan hereby makes the representations and warranties set
forth in this Schedule III to the Depositor and the Trustee, as of the Closing
Date. Capitalized terms used but not otherwise defined in this Schedule III
shall have the meanings ascribed thereto in the Pooling and Servicing Agreement.
(1) JPMorgan is a national banking association duly organized,
validly existing and in good standing under the federal laws of the
United States of America and is duly authorized and qualified to
transact any and all business contemplated by this Pooling and Servicing
Agreement to be conducted by JPMorgan in any state in which a Mortgaged
Property securing a Mortgage Loan serviced by JPMorgan is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure its ability to enforce
each Mortgage Loan serviced by JPMorgan and to service each Mortgage
Loan serviced by JPMorgan in accordance with the terms of this Pooling
and Servicing Agreement;
(2) JPMorgan has the full power and authority to service each
Mortgage Loan serviced by JPMorgan, and to execute, deliver and perform,
and to enter into and consummate the transactions contemplated by this
Pooling and Servicing Agreement and has duly authorized by all necessary
action on the part of JPMorgan the execution, delivery and performance
of this Pooling and Servicing Agreement; and this Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the Depositor, the Responsible Party, the other Servicer and
the Trustee, constitutes a legal, valid and binding obligation of
JPMorgan, enforceable against JPMorgan in accordance with its terms,
except to the extent that (a) the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by JPMorgan, the servicing of the Mortgage Loans serviced by
JPMorgan by JPMorgan hereunder, the consummation by JPMorgan of any
other of the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of JPMorgan and will not (A) result in a breach of any term or provision
of the organizational documents of JPMorgan or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which
JPMorgan is a party or by which it may be bound, or any statute, order
or regulation applicable to JPMorgan of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
JPMorgan; and JPMorgan is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject
to or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to
JPMorgan's knowledge, would in the future materially and adversely
affect, (x) the ability of JPMorgan to perform its obligations under
this Pooling and Servicing Agreement or (y) the business, operations,
financial condition, properties or assets of JPMorgan taken as a whole;
(4) JPMorgan is an approved seller/servicer for Xxxxxx Mae, an
approved servicer for Xxxxxxx Mac in good standing and is a HUD approved
non-supervised mortgagee;
(5) No litigation is pending against JPMorgan that would
materially and adversely affect the execution, delivery or
enforceability of this Pooling and Servicing Agreement or the ability of
JPMorgan to service the Mortgage Loans serviced by JPMorgan or to
perform any of its other obligations hereunder in accordance with the
terms hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by JPMorgan of, or compliance by JPMorgan with, this Pooling
and Servicing Agreement or the consummation by JPMorgan of the
transactions contemplated by this Pooling and Servicing Agreement,
except for such consents, approvals, authorizations or orders, if any,
that have been obtained prior to the Closing Date; and
(7) JPMorgan has the facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans serviced by JPMorgan.
(8) With respect to each Mortgage Loan serviced by JPMorgan, to
the extent JPMorgan serviced such Mortgage Loan serviced by JPMorgan and
to the extent JPMorgan provided monthly reports to the three credit
repositories, JPMorgan has fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information (i.e., favorable and unfavorable) on its borrower
credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
SCHEDULE IV-A
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-4
Representations and Warranties of Xxxxxx Xxxxxxx
------------------------------------------------
ABS Capital I Inc. as to the Mortgage Loans
-------------------------------------------
The Depositor hereby makes with respect the Mortgage Loans the
following representations and warranties to the Trustee, as of the Closing Date:
(1) Immediately prior to the transfer of the Mortgage Loans by
the Depositor to the Trust on the Closing Date, the Depositor had good title to
the Mortgage Loans, free and clear of any liens, charges, claims or encumbrances
whatsoever;
(2) The original loan balance of each Group I Mortgage Loan was
within Xxxxxxx Mac's and Xxxxxx Mae's dollar amount limits for conforming one-
to four-family mortgage loans; and
(3) None of the Group I Mortgage Loans has a Prepayment Charge
period at origination in excess of 3 years.
SCHEDULE IV-B
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-4
Representations and Warranties of Xxxxxx Xxxxxxx
------------------------------------------------
ABS Capital I Inc. as to certain Mortgage Loans
-----------------------------------------------
With respect the Mortgage Loans for which Acoustic Home Loans,
LLC ("Acoustic") is specified as the Originator on the Mortgage Loan Schedule,
the Depositor hereby makes the following representations and warranties to the
Trustee, as of the Closing Date (or such other date as may be expressly set
forth below):
(i) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(ii) Payments Current. Except with respect to Mortgage Loans identified
as loan numbers 80035831, 80033698 and 80029314 on the Mortgage Loan Schedule,
all payments required to be made up to the date on which Purchaser purchased the
Mortgage Loan for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Scheduled Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(iii) No Outstanding Charges. Except with respect to Mortgage Loans
identified as loan numbers 80035831, 80033698 and 80029314 on the Mortgage Loan
Schedule, there are no defaults in complying with the terms of the Mortgage, and
all taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents which previously became
due and owing have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which has
been assessed but is not yet due and payable. The Depositor has not advanced
funds, or induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment of any
amount required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the related Due
Date of the first installment of principal and interest;
(iv) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Trust, and which has been
delivered to the Trustee or to such other Person as the Depositor shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Trustee or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(v) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(vi) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac requirements.
All individual insurance policies contain a standard mortgagee clause naming
Acoustic and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and was in full force and effect and inured, to the
benefit of the Purchaser upon the purchase by Purchaser of the Mortgage Loan.
Neither the Seller nor the related Mortgagor has engaged in any act or omission
which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of either
including, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Depositor;
(vii) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to the Illinois Interest Act and prepayment penalties, have been
complied with, the consummation of the transactions contemplated hereby will not
involve the violation of any such laws or regulations;
(viii) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Depositor has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Depositor waived any default resulting from any action or inaction by the
Mortgagor;
(ix) Type of Mortgaged Property. The Mortgaged Property is a fee simple
estate that consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual residential condominium unit in a condominium project, or an
individual unit in a planned unit development, or an individual unit in a
residential cooperative housing corporation; provided, however, that any
condominium unit, planned unit development or residential cooperative housing
corporation shall conform with Acoustic's underwriting guidelines. No portion of
the Mortgaged Property is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are
manufactured homes, log homes, mobile homes, geodesic domes or other unique
property types;
(x) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a first lien Mortgage
Loan) or second lien (with respect to a second lien Mortgage Loan) on the
Mortgaged Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(A) with respect to a second lien Mortgage Loan only, the lien of
the first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments not
yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and (A) specifically
referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such appraisal;
and
(D) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a first lien
Mortgage Loan) or second lien (with respect to a second lien Mortgage Loan) and
first priority (with respect to a first lien Mortgage Loan) or second priority
(with respect to a second lien Mortgage Loan) security interest on the property
described therein and the Depositor has full right to sell and assign the same
to the Trust;
(xi) Validity of Mortgage Documents. The Mortgage Note and the Mortgage
and any other agreement executed and delivered by a Mortgagor in connection with
a Mortgage Loan are genuine, and each is the legal, valid and binding obligation
of the maker thereof enforceable in accordance with its terms (including,
without limitation, any provisions therein relating to prepayment penalties).
All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of the Depositor in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(xii) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(xiii) [RESERVED];
(xiv) Doing Business. All parties other than the Purchaser or the
Depositor which have had any interest in the Mortgage Loan, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (1) in compliance with any and
all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2) either (i) organized under the laws of
such state, or (ii) qualified to do business in such state, or (iii) a federal
savings and loan association, a savings bank or a national bank having a
principal office in such state, or (3) not doing business in such state;
(xv) LTV. No Mortgage Loan has an LTV greater than 100%;
(xvi) Title Insurance. The Mortgage Loan is covered by an ALTA lender's
title insurance policy, or with respect to any Mortgage Loan for which the
related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Acoustic, its successors and assigns, as to the first (with respect
to a first lien Mortgage Loan) or second (with respect to a second lien Mortgage
Loan) priority lien of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (A), (B) and
(C) of paragraph (j) of this Schedule, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
Acoustic, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Depositor, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy, including without limitation, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Depositor;
(xvii) No Defaults. Except with respect to Mortgage Loans identified as
loan numbers 80035831, 80033698 and 80029314 on the Mortgage Loan Schedule,
other than payments due but not yet 30 days or more delinquent, there is no
default, breach, violation or event which would permit acceleration existing
under the Mortgage or the Mortgage Note and no event which, with the passage of
time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event which would permit
acceleration, and neither the Depositor nor any of its affiliates nor any of
their respective predecessors, have waived any default, breach, violation or
event which would permit acceleration;
(xviii) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(xix) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(xx) Origination; Payment Terms. The Mortgage Loan was originated by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Payments on the Mortgage Loan commenced no more than seventy
days after funds were disbursed in connection with the Mortgage Loan. The
Mortgage Interest Rate as well as, in the case of an Adjustable Rate Mortgage
Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on the
Mortgage Loan Schedule. Except with respect to interest only Mortgage Loans
during the interest only period, the Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the Mortgage Loan Schedule, the Mortgage Loan is payable on the
first day of each month. The Mortgage Loan does not require a balloon payment on
its stated maturity date;
(xxi) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(xxii) Conformance with Agency and Underwriting Guidelines. The Mortgage
Loan was underwritten in accordance with Acoustic's underwriting guidelines. The
Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae
and no representations have been made to a Mortgagor that are inconsistent with
the mortgage instruments used;
(xxiii) Occupancy of the Mortgaged Property. As of the date that the
Purchaser purchased the Mortgage Loan from Acoustic, the Mortgaged Property is
lawfully occupied under applicable law. All inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities. Unless otherwise specified on the Mortgage Loan Schedule, the
Mortgagor represented at the time of origination of the Mortgage Loan that the
Mortgagor would occupy the Mortgaged Property as the Mortgagor's primary
residence;
(xxiv) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(xxv) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Trust to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(xxvi) [RESERVED];
(xxvii) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
under this Agreement for each Mortgage Loan have been delivered to the Trustee;
(xxviii) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in Acoustic's Underwriting Guidelines;
(xxix) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(xxx) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder and to the best of Depositor's knowledge, such
provision is enforceable;
(xxxi) Assumability. With respect to each Adjustable Rate Mortgage Loan,
the Mortgage Loan Documents provide that after the related first Interest Rate
Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements, if any, stated in
the Mortgage Loan Documents;
(xxxii) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Depositor, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(xxxiii) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a first lien Mortgage Loan) or second
(with respect to a second lien Mortgage Loan) lien priority by a title insurance
policy, an endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac.
The consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan;
(xxxiv) Mortgaged Property Undamaged; No Condemnation Proceedings. There
is no proceeding pending or threatened for the total or partial condemnation of
the Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty so as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended and each Mortgaged
Property is in good repair. There have not been any condemnation proceedings
with respect to the Mortgaged Property;
(xxxv) Collection Practices; Escrow Deposits; Interest Rate Adjustments.
The origination, servicing and collection practices used by Acoustic with
respect to the Mortgage Loan have been in all respects in compliance with
accepted servicing practices, applicable laws and regulations, and have been in
all respects legal and proper. With respect to escrow deposits and Escrow
Payments, all such payments are in the possession of, or under the control of,
the Depositor or the interim servicer and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. All Escrow Payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due the Depositor have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
Acoustic or its interim servicer executed and delivered any and all notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(xxxvi) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from an adjustable rate to a fixed rate;
(xxxvii) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the date in which Purchaser purchased the Mortgage Loan that has
resulted or will result in the exclusion from, denial of, or defense to coverage
under any applicable hazard insurance policy, or bankruptcy bond (including,
without limitation, any exclusions, denials or defenses which would limit or
reduce the availability of the timely payment of the full amount of the loss
otherwise due thereunder to the insured), irrespective of the cause of such
failure of coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by the
Depositor or by any officer, director, or employee of the Depositor or any
designee of the Depositor or any corporation in which the Depositor or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(xxxviii) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgaged
Property; and nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(xxxix) Servicemembers' Civil Relief Act. The Mortgagor has not notified
the Depositor, and the Depositor has no knowledge of any relief requested or
allowed to the Mortgagor under the Servicemembers' Civil Relief Act or other
similar state statute;
(xl) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the approval of the Mortgage Loan application
by an appraiser, duly appointed by Acoustic, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of
Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated;
(xli) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and Acoustic has complied with, all applicable law with respect to the making of
the Mortgage Loans;
(xlii) Construction or Rehabilitation of Mortgaged Property. No Mortgage
Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(xliii) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and Acoustic
has notified the senior lienholder in writing of the existence of the second
lien Mortgage Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the second
lien Mortgage Loan is required by the holder of the related first lien or (b)
such consent has been obtained and is contained in the Mortgage File;
(xliv) Credit Reporting. Acoustic, or the interim servicer has caused to
be fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax and Experian, on a monthly
basis;
(xlv) Escrow Analysis. If applicable, with respect to each Mortgage,
Acoustic has within the last twelve months (unless such Mortgage was originated
within such twelve month period) analyzed the required Escrow Payments for each
Mortgage and adjusted the amount of such payments so that, assuming all required
payments are timely made, any deficiency will be eliminated on or before the
first anniversary of such analysis, or any overage will be refunded to the
Mortgagor, in accordance with RESPA and any other applicable law;
(xlvi) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with accepted servicing practices;
(xlvii) No Default Under First Lien. With respect to each second lien
Mortgage Loan, the related first lien Mortgage Loan related thereto is in full
force and effect, and there is no default, breach, violation or event which
would permit acceleration existing under such first Mortgage or Mortgage Note,
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration thereunder;
(xlviii) Right to Cure First Lien. With respect to each second lien
Mortgage Loan, the related first lien Mortgage contains a provision which
provides for giving notice of default or breach to the mortgagee under the
Mortgage Loan and allows such mortgagee to cure any default under the related
first lien Mortgage;
(xlix) No Failure to Cure Default. The Depositor has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(l) [RESERVED];
(li) Leaseholds. If the Mortgage Loan is secured by a leasehold estate,
(1) the ground lease is assignable or transferable; (2) the ground lease will
not terminate earlier than five years after the maturity date of the Mortgage
Loan; (3) the ground lease does not provide for termination of the lease in the
event of lessee's default without the mortgagee being entitled to receive
written notice of, and a reasonable opportunity to cure the default; (4) the
ground lease permits the mortgaging of the related Mortgaged Property; (5) the
ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(lii) Charge Penalty. Each Mortgage Loan that is subject to a prepayment
penalty as provided in the related Mortgage Note is identified on the Mortgage
Loan Schedule. With respect to Mortgage Loans originated prior to October 1,
2002, no such Charge Penalty may be imposed for a term in excess of five (5)
years following origination. With respect to Mortgage Loans originated on or
after October 1, 2002, no such Charge Penalty may be imposed for a term in
excess of three (3) years following origination;
(liii) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan (pursuant to Appendix E of the Standard & Poor's Glossary),
as applicable, and no Mortgage Loan originated on or after October 1, 2002
through July 6, 2003 is governed by the Georgia Fair Lending Act. No Mortgage
Loan is covered by the Home Ownership and Equity Protection Act of 1994 and no
Mortgage Loan is in violation of any comparable state or local law;
(liv) Single-premium credit life insurance policy. In connection with
the origination of any Mortgage Loan, no proceeds from such Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy;
(lv) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
under Section 860G(a)(3) of the Code;
(lvi) Tax Service Contract. Each Mortgage Loan is covered by a paid in
full, life of loan, tax service contract, and such contract is transferable;
(lvii) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(lviii) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of
Acoustic, or is in the process of being recorded;
(lix) Mortgagor Bankruptcy. On or prior to the date 60 days after the
date on which Purchaser purchased the Mortgage Loan, the Mortgagor has not filed
and will not file a bankruptcy petition or has not become the subject and will
not become the subject of involuntary bankruptcy proceedings or has not
consented to or will not consent to the filing of a bankruptcy proceeding
against it or to a receiver being appointed in respect of the related Mortgaged
Property;
(lx) [RESERVED];
(lxi) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of Xxxxxx Mae Guides;
(lxii) Mortgagor Selection. No Mortgagor was encouraged or required to
select a Mortgage Loan product offered by the originator which is a higher cost
product designed for less creditworthy mortgagors, unless at the time of the
Mortgage Loan's origination, such Mortgagor did not qualify taking into account
credit history and debt-to-income ratios for a lower-cost credit product then
offered by the originator or any Affiliate of the originator. If, at the time of
loan application, the Mortgagor may have qualified for a lower-cost credit
product then offered by any mortgage lending Affiliate of the originator, the
originator referred the related Mortgagor's application to such Affiliate for
underwriting consideration;
(lxiii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(lxiv) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the originator, as servicer, did not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(lxv) Purchase of Insurance. No Mortgagor was required to purchase any
single premium credit insurance policy (e.g., life, disability, property,
accident, unemployment or health insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single-premium credit insurance policy (e.g., life,
disability, property, accident, unemployment, mortgage or health insurance) in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(lxvi) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than 5% of the principal amount of such
Mortgage Loan, such 5% limitation is calculated in accordance with Xxxxxx Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Mae Guides;
(lxvii) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(lxviii) Balloon Mortgage Loans. No Balloon Loan has an original stated
maturity of less than seven (7) years; and
(lxix) No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
For the purpose of this schedule, Servicing Transfer Date means,
with respect to any JPMorgan Serviced Mortgage Loan that was not transferred on
or prior to the Closing Date, November 29, 2005, or such other date as to which
servicing of such Mortgage Loan transfers from JPMorgan to HomEq.
SCHEDULE IV-C
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-4
Representations and Warranties of Xxxxxx Xxxxxxx
------------------------------------------------
ABS Capital I Inc. as to certain Mortgage Loans
-----------------------------------------------
With respect the Mortgage Loans for which MILA, Inc. ("MILA") is
specified as the Originator on the Mortgage Loan Schedule, the Depositor hereby
makes the following representations and warranties to the Trustee, as of the
Closing Date (or such other date as may be expressly set forth below):
(a) The Depositor has delivered to the Trustee, as of the Cut-off
Date, the Data Tape Information and that Data Tape Information and the
information set forth on the Mortgage Loan Schedule are true and
correct, including, without limitation, the terms of the Prepayment
Charges, if any, as of the Closing Date.
(b) [RESERVED].
(c) There are no restrictions, contractual or governmental, which
would impair the ability of Trust or its designees from servicing the
Mortgage Loan.
(d) Except with respect to Mortgage Loans identified as loan
numbers 2004-08-26-00031 and 2005-04-20-00094 on the Mortgage Loan
Schedule, the Mortgage Loan is not in default and all monthly payments
due prior to the transaction date have been timely paid and all taxes,
assessments, insurance premiums, water, sewer, and municipal charges,
leasehold payments or ground rents relating to the Mortgaged Property
have been paid. The Depositor has not advanced funds or induced or
solicited any advances or funds by a party other than a borrower
directly or indirectly, for the payment of any amounts required by the
Mortgage Loan.
(e) Except with respect to Mortgage Loans identified as loan
numbers 2004-08-26-00031 and 2005-04-20-00094 on the Mortgage Loan
Schedule, there is no default, breach, violation, anticipated breach or
event of acceleration existing under the Mortgage or the related
Mortgage Note and no existing or known event which, with the passage of
time (or with notice and the expiration of any grace or cure period),
would constitute a default, breach, violation or event of acceleration
under such Mortgage or the related Mortgage Note.
(f) The Mortgage Loan is not subject to any right of rescission,
set-off, counter claim or defense and is not unenforceable under any
terms. The Mortgage Note, the Mortgage and any other agreement executed
and delivered by a borrower or guarantor, if applicable, are genuine,
legal, valid, binding and enforceable obligations of the maker thereof.
All parties to the Mortgage Note and any other agreement executed and
delivered by a borrower or guarantor, if applicable, had legal capacity
to execute such documents and all such documents have, in fact, been
properly executed by such parties.
(g) The Mortgage Loan, and the funding thereof, meets, or is
exempt from, applicable state and federal laws, regulations and other
requirements pertaining to usury, fees, and expenses incurred in the
making of that mortgage loan (this shall include, but not be limited to,
requirements under the Real Estate Settlement Procedures Act).
(h) Any and all requirements of any federal, state or local law,
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity and disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any
provisions therein relating to Prepayment Charges, have been complied
with, the consummation of the transactions contemplated hereby will not
involve the violation of any such laws or regulations.
(i) The proceeds of the Mortgage Loan have been fully disbursed
and there is no requirement or anticipation of future advances
thereunder (other than any escrow holdbacks retained pursuant to the
terms of a related construction loan). All costs, fees and expenses
incurred in making, closing or recording the Mortgage Loan have been
paid.
(j) As of the date that Purchaser purchased the Mortgage Loan,
and, to the Depositor's knowledge as of the Closing Date, there were no
mechanic's liens or claims for work, labor or material affecting the
Mortgaged Property (or the related residential dwelling unit at the
underlying Mortgaged Property, in the case of a Co-op Loan) which are or
may be a lien prior to the lien of such Mortgage except those which are
insured against by the title insurance policy.
(k) With respect to each Mortgage Loan, which is not a Co-op
Loan, all of the improvements, which are included for purposes of
determining the Appraised Value of the Mortgaged Property, lie wholly
within the boundaries and building restriction lines of such property
and there are no adverse material conditions that would affect the
Appraised Value. No improvements on the adjoining property encroach upon
the Mortgaged Property except as insured against by the related title
policy.
(l) Any and all appraisals prepared for purposes of the Mortgage
Loan to verify and validate the value of the Mortgaged Property (or the
related residential dwelling unit at the underlying Mortgaged Property,
in the case of a Co-op Loan) were prepared by an unbiased third party
which is a duly qualified appraiser and each such appraisal validly and
accurately represents the current market value of the Mortgaged Property
(or the related residential dwelling unit at the underlying Mortgaged
Property, in the case of a Co-op Loan) at the time the appraisal was
performed.
(m) As of the date that Purchaser purchased the Mortgage Loan,
and to the Depositor's knowledge as of the Closing Date, no improvement
located on or being part of the Mortgaged Property (or underlying
Mortgaged Property, in the case of a Co-op Loan) was in violation of any
applicable zoning law or regulation.
(n) To the Depositor's knowledge, there are no hazardous
substances or toxic waste located on or under the Mortgaged Property so
as to affect the value of the Mortgaged Property.
(o) There is no proceeding pending or, to the Depositor's
knowledge threatened, for the total or partial condemnation of the
Mortgaged Property (or underlying Mortgaged Property, in the case of a
Co-op Loan) and said property is undamaged by waste, fire, earthquake,
earth movement, subsidence, wind, storm, flood, water, tornado or other
casualty and the Mortgaged Property (or underlying Mortgaged Property,
in the case of a Co-op Loan) is in good repair.
(p) The Mortgage File contains each of the documents and
instruments specified to be included therein as required under this
Agreement, and each such document or instrument is in a form specified
by this Agreement.
(q) [RESERVED].
(r) The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect from the date of
origination, except by a written instrument which has been recorded, if
necessary to protect the interest of the Trustee, and which has been
delivered to the Trustee or to such other person as the Trustee shall
designate in writing. The substance of any such waiver, alteration or
modification has been approved by the issuer of any related private
mortgage insurance policy and the title insurer, if any, to the extent
required by the policy. No borrower has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
issuer of any related private mortgage insurance policy and the title
insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage File delivered to the Trustee or to
such other person as the Trustee shall designate in writing.
(s) Each Mortgage, deed of trust and all other security
instruments securing such Mortgage Loan have been duly recorded in or
submitted for recording in the office of the jurisdiction where the
premises are located.
(t) With respect to each Mortgage Loan which is not a Co-op Loan,
a title insurance policy has been or will be issued in an acceptable
form as described in the underwriting guidelines and is valid and
binding. Each such policy shall be issued by a title insurer acceptable
to the Purchaser as specified in the underwriting guidelines and
qualified to do business in the jurisdiction where the subject is
located. Each such policy shall insure MILA, Inc. , its successors and
assigns to the first (or, with respect to any Second Lien Mortgage Loan,
second) priority of the Mortgage, and shall be in the amount of the
original principal of the Mortgage Loan. MILA, Inc. represented and
warranted that they are the named insured and sole insured of such title
policy and that the assignment to the Purchaser of MILA, Inc.'s interest
in such title insurance does not require the consent of or notification
to the insurer, and that such insurance policy is and will remain in
full force and effect and will insure to the benefit of the Purchaser
and the Purchaser's assigns upon the purchase of the Mortgage Loan by
Purchaser and any subsequent assignments by the Purchaser. MILA, Inc.
warranted that no claims have been made under such title insurance
policy. Neither the Depositor nor any prior holder of the Mortgage has
done anything, which would impair the coverage of such title insurance
policy.
(u) The Mortgaged Property (or underlying Mortgaged Property, in
the case of a Co-op Loan) and all improvements thereon are insured
against loss by fire and other such hazards as are customary in the area
where the Mortgaged Property (or underlying Mortgaged Property, in the
case of a Co-op Loan) is located. Such coverage shall contain fire and
hazard insurance policy with extended coverage as called for under
underwriting guidelines. The coverage under such policy shall be at
least equal to the greater of the outstanding principle of the Mortgage
Loan, 80% of the maximum insurable value of the improvements, or an
amount sufficient to prevent the borrower or loss payee from becoming a
co-insurer (however, under no circumstances shall the amount of
insurance required exceed that amount allowed by law). Such insurance
policy was issued by an insurer meeting the requirement of the
underwriting guidelines. Such insurance policy and any other insurance
policy related to the Mortgage Loan or the Mortgaged Property (or
underlying Mortgaged Property, in the case of a Co-op Loan) contains a
standard mortgagee clause naming MILA, Inc. and its successors and
assigns as mortgagee and loss payee. Each Mortgage obligates the
borrower thereunder to maintain such insurance at their costs and
expense and allows the mortgagee to obtain and maintain such insurance
at borrower's costs and expense, and to seek reimbursement from the
borrower should there be any failure by the borrower to maintain such
policy. If any flood insurance is required by applicable law or pursuant
to the Mortgage Loan documents or any other applicable requirement, then
it has been obtained and in full force and effect. Any statements made
by the borrower or the MILA, Inc. in applications for such policies were
true, complete and correct at the time the application was made and
there are no events that have occurred since that policy was issued that
would affect the stated coverage of the policy.
(v) Any trustee named in the Mortgage Loan is duly qualified and
authorized to serve as such in the applicable jurisdiction has been
properly designated and currently so serves. No fees or expenses are
currently due to such trustee other than any fees or expenses that might
be incurred after a default.
(w) [RESERVED].
(x) [RESERVED].
(y) The origination, servicing and collection practices with
respect to the Mortgage Loan have been in all material respects in
accordance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all material respects legal and proper.
With respect to escrow deposits and escrow payments, all such payments
are in the possession of the depositor and there exist no deficiencies
in connection therewith for which customary arrangements for repayment
thereof have not been made. All escrow payments have been collected in
full compliance with state and federal law and the provisions of the
related mortgage note and mortgage. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to
pay for every item that remains unpaid and has been assessed but is not
yet due and payable. No escrow deposits or escrow payments or other
charges or payments due to the Depositor have been capitalized under the
Mortgage or the Mortgage Note. Any interest required to be paid pursuant
to state, federal and local law has been properly paid and credited.
(z) The documents, instruments, agreements and other information
submitted to the Trust were not falsified and contain no untrue
statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the information and statements
therein not misleading. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including without limitation, the
borrower, any appraiser, any builder or developer, or any other party
involved in the origination or servicing of the Mortgage Loan.
(aa) The Mortgage Loan has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part (other than as to
Principal Prepayments in Full which may have been received prior to the
Closing Date), and the Mortgaged Property has not been released from the
lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, cancellation,
subordination, rescission or release.
(bb) Each Mortgage Loan is secured by a fee simple estate, and no
Mortgage Loan is secured by a leasehold estate, except that with respect
to real property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely-accepted practice, in
which case the Mortgaged Property (or underlying Mortgaged Property, in
the case of a Co-op Loan) may be a leasehold estate. If the Mortgage
Loan is secured by a long-term leasehold estate (i) the ground lease is
assignable or transferable; (ii) the ground lease will not terminate
earlier than five years after the maturity date of the mortgage loan;
(iii) the ground lease does not provide for termination of the ground
lease in the event of lessee's default without the mortgagee being
entitled to receive written notice of, and a reasonable opportunity to
cure the default; (iv) the ground lease permits the mortgaging of the
related Mortgaged Property (or underlying Mortgaged Property in the case
of a Co-op Loan); (v) the ground lease protects the mortgagee's
interests in the event of a property condemnation; and (vi) all ground
lease rents, other payments or assessments that have become due have
been paid.
(cc) No portion of the Mortgaged Property (or underlying
Mortgaged Property, in the case of a Co-op Loan) is used for commercial
purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial purposes as
long as the Mortgaged Property (or underlying Mortgaged Property, in the
case of a Co-op Loan) has not been altered for commercial purposes and
is not storing any chemicals or raw materials other than those commonly
used for homeowner repair, maintenance and/or household purposes.
(dd) With respect to each Mortgage Loan that is not a Co-op Loan,
the Mortgage is a valid, existing and enforceable first (or, with
respect to each second lien Mortgage Loan, second) lien on the Mortgaged
Property, including all improvements on the Mortgaged Property subject
only to (i) with respect to a second lien Mortgage Loan only, the lien
of the first mortgage on the Mortgaged Property, (ii) the lien of
current real property taxes and assessments not yet due and payable,
(iii) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording being
acceptable to mortgage lending institutions generally and specifically
referred to in the owner's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the
appraised value of the Mortgaged Property (or underlying Mortgaged
Property, in the case of a Co-op Loan), and (iv) other matters to which
like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property (or underlying Mortgaged Property, in the case of a
Co-op Loan). Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, existing and enforceable first (or,
with respect to each second lien Mortgage Loan, second) lien and first
(or, with respect to each second lien Mortgage Loan, second) priority
security interest on the property described therein and the Depositor
has the full right to sell and assign the same to the Trust. With
respect to each Co-op Loan, the related Mortgage is a valid, subsisting
and enforceable first priority security interest on the related
cooperative shares securing the Mortgage Note, subject only to (i) with
respect to a second lien Mortgage Loan only, the lien of the first
mortgage on the Mortgaged Property, (ii) liens of the related
residential cooperative housing corporation for unpaid assessments
representing the borrower's pro rata share of the related residential
cooperative housing corporation's payment for its blanket mortgage,
current and future real property taxes, insurance premiums, maintenance
fees and other assessments to which like collateral is commonly subject
and (iii) other matters to which like collateral is commonly subject to
which do not materially interfere with the benefits of the security
interest intended to be provided by the related security agreement.
(ee) As of the Closing Date, the Mortgaged Property (or
underlying Mortgaged Property, in the case of a Co-op Loan) is lawfully
occupied under applicable law. All inspections, licenses and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property (or underlying Mortgaged Property, in
the case of a Co-op Loan) and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy and
fire underwriting certificates, have been made or obtained from the
appropriate authorities. The Depositor has not received notification
from any governmental authority that the Mortgaged Property (or
underlying mortgaged property, in the case of a Co-op Loan) is in
material non-compliance with such laws or regulations, is being used,
operated or occupied unlawfully or has failed to have or obtain such
inspection, licenses or certificates, as the case may be. The Depositor
has not received notice of any violation or failure to conform with any
such law, ordinance, regulation, standard, license or certificate.
(ff) None of the Mortgage Loans (a) is covered by the Home
Ownership and Equity Protection Act of 1994 or (b) is classified as a
"high cost home," "threshold," "covered" (excluding a "covered home
loan" as defined in clause (1) of the definition of such term under the
New Jersey Home Ownership Security Act of 2002), "high risk home",
"predatory" or similar loan under any other applicable federal, state or
local law (including without limitation any regulation or ordinance) (or
a similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability
for residential mortgage loans having high interest rates, points and/or
fees) or (c) is a Mortgage Loan categorized as "High Cost" or "Covered"
pursuant to Appendix E of the Standard & Poor's Glossary, and no
Mortgage Loan originated on or after October 1, 2002 through March 6,
2003 is governed by the Georgia Fair Lending Act.
(gg) [Reserved.]
(hh) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property (or underlying Mortgaged Property, in the case of a Co-op Loan)
of the benefits of the security provided thereby, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Following the date of
origination of the Mortgage Loan, the Mortgaged Property (or underlying
Mortgaged Property, in the case of a Co-op Loan) has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the borrower has
not filed for protection under applicable bankruptcy laws. There is no
homestead or other exemption or right available to the borrower or any
other person which would interfere with the right to sell the Mortgaged
Property (or underlying Mortgaged Property, in the case of a Co-op Loan)
at a trustee's sale or the right to foreclosure the Mortgage, subject to
applicable federal and state laws and judicial precedent with respect to
bankruptcy and right of redemption or similar law.
(ii) [RESERVED].
(jj) MILA, Inc. has complied with all applicable anti-money
laundering laws and regulations, including without limitation the USA
Patriot Act of 2001 (collectively, the "Anti-Money Laundering Laws");
MILA, Inc. has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the
requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including
with respect to the legitimacy of the applicable borrower and the origin
of the assets used by the said borrower to purchase the property in
question, and maintains, and will maintain, sufficient information to
identify the applicable borrower for purposes of the Anti-Money
Laundering Laws.
(kk) The Mortgage Loan was originated by a mortgagee approved by
the Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act, or a savings and loan association,
a savings bank, commercial bank, credit union, insurance company or
similar institution which is supervised and examined by a federal or
state authority.
(ll) The borrower has not notified the Depositor, and the
Depositor has no knowledge of any relief requested or allowed to the
borrower under the Soldiers and Sailors' Civil Relief Act of 1940 as
amended, or other similar state statute.
(mm) No action, inaction or event has occurred and, to the best
of the Depositor's knowledge, no state of facts exists or has existed
that has resulted or will result in the exclusion from, denial of, or
defense to coverage under any related insurance policy, irrespective of
the cause of such failure of coverage. In connection with the placement
of any such insurance, no commission, fee, or other compensation has
been or will be received by the Depositor or by any officer, director,
or employee of the Depositor or any designee of the Depositor or any
corporation in which the Depositor or any officer, director, or employee
had a financial interest at the time of placement of such insurance.
(nn) No Mortgage Loan was made in connection with the
construction (other than a "construct-to-perm" loan) or rehabilitation
of a Mortgaged Property (or underlying Mortgaged Property, in the case
of a Co-op Loan) or facilitating the trade-in or exchange of a Mortgaged
Property (or underlying Mortgaged Property, in the case of a Co-op
Loan).
(oo) The assignment of Mortgage (except with respect to any
Mortgage that has been recorded in the name of MERS or its designee)
with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property (or underlying Mortgaged Property, in the case of a
Co-op Loan) is located.
(pp) The Mortgage Loan does not contain provisions pursuant to
which monthly payments are paid or partially paid with funds deposited
in any separate account established by MILA, Inc., the borrower, or
anyone on behalf of the borrower, or paid by any source other than the
borrower nor does it contain any other similar provisions which may
constitute a "buydown" provision. The Mortgage Loan is not a graduated
payment Mortgage Loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature.
(qq) MILA, Inc. or an Affiliate has, in its capacity as prior
servicer for each Mortgage Loan, fully furnished, in accordance with the
Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
(rr) With respect to each Mortgage Loan that is subject to a
Prepayment Charge, no such Prepayment Charge may be imposed for a term
in excess of three years following origination. Any prepayment penalty
is in an amount equal to the lesser of (a) the maximum amount permitted
under applicable state law, and (b) if the Mortgaged Property is secured
by residential real property located in a state other than Arizona,
Maine, Massachusetts, New York, South Carolina or Wisconsin, six months
interest on the related prepaid amount.
(ss) With respect to each Co-op Loan, the stock that is pledged
as security for the Mortgage Loan is held by a person as a
tenant-stockholder (as defined in Section 216 of the Internal Revenue
Code of 1986, as amended) in a cooperative housing corporation (as
defined in Section 216 of the Internal Revenue Code of 1986, as
amended).
(tt) The Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code.
(uu) Each Mortgage Loan is in compliance with the anti-predatory
lending eligibility for purchase requirements of Xxxxxx Xxx Guides.
(vv) No Mortgagor was encouraged or required to select a Mortgage
Loan product offered by the Originator which is a higher cost product
designed for less creditworthy mortgagors, unless at the time of the
Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt to income ratios for a lower cost credit
product then offered by the Originator or any Affiliate of the
Originator. If, at the time of loan application, the Mortgagor may have
qualified for a lower cost credit product then offered by any mortgage
lending Affiliate of the Originator, the Originator referred the related
Mortgagor's application to such Affiliate for underwriting
consideration;
(ww) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs objective mathematical principles which
relate the related Mortgagor's income, assets and liabilities to the
proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the related Mortgagor had a reasonable ability to
make timely payments on the Mortgage Loan;
(xx) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity:
(i) prior to the Mortgage Loan's origination, the related Mortgagor
agreed to such premium in exchange for a monetary benefit, including but
not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of
obtaining a mortgage loan that did not require payment of such a
premium, (iii) the prepayment premium is disclosed to the related
Mortgagor in the Mortgage Loan documents pursuant to applicable state
and federal law, and (iv) notwithstanding any state or federal law to
the contrary, the Originator, as servicer, shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated
as the result of the related Mortgagor's default in making the Mortgage
Loan payments;
(yy) No Mortgagor was required to purchase any credit life,
disability, accident or health insurance product as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid
single premium credit life, disability, unemployment, property, accident
or health insurance policy in connection with the origination of the
Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase
single premium credit insurance policies as part of the origination of,
or as a condition to closing, such Mortgage Loan;
(zz) All points and fees related to each Mortgage Loan were
disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage
Loan in an original principal amount of less than $60,000 which would
have resulted in an unprofitable origination, no Mortgagor was charged
"points and fees" (whether or not financed) in an amount greater than 5%
of the principal amount of such Mortgage Loan, such 5% limitation is
calculated in accordance with Xxxxxx Mae's anti predatory lending
requirements as set forth in the Xxxxxx Xxx Guides;
(aaa) All fees and charges (including finance charges), whether
or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Mortgage Loan, have been
disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation;
(bbb) No first lien Mortgage Loan has an LTV greater than 100%,
and no second lien Mortgage Loan has an CLTV greater than 100%; and
(ccc) No Mortgage Loan originated on or after July 1, 2004
requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan
transaction.
For the purpose of this schedule, "Servicing Transfer Date"
means, with respect to any JPMorgan Serviced Mortgage Loan that was not
transferred on or prior to the Closing Date, November 29, 2005, or such other
date as to which servicing of such Mortgage Loan transfers from JPMorgan to
HomEq.
SCHEDULE V
Mortgage Pass-Through Certificates,
Series 2005-4
Representations and Warranties of First NLC as to the Mortgage Loans
--------------------------------------------------------------------
First NLC hereby makes the representations and warranties set
forth in this Schedule V, as to First NLC Mortgage Loans only, to the Depositor,
the Servicers and the Trustee, as of November 29, 2005 (the "Securitization
Closing Date") (unless otherwise expressly indicated). Capitalized terms used
but not otherwise defined in this Agreement shall have the meanings ascribed
thereto in the First NLC Purchase Agreement.
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. Except with respect to First NLC Mortgage
Loans representing approximately 0.10% of the aggregate principal balance of
First NLC Mortgage Loans as of the Cut-off Date, as of the Servicing Transfer
Date, all payments required to be made up to the related Closing Date for the
Mortgage Loan under the terms of the Mortgage Note, other than payments not yet
30 days delinquent, have been made and credited. No payment required under the
Mortgage Loan is 30 days or more delinquent nor has any payment under the
Mortgage Loan been 30 days or more delinquent at any time since the origination
of the Mortgage Loan. The first Monthly Payment shall be made with respect to
the Mortgage Loan on its related Due Date or within the grace period, all in
accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. Except with respect to First NLC
Mortgage Loans representing approximately 0.10% of the aggregate principal
balance of First NLC Mortgage Loans as of the Cut-off Date, as of the Servicing
Transfer Date, there are no defaults in complying with the terms of the
Mortgage, and all taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or an escrow of funds has been established
in an amount sufficient to pay for every such item which remains unpaid and
which has been assessed but is not yet due and payable. The Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly, for the payment of
any amount required under the Mortgage Loan, except for interest accruing from
the date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by one month the
related Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. As of the Servicing Transfer Date,
the terms of the Mortgage Note and Mortgage have not been impaired, waived,
altered or modified in any respect, from the date of origination except by a
written instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing, and the terms of
which are reflected in the related Mortgage Loan Schedule. The substance of any
such waiver, alteration or modification has been approved by the title insurer,
if any, to the extent required by the policy, and its terms are reflected on the
related Mortgage Loan Schedule, if applicable. No Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement, approved
by the issuer of the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. As of the Servicing Transfer Date, pursuant
to the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable insurer against loss by
fire, hazards of extended coverage and such other hazards as are provided for in
the Xxxxxx Xxx Guides or by Xxxxxxx Mac, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration as in effect which policy conforms to
Xxxxxx Xxx and Xxxxxxx Mac requirements, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. As of the Servicing Transfer
Date, the Mortgage has not been satisfied, canceled, subordinated or rescinded,
in whole or in part, and the Mortgaged Property has not been released from the
lien of the Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or rescission.
The Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. As of the Servicing Transfer Date , no portion of
the Mortgaged Property is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) on the Mortgaged
Property, including all buildings and improvements on the Mortgaged Property and
all installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all additions,
alterations and replacements made at any time with respect to the foregoing. The
lien of the Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of
the first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and
assessments not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date
of recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B)
which do not adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. Immediately prior to the Closing Date, subject to
the lien of a warehouse lender that was released prior to the closing of any
Mortgage Loan sale, the Seller was the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon the
sale of the Mortgage Loans to the Purchaser, the Seller retained the Mortgage
Files or any part thereof with respect thereto not delivered to the Custodian,
the Purchaser or the Purchaser's designee, in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan. Immediately prior
to the Closing Date, the Mortgage Loan was not assigned or pledged, and the
Seller had good, indefeasible and marketable title thereto, and had full right
to transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and had full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to the First NLC Purchase Agreement and following the
sale of each Mortgage Loan, the Purchaser owned such Mortgage Loan free and
clear of any encumbrance, equity, participation interest, lien, pledge, charge,
claim or security interest. The Seller intended to relinquish all rights to
possess, control and monitor the Mortgage Loan. After the related Closing Date,
the Seller had no right to modify or alter the terms of the sale of the Mortgage
Loan and the Seller had no obligation or right to repurchase the Mortgage Loan
or substitute another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. As of the Closing Date, all parties which
have had any interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held and disposed
of such interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Except with respect to First NLC Mortgage Loans
representing approximately 0.10% of the aggregate principal balance of First NLC
Mortgage Loans as of the Cut-off Date, as of the Servicing Transfer Date, other
than payments due but not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(r) No Mechanics' Liens. As of the Servicing Transfer Date, there
are no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could give
rise to such liens) affecting the related Mortgaged Property which are or may be
liens prior to, or equal or coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated
by a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related
Closing Date the Mortgaged Property is lawfully occupied under applicable law.
All inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed
of trust, a trustee, authorized and duly qualified under applicable law to serve
as such, has been properly designated and currently so serves and is named in
the Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor,
the Mortgage File or the Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors who invest in mortgage loans
similar to the Mortgage Loan to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan, or cause the Mortgage Loans to
prepay during any period materially faster or slower than the mortgage loans
originated by the Seller generally;
(aa) Delivery of Mortgage Documents. As of the Servicing Transfer
Date, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian. The Seller is in possession
of a complete, true and accurate Mortgage File in compliance with Exhibit A to
the Purchase Agreement, except for such documents the originals of which have
been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan,
the Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or transferred without the prior written consent
of the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made
to the Mortgagor prior to the applicable Cut-off Date have been consolidated
with the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
As of the Servicing Transfer Date, there is no proceeding pending or threatened
for the total or partial condemnation of the Mortgaged Property. The Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair. There have
not been any condemnation proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. As of the Servicing Transfer Date, the origination, servicing and
collection practices used by the Seller and the Interim Servicer with respect to
the Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of, or under the control of, the Seller
or the Interim Servicer and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Interim Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does
not contain a provision whereby the Mortgagor is permitted to convert the
Mortgage Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. As of the Closing Date,
and to the best of the Seller's knowledge as of the Servicing Transfer Date,
there is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. As of the Servicing
Transfer Date, the Mortgagor has not notified the Seller, and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the Relief
Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement
to the effect that the Mortgagor has received all disclosure materials required
by, and the Seller has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall maintain such statement in the
Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. As of the Servicing Transfer Date, the
Seller has caused to be fully furnished, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (i.e., favorable and unfavorable) on its borrower credit files to
Equifax, Experian, and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis;
(ss) Escrow Analysis. As of the Servicing Transfer Date, if
applicable, with respect to each Mortgage, the Seller has within the last twelve
months (unless such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted the amount
of such payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior Servicing. As of the Servicing Transfer Date , each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No Default Under First Lien. As of the Servicing Transfer
Date, with respect to each Second Lien Loan, the related First Lien Loan related
thereto is in full force and effect, and there is no default, breach, violation
or event which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. As of the Servicing Transfer
Date, the Seller has not received a written notice of default of any senior
mortgage loan related to the Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined
in the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) as of the Closing Date and to the Seller's Knowledge as of the
Servicing Transfer Date, all ground lease rents, other payments, or assessments
that have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High
Cost Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or
after October 1, 2002 through July 6, 2003 is governed by the Georgia Fair
Lending Act. No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 and no Mortgage Loan is in violation of any comparable
state or local law;
(bbb) [Reserved];
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Either (x) each Mortgage Loan is
covered by a paid in full, life of loan, tax service contract, and such contract
is transferable, or (y) on the related Closing Date the Purchaser shall net
$75.00 per Mortgage Loan from the related Purchase Price to cover the cost of
such a tax service contract;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. As of the Servicing Transfer Date,
the Mortgagor has not filed and will not file a bankruptcy petition or has not
become the subject and will not become the subject of involuntary bankruptcy
proceedings or has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect of
the related Mortgaged Property;
(hhh) No Prior Offer. As of the Closing Date, the Mortgage Loan
has not previously been offered for sale;
(iii) [Reserved];
(jjj) Mortgagor Selection. No Mortgagor was encouraged or
required to select a Mortgage Loan product offered by the Originator which is a
higher cost product designed for less creditworthy mortgagors, unless at the
time of the Mortgage Loan's origination, such Mortgagor did not qualify taking
into account credit history and debt-to-income ratios for a lower-cost credit
product then offered by the Originator or any Affiliate of the Originator. If,
at the time of loan application, the Mortgagor may have qualified for a
lower-cost credit product then offered by any mortgage lending Affiliate of the
Originator, the Originator referred the related Mortgagor's application to such
Affiliate for underwriting consideration;
(kkk) Underwriting Methodology. The methodology used in
underwriting the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income, assets and
liabilities to the proposed payment and such underwriting methodology does not
rely on the extent of the related Mortgagor's equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the related Mortgagor had a reasonable ability to make
timely payments on the Mortgage Loan;
(lll) Mortgage Loans with Prepayment Premiums. With respect to
any Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for a
monetary benefit, including but not limited to a rate or fee reduction, (ii)
prior to the Mortgage Loan's origination, the related Mortgagor was offered the
option of obtaining a mortgage loan that did not require payment of such a
premium, (iii) the prepayment premium is disclosed to the related Mortgagor in
the Mortgage Loan documents pursuant to applicable state and federal law, and
(iv) notwithstanding any state or federal law to the contrary, the Originator,
as servicer, shall not impose such prepayment premium in any instance when the
mortgage debt is accelerated as the result of the related Mortgagor's default in
making the Mortgage Loan payments;
(mmm) Purchase of Insurance. No Mortgagor was required to
purchase any credit life, disability, accident or health insurance product as a
condition of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, unemployment, property, accident or
health insurance policy in connection with the origination of the Mortgage Loan.
No proceeds from any Mortgage Loan were used to purchase single premium credit
insurance policies as part of the origination of, or as a condition to closing,
such Mortgage Loan;
(nnn) Points and Fees. All points and fees related to each
Mortgage Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation;
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(ppp) No Arbitration. No Mortgage Loan originated on or after
July 1, 2004 requires the related Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction.
For purposes of this Schedule V, the following capitalized terms
shall have the respective meanings set forth below:
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004) "high risk home," or "predatory" loan under any other
applicable federal, state or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees) or (c) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary. For avoidance of doubt, the parties agree that
this definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review or
litigation.
For the purpose of this schedule, "Servicing Transfer Date"
means, with respect to any JPMorgan Serviced Mortgage Loan that was not
transferred on or prior to the Closing Date, November 29, 2005, or such other
date as to which servicing of such Mortgage Loan transfers from JPMorgan to
HomEq.
SCHEDULE VI
Representations and Warranties of LaSalle
-----------------------------------------
LaSalle hereby makes the representations and warranties set forth
in this Schedule VI to the Depositor, the Servicers, the Trustee and the
Responsible Party as of the Closing Date.
(a) LaSalle is duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by such Custodian in any state in
which a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(b) LaSalle has the full power and authority to execute, deliver
and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
action on the part of such Custodian the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of such
Custodian, enforceable against such Custodian in accordance with its
terms, except that (i) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by LaSalle, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof
are in the ordinary course of business of such Custodian and will not
(i) result in a material breach of any term or provision of the articles
of incorporation or by laws of such Custodian, (ii) materially conflict
with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which such Custodian is a party or by which
it may be bound, or (iii) constitute a material violation of any
statute, order or regulation applicable to such Custodian of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over such Custodian; and such Custodian is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over it which breach or violation may materially
impair such Custodian's ability to perform or meet any of its
obligations under this Agreement.
(d) No litigation is pending or threatened against LaSalle that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of such Custodian to
perform any of its obligations under this Agreement in accordance with
the terms thereof.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by LaSalle of, or compliance by such Custodian with, this
Agreement or the consummation of the transactions contemplated thereby,
or if any such consent, approval, authorization or order is required,
such Custodian has obtained the same.
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER
OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT
SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A
PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, NOR A PERSON ACTING ON
BEHALF OF ANY SUCH PLAN OR ARRANGEMENT NOR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 84-14, XXXX 00-0, XXXX 00-0, XXXX 95-60 OR PTCE 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No. : A-1-[ ]
A-2a-[ ]
A-2b-[ ]
A-2c-[ ]
M-1-[ ]
M-2- [ ]
M-3-[ ]
M-4-[ ]
M-5-[ ]
M-6-[ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
Cut-off Date : November 1, 2005
First Distribution Date : December 27, 2005
Initial Certificate Balance of this
Certificate ("Denomination") : $[ ]
Initial Certificate Balances of all : [A-1] [$335,337,000]
Certificates of this Class [A-2a] [$256,767,000]
[A-2b] [$81,000,000]
[A-2c] [$58,500,000]
[M-1] [$37,135,000]
[M-2] [$33,758,000]
[M-3] [$24,114,000]
[M-4] [$17,844,000]
[M-5] [$16,880,000]
[M-6] [$14,950,000]
[B-1] [$16,397,000]
[B-2] [$11,575,000]
[B-3] [$12,539,000]
CUSIP : [A-1] [61744C VE 3]
[A-2a] [61744C VF 0]
[A-2b] [61744C VG 8]
[A-2c] [61744C VH 6]
[M-1] [61744C VJ 2]
[M-2] [61744C VK 9]
[M-3] [61744C VL 7]
[M-4] [61744C VM 5]
[M-5] [61744C VN 3]
[M-6] [61744C VP 8]
[B-1] [61744C VQ 6]
[B-2] [61744C VR 4]
[B-3] [61744C VS 2]
ISIN : [A-1] [US61744CVE38]
[A-2a] [US61744CVF03]
[A-2b] [US61744CVG85]
[A-2c] [US61744CVH68]
[M-1] [US61744CVJ25]
[M-2] [US61744CVK97]
[M-3] [US61744CVL70]
[M-4] [US61744CVM53]
[M-5] [US61744CVN37]
[M-6] [US61744CVP84]
[B-1] [US61744CVQ67]
[B-2] [US61744CVR41]
[B-3] [US61744CVS24]
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4
Mortgage Pass-Through Certificates, Series 2005-4
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), HomEq Servicing Corporation, as a
servicer, JPMorgan Chase Bank, National Association, as a servicer, First NLC
Financial Services, LLC, as responsible party, LaSalle Bank National
Association, as custodian and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as
Trustee
By: _____________________________________________
Authenticated:
By ______________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day in New
York City, the Business Day in New York City immediately following (the
"Distribution Date"), commencing on the first Distribution Date specified on the
face hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is the Business Day immediately
preceding such Distribution Date, provided, however, that for any Definitive
Certificates, the Record Date shall be the last Business Day of the month next
preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or
the Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee nor
any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, HomEq Servicing Corporation will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _________, or, if mailed by check, to __________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR
PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON
INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT
SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,
SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : P-1
Cut-off Date : November 1, 2005
First Distribution Date : December 27, 2005
Percentage Interest of this
Certificate
("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4
Mortgage Pass-Through Certificates, Series 2005-4
Class P
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), JPMorgan Chase Bank, National
Association, as a servicer, HomEq Servicing Corporation, as a servicer, First
NLC Financial Services, LLC, as responsible party, LaSalle Bank National
Association, as custodian and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purposes, or such other location
specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and such laws. In the event of
any such transfer, the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Pooling and
Servicing Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless
the Trustee shall have received a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as
Trustee
By: _____________________________________________
Authenticated:
By ______________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day in
New York City, the Business Day in New York City immediately following (the
"Distribution Date"), commencing on the first Distribution Date specified on the
face hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is the last Business Day of the
month next preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or
the Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, HomEq Servicing Corporation will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _________, or, if mailed by check, to __________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT C
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY
ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF
ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR
LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : November 1, 2005
First Distribution Date : December 27, 2005
Percentage Interest of this : 100%
Certificate ("Denomination")
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4
Mortgage Pass-Through Certificates, Series 2005-4
Class R
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________] is the registered owner of
the Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), JPMorgan Chase Bank, National
Association, as a servicer, HomEq Servicing Corporation, as a servicer, First
NLC Financial Services, LLC, as responsible party, LaSalle Bank National
Association, as custodian, and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicers, the Depositor or the Trust Fund. In the
event that such representation is violated, or any attempt is made to transfer
to a plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement, such attempted transfer or acquisition shall be void and of no
effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as
Trustee
By: _____________________________________________
Authenticated:
By ______________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day in New
York City, the Business Day in New York City immediately following (the
"Distribution Date"), commencing on the first Distribution Date specified on the
face hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is the last Business Day of the
month next preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or
the Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee nor
any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, HomEq Servicing Corporation will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _________, or, if mailed by check, to __________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND
WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE SERVICERS TO ANY OBLIGATION
IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : November 1, 2005
First Distribution Date : December 27, 2005
Percentage Interest of this
Certificate ("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4
Mortgage Pass-Through Certificates, Series 2005-4
Class X
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), JPMorgan Chase Bank, National
Association, as a servicer, HomEq Servicing Corporation, as a servicer, First
NLC Financial Services, LLC, as responsible party, LaSalle Bank National
Association, as custodian, and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or
Pass-Through Rate and will be entitled to distributions only to the extent set
forth in the Agreement. In addition, any distribution of the proceeds of any
remaining assets of the Trust will be made only upon presentment and surrender
of this Certificate at the offices designated by the Trustee for such purposes
or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless
such disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable state securities
laws or is made in accordance with the 1933 Act and such laws. In the event of
any such transfer, the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Pooling and
Servicing Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee, which Opinion of Counsel shall
not be an expense of the Trustee, the Servicers or the Trust Fund, addressed to
the Trustee, to the effect that the purchase or holding of such Certificate will
not constitute or result in a non-exempt prohibited transaction within the
meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Depositor, the Trustee or the Servicers to any obligation in
addition to those expressly undertaken in the Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as
Trustee
By: _____________________________________________
Authenticated:
By ______________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day in
New York City, the Business Day in New York City immediately following (the
"Distribution Date"), commencing on the first Distribution Date specified on the
face hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is the last Business Day of the
month next preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or
the Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee nor
any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, HomEq Servicing Corporation will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 11.01 of the
Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
_____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _________, or, if mailed by check, to __________________________.
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.
This information is provided by_________________________________,
the assignee named above, or __________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF [CUSTODIAN] [TRUSTEE]
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC
00000 Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
First NLC Financial Services, LLC
000 Xxxx Xxxxxxxxx, Xxxxxxxx 0
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of November 1, 2005,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, JPMorgan
Chase Bank, National Association, as a Servicer, HomEq Servicing
Corporation, as a Servicer, First NLC Financial Services, LLC, as
a Responsible Party, LaSalle Bank National Association, as
Custodian, and Deutsche Bank National Trust Company, as Trustee,
and Xxxxxx Xxxxxxx Home Equity Loan Trust, Series 2005-4
----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), for each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
listed in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), except with respect to
MERS Designated Mortgage Loans.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The [Custodian] [Trustee] has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The [Custodian] [Trustee] makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the [Custodian]
[Trustee] has made no determination and makes no representations as to whether
(i) any endorsement is sufficient to transfer all right, title and interest of
the party so endorsing, as Noteholder or assignee thereof, in and to that
Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
[______________________],
as [__________]
By: _____________________________
Name:________________________
Title:_______________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION
REPORT OF [CUSTODIAN] [TRUSTEE]
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC
00000 Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
First NLC Financial Services, LLC
000 Xxxx Xxxxxxxxx, Xxxxxxxx 0
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of November 1, 2005,
among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, JPMorgan
Chase Bank, National Association, as a Servicer, HomEq Servicing
Corporation, as a Servicer, First NLC Financial Services, LLC, as
a Responsible Party, LaSalle Bank National Association, as
Custodian, and Deutsche Bank National Trust Company, as Trustee,
and Xxxxxx Xxxxxxx Home Equity Loan Trust, Series 2005-4
----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), the
undersigned, as [Custodian] [Trustee], hereby certifies that as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on the attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of endorsement from
the originator to the last endorsee.
(ii) The original recorded Mortgage.
(iii) Except with respect to MERS Designated Mortgage Loans, a
duly executed assignment of the Mortgage in the form provided in Section
2.01 of the Pooling and Servicing Agreement; or, if the Responsible
Party has certified or the [Trustee] otherwise knows that the related
Mortgage has not been returned from the applicable recording office, a
copy of the assignment of the Mortgage (excluding information to be
provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
(v) The original or duplicate original lender's title policy and
all riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1) solely with
respect to the Mortgage Loan number, (2), (7), and (9) of the Mortgage Loan
Schedule and items (1), (9) and (17) of the Data Tape Information accurately
reflects information set forth in the Custodial File.
The [Custodian] [Trustee] has made no independent examination of any
documents contained in each Mortgage File beyond the review of the Custodial
File specifically required in the Pooling and Servicing Agreement. The
[Custodian] [Trustee] makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in each Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan. Notwithstanding anything herein to the
contrary, the [Custodian] [Trustee] has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as Noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
[______________________],
as [__________]
By: _____________________________
Name:________________________
Title:_______________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Xxxxxx Xxxxxxx Home Equity Loan Trust 2005-4,
Mortgage Pass-Through Certificates,
Series 2005-4
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
(1) The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among Xxxxxx
Xxxxxxx ABS Capital I Inc., as Depositor, First NLC Financial Services, LLC, as
Responsible Party, JPMorgan Chase Bank, National Association, as a Servicer,
HomEq Servicing Corporation, as a Servicer, LaSalle Bank National Association,
as Custodian and Deutsche Bank National Trust Company, as Trustee. Capitalized
terms used, but not defined herein shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee for the benefit of the Depositor and
the Trustee.
(2) The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate for its own account. The Transferee
has no knowledge that any such affidavit is false.
(3) The Transferee has been advised of, and understands that (i)
a tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
(4) The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
(5) The Transferee has reviewed the provisions of Section 5.02(c)
of the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
(6) The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that, among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted Transferee.
(7) The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
(8) The Transferee's taxpayer identification number is
__________.
(9) The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
(10) The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
(11) The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other U.S. Person.
(12) Check the applicable paragraph:
[ ] The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable,
does not exceed the sum of:
(i) the present value of any consideration given to the
Transferee to acquire such Certificate;
(ii) the present value of the expected future distributions on
such Certificate; and
(iii) the present value of the anticipated tax savings
associated with holding such Certificate as the related
REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed
to pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S.
Treasury Regulations Sections 1.860E-1(c)(5) and (6) and,
accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Certificate will only be taxed in
the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S.
Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess
of $100 million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to
another "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), in a
transaction that satisfies the requirements of Sections
1.860E-1(c)(4)(i), (ii) and (iii) and Section
1.860E-1(c)(5) of the U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and
investment rates, prepayment and loss assumptions, expense
and reinvestment assumptions, tax rates and other factors
specific to the Transferee) that it has determined in good
faith.
[ ] None of the above.
(13) The Transferee is not an employee benefit plan that is
subject to Title I of ERISA or a plan that is subject to Section 4975 of the
Code or a plan subject to any Federal, state or local law that is substantially
similar to Title I of ERISA or Section 4975 of the Code, and the Transferee is
not acting on behalf of or investing plan assets of such a plan.
***
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___ day of ______________, 20__.
_______________________________________
Print Name of Transferee
By: ___________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named __________, known
or proved to me to be the same person who executed the foregoing instrument and
to be the ___________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ____, 20__.
_______________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Deutsche Bank National Trust Company, as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx Home Equity Loan Trust, Series 2005-4,
Mortgage Pass-Through Certificates, Series 2005-4, Class
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
_______________________________________
Print Name of Transferor
By:_____________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Deutsche National Trust Company, as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx Home Equity Loan Trust, Series 2005-4, Mortgage
Pass-Through Certificates, Series 2005-4, Class
--------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class X-0, Xxxxx X-0x,
Xxxxx X-0x, Class A-2c, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2 or Class B-3 Certificate or we are not an
employee benefit plan that is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan or arrangement that
is subject to Section 4975 of the Internal Revenue Code of 1986, as amended, or
a plan subject to materially similar provisions of applicable federal, state or
local law, nor are we acting on behalf of any such plan or arrangement nor using
the assets of any such plan or arrangement to effect such acquisition or, with
respect to a Class X Certificate, the purchaser is an insurance company that is
purchasing this certificate with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
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, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
and (f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
In connection with our purchase of the Certificates, we
acknowledge and agree that (i) none of you nor any of your affiliates is acting
as a fiduciary or financial or investment adviser for us; (ii) we are not
relying (for purposes of making any investment decision or otherwise) upon any
advice, counsel or representations (whether written or oral) of any of you or
your affiliates with respect to the Certificates; (iii) none of you nor any of
your affiliates has given to us (directly or indirectly through any other
person) any assurance, guarantee or representation whatsoever as to the expected
or projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial, accounting
or otherwise) of our purchase of the Certificates; (iv) we have performed our
own diligence to the extent we have deemed necessary and we have consulted with
our own legal, regulatory, tax, business, investment, financial and accounting
advisers to the extent that we have deemed necessary, and we have made our own
investment decisions based upon our own judgment and upon any advice from such
advisers as we have deemed necessary and appropriate and not upon any view
expressed by any of you or your affiliates with respect to the Certificates; (v)
none of you nor any of your affiliates will be obligated to make payments on the
Certificates in the event that the assets of the trust is insufficient to
provide for such payments; (vi) you and your affiliates may have positions and
may effect transactions in any of the Series 2005-4 securities; and (vii) we are
familiar with the Certificates and have reviewed and understand the related
pooling and servicing agreement, the prospectus supplement and prospectus
relating to Series 2005-4 and the other material transaction documents related
thereto.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $__________ (1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a
corporation (other than a bank, savings and
loan association or similar institution),
Massachusetts or similar business trust,
partnership, or charitable organization
described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or
banking institution organized under the
laws of any State, territory or the
District of Columbia, the business of which
is substantially confined to banking and is
supervised by the State or territorial
banking commission or similar official or
is a foreign bank or equivalent
institution, and (b) has an audited net
worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached
hereto.
____ Savings and Loan. The Buyer (a) is a
savings and loan association, building and
loan association, cooperative bank,
homestead association or similar
institution, which is supervised and
examined by a State or Federal authority
having supervision over any such
institutions or is a foreign savings and
loan association or equivalent institution
and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its
latest annual financial statements, a copy
of which is attached hereto.
____ Broker dealer. The Buyer is a dealer
registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an
insurance company whose primary and
predominant business activity is the
writing of insurance or the reinsuring of
risks underwritten by insurance companies
and which is subject to supervision by the
insurance commissioner or a similar
official or agency of a State, territory or
the District of Columbia.
____ State or Local Plan. The Buyer is a plan
established and maintained by a State, its
political subdivisions, or any agency or
instrumentality of the State or its
political subdivisions, for the benefit of
its employees.
____ ERISA Plan. The Buyer is an employee
benefit plan within the meaning of Title I
of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an
investment advisor registered under the
Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is
a small business investment company
licensed by the U.S. Small Business
Administration under Section 301(c) or (d)
of the Small Business Investment Act of
1958.
____ Business Development Company. Buyer is a
business development company as defined in
Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities,
the Buyer will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a reaffirmation
of this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
__________________________________
Print Name of Transferee
By: _____________________________
Name:
Title:
Date:____________________________
--------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
____________ The Buyer owned $ ______________in
securities (other than the excluded
securities referred to below) as of the end
of the Buyer's most recent fiscal year
(such amount being calculated in accordance
with Rule 144A).
_____________ The Buyer is part of a Family of Investment
Companies which owned in the aggregate $ in
securities (other than the excluded
securities referred to below) as of the end
of the Buyer's most recent fiscal year
(such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
_____________________________________________
Print Name of Transferee
By:__________________________________________
Name:
Title:
IF AN ADVISER:
_____________________________________________
Print Name of Buyer
Date:________________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for [Custodian] [Trustee])
To: [Trustee]
Re: In connection with the administration of the Mortgage Loans held
by you as the [Custodian] [Trustee] on behalf of the
Certificateholders, we request the release, and acknowledge
receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
-----------------------------------------------------------------
Mortgagor's Name, Address & Zip Code:
-------------------------------------
Mortgage Loan Number:
---------------------
Send Custodial File to:
-----------------------
Delivery Method (check one)
---------------------------
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby
certifies that all amounts received in connection
therewith have been credited to its Collection Account
as provided in the Pooling and Servicing Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03
of the Pooling and Servicing Agreement. (The Servicer
hereby certifies that the repurchase price has been
credited to Collection Account as provided in the
Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The
Servicer hereby certifies that all proceeds of
foreclosure, insurance, condemnation or other
liquidation have been finally received and credited to
its Collection Account pursuant to the Pooling and
Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above documents to
you as the [Custodian] [Trustee], please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
[SERVICER]
By: _________________________________________
Name:
Title:
Date:
[ACKNOWLEDGED AND AGREED:
[_______________________________],
as [__________]
By: _______________________________________________
Name:
Title:
Date: ]
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for inspection by
the Purchaser and which shall be retained by applicable Servicer or delivered to
and retained by the Trustee or Custodian, as applicable:
(i) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _____________,
without recourse" and signed in the name of the last endorsee by
an authorized officer. To the extent that there is no room on the
face of a Mortgage Note for endorsements, the endorsement may be
contained on an allonge, unless the Trustee is advised by the
Responsible Party (pursuant to the applicable Purchase Agreement)
that state law does not so allow.
(ii) The original of any guaranty executed in connection with
the Mortgage Note
(iii) The original Mortgage with evidence of recording
thereon or a certified true copy of such Mortgage submitted for
recording. If the original Mortgage cannot be delivered with
evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where
such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office
retains the original recorded Mortgage, the Responsible Party
shall deliver or cause to be delivered to the Custodian or
Trustee, as applicable, a photocopy of such Mortgage certified by
the Responsible Party to be a true and complete copy of such
Mortgage and shall forward to the Custodian or Trustee, as
applicable, such original recorded Mortgage within 14 days
following the Responsible Party's receipt of such Mortgage from
the applicable public recording office; or in the case of a
Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and
complete copy of the original recorded Mortgage.
(iv) The originals of all assumption, modification,
consolidation or extension agreements, with evidence of recording
thereon.
(v) Except with respect to each MERS Designated Mortgage
Loan, the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank.
(vi) The originals of all intervening assignments of Mortgage
(if any) evidencing a complete chain of assignment from the
applicable originator to the last endorsee with evidence of
recording thereon or a certified true copy of such intervening
assignments of Mortgage submitted for recording, or if any such
intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording
office retains the original recorded assignments of Mortgage, the
Responsible Party shall deliver or cause to be delivered a
photocopy of such intervening assignment, certified by the
Responsible Party to be a true and complete copy of such
intervening assignment and shall forward to the Custodian or
Trustee, as applicable, such original recorded intervening
assignment within 14 days following the Responsible Party's
receipt of such from the applicable public recording office; or
in the case of an intervening assignment where a public recording
office retains the original recorded intervening assignment or in
the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office
to be a true and complete copy of the original recorded
intervening assignment.
(vii) The original mortgagee title insurance policy or
attorney's opinion of title and abstract of title, or, in the
event such original title policy is unavailable, a certified true
copy of the related policy binder or commitment for title
certified to be true and complete by the title insurance company.
(viii) The original of any security agreement, chattel
mortgage or equivalent document executed in connection with the
Mortgage (if provided).
(ix) Residential loan application.
(x) Mortgage Loan closing statement.
(xi) Verification of employment and income, if applicable.
(xii) Verification of acceptable evidence of source and
amount of downpayment.
(xiii) Credit report on Mortgagor.
(xiv) Residential appraisal report.
(xv) Photograph of the Mortgaged Property.
(xvi) Survey of the Mortgaged Property.
(xvii) Copy of each instrument necessary to complete
identification of any exception set forth in the exception
schedule in the title policy, i.e., map or plat, restrictions,
easements, sewer agreements, home association declarations, etc.
(xviii) All required disclosure statements.
(xix) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(xx) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
-----------------------
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2005-4 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2005-4, issued
pursuant to the Pooling and Servicing Agreement, dated as of
November 1, 2005, among Xxxxxx Xxxxxxx ABS Capital I Inc., as
Depositor, First NLC Financial Services, LLC, as Responsible
Party, JPMorgan Chase Bank, National Association, as a Servicer,
HomEq Servicing Corporation, as a Servicer, LaSalle Bank National
Association, as Custodian, and Deutsche Bank National Trust
Company, as Trustee, Xxxxxx Xxxxxxx Home Equity Loan Trust,
Series 2005-4
-----------------------------------------------------------------
I, [identify the certifying individual], certify that:
(1) I have reviewed this annual report on Form 10-K (the "Annual
Report"), and all reports on Form 8-K containing distribution reports
(collectively with this Annual Report, the "Reports") filed in respect of
periods included in the year covered by this Annual Report, of the Trust;
(2) Based on my knowledge, the information in the Reports, taken
as a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this Annual Report;
(3) Based on my knowledge, the distribution or servicing
information required to be provided to the Trustee by each Servicer under the
Pooling and Servicing Agreement, for inclusion in the Reports is included in the
Reports;
(4) Based on my knowledge and upon the annual compliance
statement included in this Annual Report and required to be delivered to the
Trustee in accordance with the terms of the Pooling and Servicing Agreement, and
except as disclosed in the Reports, the Servicer has fulfilled its obligations
under the Pooling and Servicing Agreement; and
(5) The Reports disclose all significant deficiencies relating to
the Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar procedure, as set forth in the Pooling and Servicing Agreement, that
is included in the Reports.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee and the
Servicers.
Date: ________________________________
___________________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF TRUSTEE'S CERTIFICATION TO BE
PROVIDED TO DEPOSITOR
---------------------
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2005-4 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2005-4, issued
pursuant to the Pooling and Servicing Agreement, dated as of
November 1, 2005, among Xxxxxx Xxxxxxx ABS Capital I Inc., as
Depositor, First NLC Financial Services, LLC, as Responsible
Party, JPMorgan Chase Bank, National Association, as a Servicer,
HomEq Servicing Corporation, as a Servicer, LaSalle Bank National
Association, as Custodian, and Deutsche Bank National Trust
Company, as Trustee, Xxxxxx Xxxxxxx Home Equity Loan Trust,
Series 2005-4
-----------------------------------------------------------------
I, [identify the certifying individual], certify to the
Depositor, and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the year covered by
the Annual Report (collectively with the Annual Report, the "Reports"), of the
Trust;
(2) To my knowledge, the information in the Reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by the Annual Report; and
(3) To my knowledge, the distribution or servicing information
required to be provided to the Trustee by each Servicer under the Pooling and
Servicing Agreement for inclusion in the Reports is included in the Reports.
Date: _________________________________
_________________________________________
[Signature]
[Title]
EXHIBIT N
FORM OF CERTIFICATION TO BE PROVIDED
BY THE SERVICER TO DEPOSITOR
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2005-4 (the "Trust"),
Mortgage Pass-Through Certificates, Series 2005-4, issued
pursuant to the Pooling and Servicing Agreement, dated as of
November 1, 2005, among Xxxxxx Xxxxxxx ABS Capital I Inc., as
Depositor, First NLC Financial Services, LLC, as Responsible
Party, JPMorgan Chase Bank, National Association, as a Servicer,
HomEq Servicing Corporation, as a Servicer, LaSalle Bank National
Association, as Custodian, and Deutsche Bank National Trust
Company, as Trustee, Xxxxxx Xxxxxxx Home Equity Loan Trust,
Series 2005-4
-----------------------------------------------------------------
[JPMorgan][HomEq] certifies to the Depositor and the Trustee, and
their respective officers, directors and affiliates, and with the knowledge and
intent that they will rely upon this certification, that:
(1) Based on our knowledge, the information prepared by
[JPMorgan][HomEq] and relating to the mortgage loans serviced by
[JPMorgan][HomEq] pursuant to the Pooling and Servicing Agreement and provided
by [JPMorgan][HomEq] to the Trustee in its reports to the Trustee is accurate
and complete in all material respects as of the last day of the period covered
by such report;
(2) Based on our knowledge, the servicing information required to
be provided to the Trustee by [JPMorgan][HomEq] pursuant to the Pooling and
Servicing Agreement has been provided to the Trustee;
(3) Based upon the review required under the Pooling and
Servicing Agreement, and except as disclosed in its annual compliance statement
required to be delivered pursuant to the Pooling and Servicing Agreement,
[JPMorgan][HomEq] as of the last day of the period covered by such annual
compliance statement has fulfilled in all material respects its obligations
under the Pooling and Servicing Agreement; and
(4) [JPMorgan][HomEq] has disclosed to its independent auditor,
who issues the independent auditor's report on the Uniform Single Attestation
Program for Mortgage Bankers for [JPMorgan][HomEq], any significant deficiencies
relating to [JPMorgan's] [HomEq's] compliance with minimum servicing standards.
[JPMORGAN CHASE BANK, NATIONAL ASSOCIATION]
[HOMEQ SERVICING CORPORATION]
Dated: _________________________________
[Signature]
[Title]
EXHIBIT O
FIRST NLC PURCHASE AGREEMENT
EXECUTION COPY
==============================================================================
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
FIRST NLC FINANCIAL SERVICES, LLC,
Seller
------------------------------------------------
Dated as of September 29, 2005
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS.................................................
SECTION 2. AGREEMENT TO PURCHASE.......................................
SECTION 3. MORTGAGE SCHEDULES..........................................
SECTION 4. PURCHASE PRICE..............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES...............................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER.........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS.............................
SECTION 8. TRANSFER OF SERVICING.......................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH.........................................
SECTION 10. CLOSING.....................................................
SECTION 11. CLOSING DOCUMENTS...........................................
SECTION 12. COSTS.......................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION.................
SECTION 14. THE SELLER..................................................
SECTION 15. FINANCIAL STATEMENTS........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST..............
SECTION 17. NOTICES.....................................................
SECTION 18. SEVERABILITY CLAUSE.........................................
SECTION 19. COUNTERPARTS................................................
SECTION 20. GOVERNING LAW...............................................
SECTION 21. INTENTION OF THE PARTIES....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT....
SECTION 23. WAIVERS.....................................................
SECTION 24. EXHIBITS....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES.............................
SECTION 26. REPRODUCTION OF DOCUMENTS...................................
SECTION 27. FURTHER AGREEMENTS..........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE......................
SECTION 29. NO SOLICITATION.............................................
SECTION 30. WAIVER OF TRIAL BY JURY.....................................
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS...
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT J TRANSFER DATE MORTGAGE LOAN DATA
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES
AGREEMENT (the "Agreement"), dated as of September 1, 2005, by and between
Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation, having an office
at 0000 Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), and
First NLC Financial Services, LLC, a Florida limited liability company, having
an office at 000 Xxxx Xxxxxxxxx, Xxxxxxxx 0, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 (the
"Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of September 1, 2004,
as amended by Amendment No. 1, dated as of February 4, 2005 (the "Original
Purchase Agreement"), pursuant to which the Seller desires to sell, from time to
time, to the Purchaser, and the Purchaser desires to purchase, from time to
time, from the Seller, certain first and second lien, adjustable-rate and
fixed-rate B/C residential mortgage loans (the "Mortgage Loans") on a servicing
released basis as described therein, and which shall be delivered in pools of
whole loans (each, a "Mortgage Loan Package") on various dates as provided
therein (each, a "Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend the Original Purchase Agreement to make certain modifications as set forth
herein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
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 Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Amended and Restated Mortgage Loan Purchase and
Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
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 and Conveyance Agreement: As defined in Subsection 6.01.
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 sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which the Interim Servicer's servicing operations are located or
(iii) the state in which the Custodian's operations are located, are authorized
or obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement as Exhibit 12.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Subsection 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
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.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004) "high risk home," or "predatory" loan under any other
applicable federal, state or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees) or (c) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary. For avoidance of doubt, the parties agree that
this definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest or assigns, or any successor to the
Interim Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
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 Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity date; (12) the
first payment date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment was actually applied
to the outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, a code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (24) a code indicating the documentation style
(i.e., full, alternative or reduced); (25) asset verification (Y/N); (26) the
loan credit classification (as described in the Underwriting Guidelines); (27)
whether such Mortgage Loan provides for a Prepayment Penalty and, if applicable,
the Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a High Cost Loan; (39) a code indicating whether
the Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percentage of coverage, if applicable; (43)
Appraised Value; (44) appraisal type; (45) automated valuation model (AVM); (46)
appraisal date; and (47) with respect to the related Mortgagor, the
debt-to-income ratio. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller, who
had no interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation was not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfied the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Regulation AB: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The federal Securities Act of 1933, as amended.
Securities and Exchange Act: The federal Securities Exchange Act of
1934, as amended.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Interim Servicer under the Interim Servicing Agreement. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, to the extent permitted by this Agreement)
of such Monthly Payment collected by the Interim Servicer, or as otherwise
provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
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 Seller 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 Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller 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.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Static Pool Information: As defined in Section 13.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its
option and without notice to the Seller, purchase some or all of the Mortgage
Loans without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Interim Servicer pursuant to this Agreement to be appropriately identified
in the Seller's computer system and/or books and records, as appropriate, to
clearly reflect the sale of the related Mortgage Loan to the Purchaser. The
Seller shall cause the Interim Servicer to release from its custody the contents
of any Servicing File retained by it only in accordance with this Agreement or
the Interim Servicing Agreement, except when such release is required in
connection with a repurchase of any such Mortgage Loan pursuant to Subsection
9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Interim Servicer after
the related Cut-off Date on or in connection with a Mortgage Loan shall be
vested in the Purchaser or one or more designees of the Purchaser; provided,
however, that all funds received on or in connection with a Mortgage Loan shall
be received and held by the Seller or the Interim Servicer in trust for the
benefit of the Purchaser or the appropriate designee of the Purchaser, as the
case may be, as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
The Seller shall be or shall cause the Interim Servicer to be
responsible for maintaining, and shall maintain, a complete set of books and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Seller
shall or shall cause the Interim Servicer to maintain in its possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and periodic inspection reports, as required by the Xxxxxx Mae Guides. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller
or the Interim Servicer may be in the form of microfilm or microfiche so long as
the Seller or the Interim Servicer complies with the requirements of the Xxxxxx
Xxx Guides.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
this Agreement within two weeks of their execution, provided, however, that the
Seller shall provide the Custodian, or to such other Person as the Purchaser
shall designate in writing, with a certified true copy of any such document
submitted for recordation within two weeks of its execution, and shall promptly
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 ninety days of its submission for
recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer or any
subservicer thereof to, have an internal quality control program that verifies,
on a regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program shall
include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Interim Servicer or any
subservicer thereof. The program is to ensure that the Mortgage Loans are
originated in accordance with the Underwriting Guidelines; guard against
dishonest, fraudulent, or negligent acts; and guard against errors and omissions
by officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract servicer
of the Mortgage Loans for an interim period pursuant to and in accordance with
the terms and conditions contained in the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein). The
Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
Pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Interim
Servicer shall begin servicing the Mortgage Loans on behalf of the Purchaser and
shall be entitled to a Servicing Fee with respect to such Mortgage Loans until
the applicable Transfer Date. The Interim Servicer shall conduct such servicing
in accordance with the Interim Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Interim Servicer to cease all servicing responsibilities related to,
the related Mortgage Loans subject to such Transfer Date. The Transfer Date
shall be the date determined in accordance with Section 6.02 of the Interim
Servicing Agreement (with respect to each Mortgage Loan, for an interim period,
as specified therein).
On or prior to the applicable Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Seller shall cause the Interim
Servicer to mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall cause the Interim Servicer to provide the Purchaser with copies of all
such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall cause the Interim Servicer to transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall cause the Interim
Servicer to provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Interim Servicer to forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Interim Servicer's possession relating to
each related Mortgage Loan including the information enumerated in the Interim
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall cause the Interim Servicer to
provide the Purchaser, or its designee, with immediately available funds by wire
transfer in the amount of the net Escrow Payments and suspense balances and all
loss draft balances associated with the related Mortgage Loans. The Seller shall
cause the Interim Servicer to provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in its sole
discretion, of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall cause the
Interim Servicer to wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Interim Servicer.
(e) Payoffs and Assumptions. The Seller shall cause the Interim
Servicer to provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Interim Servicer on the related Mortgage
Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Interim Servicer or the Seller on
each related Mortgage Loan shall be properly applied by the Seller to the
account of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt.
The Seller shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment sufficient information to permit appropriate processing of the payment
by the Purchaser. The Seller shall assume full responsibility for the necessary
and appropriate legal application of such Monthly Payments received by the
Seller after the Transfer Date with respect to related Mortgage Loans then in
foreclosure or bankruptcy; provided, for purposes of this Agreement, necessary
and appropriate legal application of such Monthly Payments shall include, but
not be limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller shall
cause the Interim Servicer to comply with the foregoing requirements with
respect to all Monthly Payments received by the Interim Servicer after the
Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer
Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage in a Custodial Account or Escrow Account, the Seller shall be
liable for the amount of such shortage. The Seller shall reimburse the
Purchaser for the amount of such shortage within thirty (30) days after
receipt of written demand therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party
shorted by the improper payment application within five (5) Business Days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h) shall
be accompanied by a statement indicating the corresponding Seller and/or
the Purchaser Mortgage Loan identification number and an explanation of
the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall or shall cause the Interim Servicer
to file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall provide copies of such forms to
the Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties incurred by the Purchaser due to the Seller's failure to comply with
this paragraph.
(l) Transfer of Data. The Seller shall or shall cause the Interim
Servicer to (x) transfer to the Purchaser's designee and (y) verify the accuracy
of the data set forth on Exhibit J hereto in connection with each Mortgage Loan.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a limited
liability company, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or formation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in the states where the 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 Seller. The Seller has corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement has been duly executed and delivered
and constitutes the valid, legal, binding and enforceable obligation of the
Seller, except as enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar laws
affecting the enforcement of the rights of creditors and (ii) general principles
of equity, whether enforcement is sought in a proceeding in equity or at law.
All requisite corporate action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of Seller's knowledge, threatened against
the Seller, before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or 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 Seller,
or in any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws, including with respect to the legitimacy of
the applicable Mortgagor and the origin of the assets used by the said Mortgagor
to purchase the property in question, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and, subject to
a mutually agreeable confidentiality agreement, any later quarter ended more
than 60 days prior to the execution of this Agreement. All such financial
statements fairly present the pertinent results of operations and changes in
financial position for each of such periods and the financial position at the
end of each such period of the Seller and its subsidiaries and have been
prepared in accordance with generally accepted accounting principles of the
United States consistently applied throughout the periods involved, except as
set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Credit Reporting. The Seller, as servicer, will fully furnish,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis.
Additionally, the Seller, as servicer, will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and
that for each Mortgage Loan, the Seller, as servicer, agrees it shall report one
of the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Interim Servicing Agreement. If required by the National Flood Insurance Act
of 1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration as in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac
requirements, as well as all additional requirements set forth in Section 2.10
of the Interim Servicing Agreement. All individual insurance policies contain a
standard mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such Mortgagor's cost
and expense, and to seek reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given an opportunity
to choose the carrier of the required hazard insurance, provided the policy is
not a "master" or "blanket" hazard insurance policy covering a condominium, or
any hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. No portion of the Mortgaged Property is used for
commercial purposes, and since the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the first
mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments not yet
due and payable;
(C) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (B) which do not adversely affect the Appraised Value of
the Mortgaged Property set forth in such appraisal; and
(D) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected first lien (with respect
to a First Lien Loan) or second lien (with respect to a Second Lien Loan) and
first priority (with respect to a First Lien Loan) or second priority (with
respect to a Second Lien Loan) security interest on the property described
therein and the Seller has full right to sell and assign the same to the
Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. Subject to the lien of a warehouse lender to be
released prior to the closing of any Mortgage Loan sale, the Seller is the sole
owner of record and holder of the Mortgage Loan and the indebtedness evidenced
by each Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser,
the Seller will retain the Mortgage Files or any part thereof with respect
thereto not delivered to the Custodian, the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. The Mortgage Loan is not assigned or pledged,
and the Seller has good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in mortgage loans similar to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices
used by the Seller and the Interim Servicer with respect to the
Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been
in all respects legal and proper. With respect to escrow deposits
and Escrow Payments, all such payments are in the possession of, or
under the control of, the Seller or the Interim Servicer and there
exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow
Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and
has been established in an amount sufficient to pay for every item
that remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges or
payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been
made in strict compliance with state and federal law and the terms
of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage
Note, another index was selected for determining the Mortgage
Interest Rate, the same index was used with respect to each Mortgage
Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The
Seller or the Interim Servicer executed and delivered any and all
notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and
credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. To the best of the Seller's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. The Seller has caused to be fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and unfavorable)
on its borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis;
(ss) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Either (x) each First Lien Loan is
covered by a paid in full, life of loan, tax service contract, and such contract
is transferable, or (y) the Seller shall or shall cause its subservicer to order
and put into place such tax service contracts on or prior to the related
Transfer Date. In the event a tax service contract is not provided with respect
to each First Lien Loan prior to the related Transfer Date, the Seller shall pay
to the Purchaser on such date $75.00 per Mortgage Loan to cover the cost of such
a tax service contract.
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(iii) [Reserved];
(jjj) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Originator or any Affiliate of the Originator. If, at the
time of loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the Originator,
the Originator referred the related Mortgagor's application to such Affiliate
for underwriting consideration;
(kkk) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(lll) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Originator, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(mmm) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(nnn) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation.
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(ppp) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, 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 Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Paragraph (rr), (zz), (aaa), (bbb), (ccc), (jjj), (kkk),
(lll), (mmm), (nnn), (ooo) and (ppp) of Subsection 9.02, the Seller shall
repurchase such Mortgage Loan at the Repurchase Price. In the event that a
breach shall involve any representation or warranty set forth in Subsection
9.01, and such breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the Seller of such breach, all of the Mortgage Loans
affected by such breach shall, at the Purchaser's option, be repurchased by the
Seller at the Repurchase Price. However, if the breach shall involve a
representation or warranty set forth in Subsection 9.02 (except as provided in
the second sentence of this paragraph with respect to certain breaches for which
no substitution is permitted) and the Seller discovers or receives notice of any
such breach within 120 days of the related Closing Date, the Seller shall, at
the Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the related Closing
Date. If the Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan at the Repurchase Price. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this
Subsection 9.03 shall be accomplished by either (a) if the Interim Servicing
Agreement has been entered into and is in effect, deposit in the Custodial
Account of the amount of the Repurchase Price for distribution to the Purchaser
on the next scheduled Remittance Date, after deducting therefrom any amount
received in respect of such repurchased Mortgage Loan or Loans and being held in
the Custodial Account for future distribution or (b) if the Interim Servicing
Agreement has not been entered into or is no longer in effect, by direct
remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Interim Servicer to remit directly to the Purchaser, or its designee
in accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution. Accordingly, on the date of such substitution, the
Seller will remit to the Purchaser from its own funds an amount equal to the
amount of such shortfalls plus one month's interest thereon at the applicable
Mortgage Interest Rate minus the related Servicing Fee.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller representations and warranties contained
in this Agreement or any Reconstitution Agreement. It is understood and agreed
that the obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03 and in
Subsection 14.01 constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out
of the breach of any representations and warranties made in Subsections 9.01
and 9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such
breach by the Purchaser or notice thereof by the Seller to the Purchaser,
(ii) failure by the Seller to cure such breach or repurchase such Mortgage
Loan as specified above, and (iii) demand upon the Seller by the Purchaser
for compliance with this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. If the related Mortgagor is delinquent with respect to the Mortgage
Loan's first Monthly Payment either (i) after origination of such Mortgage Loan,
or (ii) after the related Closing Date, the Seller, at the Purchaser's option,
shall repurchase such Mortgage Loan from the Purchaser at a price equal to the
Repurchase Price. The Seller shall repurchase such delinquent Mortgage Loan
within thirty (30) days of such request.
Subsection 9.05 Premium Recapture. With respect to any Mortgage Loan
without prepayment penalties that prepays in full during the first six months
following the related Closing Date, the Seller shall pay the Purchaser, within
five (5) Business Days after such prepayment in full, an amount equal to the
excess of the Purchase Price Percentage for such Mortgage Loan over par,
multiplied by the outstanding principal balance of such Mortgage Loan as of the
related Cut-off Date. Notwithstanding the foregoing, such provision shall not
apply to Mortgage Loans containing legally enforceable prepayment penalties due
to the Purchaser but waived and not collected by the related servicer.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette, or transmit
by modem, a listing on a loan-level basis of the necessary information to
compute the Purchase Price of the Mortgage Loans delivered on such Closing
Date (including accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Interim Servicer under the Interim Servicing
Agreement (with respect to each Mortgage Loan for an interim period, as
specified therein) 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 or an Event of
Default under the Interim Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) the Interim Servicing Agreement, dated as of the
initial Cut-off Date (to be executed and delivered only for
the initial Closing Date);
(3) with respect to the initial Closing Date, the
Custodial Agreement, dated as of the initial Cut-off Date;
(4) the related Mortgage Loan Schedule (one copy to be
attached to the Custodian's counterpart of the Custodial
Agreement in connection with the initial Closing Date, and one
copy to be attached to the related Assignment and Conveyance
as the Mortgage Loan Schedule thereto);
(5) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(6) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Seller, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(7) with respect to the initial Closing Date, an Opinion
of Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit D hereto ("Opinion of Counsel
of the Seller"); with respect to subsequent Closing Dates, an
Opinion of Counsel of the Seller upon request of the
Purchaser;
(8) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(9) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(10) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by the
Seller by merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
(11) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto; and
(12) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the parties, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the parties or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit I
(collectively, the agreements referred to herein as designated, the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements..
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) to restate the
representations and warranties set forth in Subsections 9.01 and 9.02 as of the
settlement or closing date in connection with such Reconstitution (each, a
"Reconstitution Date"), such restatement to be in the form of Exhibit B to
Exhibit I hereto, or make the representations and warranties set forth in the
related selling/servicing guide of the servicer or issuer, as the case may be,
or such representations or warranties as may be required by any rating agency or
prospective purchaser of the related securities or such Mortgage Loans in
connection with such Reconstitution; (4) to deliver to Purchaser and any
prospective purchaser within three (3) days after request by Purchaser or
prospective purchaser, information, in form and substance satisfactory to
Purchaser and such prospective purchaser, with respect to each originator of the
Mortgage Loans (x) reasonably requested by the Purchaser or (y) required by Item
1110 of Regulation AB under the Securities Act and the Securities Exchange Act,
as such regulation is amended from time to time (the "Regulation AB"), which as
of the date hereof requires the following information: (a) the originator's form
of organization; and (b) a description of the originator's origination program
and how long the originator has been engaged in originating residential mortgage
loans, which description must include a discussion of the originator's
experience in originating mortgage loans of the same type as the Mortgage Loans
and information regarding the size and composition of the originator's
origination portfolio as well as information that may be material, in the good
faith judgment of the Purchaser, to an analysis of the performance of the
Mortgage Loans, such as the originators' credit-granting or underwriting
criteria for mortgage loans of the same type as the Mortgage Loans; and (5) to
deliver to the Purchaser and any prospective purchaser within 3 Business Days
after request by Purchaser, static pool information, set forth in Item 1105(a)
of Regulation AB ("Static Pool Information") with respect to those mortgage
loans that were originated by the originator of the Mortgage Loans and which are
of the same type as the Mortgage Loans, which as of the date hereof requires
Static Pool Information regarding delinquencies, cumulative losses and
prepayments by vintage origination year or prior securitized pools, as
applicable. A vintage origination year represents mortgage loans originated
during the same year. Such Static Pool Information shall be for the prior five
years or for so long as the originator has been originating (in the case of data
by vintage origination year) or securitizing (in the case of data by prior
securitized pools) such mortgage loans, if originating for less than five years.
The Static Pool Information for each vintage origination year or prior
securitized pools, as applicable, shall be presented in monthly increments over
the life of the mortgage loans included in the vintage origination year or prior
securitized pool. The Seller shall provide to such servicer or issuer, as the
case may be, and any other participants or purchasers in such Reconstitution:
(i) any and all information and appropriate verification of information which
may be reasonably available to the Seller or its affiliates, whether through
letters of its auditors and counsel or otherwise, as the Purchaser or any such
other participant shall request; (ii) such additional representations,
warranties, covenants, opinions of counsel, letters from auditors, and
certificates of public officials or officers of the Seller or the Interim
Servicer as are reasonably believed necessary by the Purchaser or any such other
participant; and (iii) to execute, deliver and satisfy all conditions set forth
in any indemnity agreement required by the Purchaser or any such participant,
including, without limitation, an Indemnification and Contribution Agreement in
substantially the form attached hereto as Exhibit B. Moreover, the Seller agrees
to cooperate with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreements. The Seller shall indemnify the Purchaser, each
affiliate of the Purchaser participating in the Reconstitution and each Person
who controls the Purchaser or such affiliate and their respective present and
former directors, officers, employees and agents, and hold each of them harmless
from and against any losses, damages, penalties, fines, forfeitures, legal fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
information provided by or on behalf of the Seller regarding the Seller, the
Seller's or other originator's Static Pool Information, the Mortgage Loans or
the Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement.
In the event the Purchaser has elected to have the Seller or the
Interim Servicer hold record title to the Mortgages, prior to the Reconstitution
Date, the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the Interim
Servicer, as applicable, acceptable to the prospective purchaser or trustee, as
applicable, for each Mortgage Loan that is part of the Reconstitution and shall
pay all preparation and recording costs associated therewith. In connection with
the Reconstitution, the Seller shall execute or shall cause the Interim Servicer
to execute each assignment of mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the prospective
purchaser or trustee, as applicable, upon the Seller's receipt thereof.
Additionally, the Seller shall prepare and execute or shall cause the Interim
Servicer to execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses (including legal fees and expenses incurred
in connection with the enforcement of the Seller's indemnification obligation
under this Subsection 14.01) and related costs, judgments, and any other costs,
fees and expenses that such parties may sustain in any way related to the
failure of the Seller to perform its duties and the Interim Servicer to service
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13 or any breach of
any of Seller's representations, warranties and covenants set forth in this
Agreement (provided that such costs shall not include any lost profits). For
purposes of this paragraph "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and all
Persons who previously were "Successor Servicers" pursuant to this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller 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 have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. The Seller hereby grants to the Purchaser a
lien on and a continuing security interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
First NLC Financial Services, LLC
000 Xxxx Xxxxxxxxx Xxxxxxxxx, Xxxxxxxx 0
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. 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 (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
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 nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. 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 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser 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 substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. In the event the Purchaser assigns this Agreement, and the
assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. 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 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. 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) 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 without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser 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 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller 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 Seller's behalf,
to personally, by telephone or mail (via electronic means or otherwise), solicit
a Mortgagor under any Mortgage Loan for the purpose of refinancing a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
Notwithstanding the foregoing, it is understood and agreed that the Seller, or
any of its respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Governing Law Jurisdiction; Consent to Service of
Process. THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
[Signature Page Follows]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By: _____________________________________
Name: ___________________________________
Title: __________________________________
FIRST NLC FINANCIAL SERVICES, LLC
(Seller)
By: _____________________________________
Name: ___________________________________
Title: __________________________________
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Amended and Restated Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Seller that
state law so allows. If the Mortgage Loan was acquired by the Seller in a
merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to
be delivered the original Mortgage with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such Mortgage has
been dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or on
direction of the Purchaser as provided in this Agreement. If the
Assignment of Mortgage is to be recorded, the Mortgage shall be assigned
to the Purchaser. If the Assignment of Mortgage is not to be recorded, the
Assignment of Mortgage shall be delivered in blank. If the Mortgage Loan
was acquired by the Seller in a merger, the Assignment of Mortgage must be
made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing
business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or
has been lost or if such public recording office retains the original
recorded assignments of mortgage, the Seller shall deliver or cause to be
delivered to the Custodian, a photocopy of such intervening assignment,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such intervening
assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian; provided, however, that any recorded document shall
in no event be delivered later than one year following the related Closing Date.
An extension of the date specified in clause (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), and [______________],
a [______________] (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party and the Depositor are parties to the
Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party [and Servicer,"] "The
Mortgage Loan Pool--Underwriting Guidelines" [and "The Servicer"] and (ii)
regarding the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties (but in the case of this clause (ii), only to the extent
any untrue statement or omission arose from or is based upon errors or omissions
in the information concerning the Mortgage Loans, the related mortgagors and/or
the related Mortgaged Properties, as applicable, provided to the Depositor or
any affiliate by or on behalf of the Indemnifying Party), as well as all static
pool information regarding mortgage loans originated or acquired by the Seller
[and included in the Prospectus Supplement or any amendment or supplement
thereto] [incorporated by reference from the Seller's website at _________].
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the Indemnifying
Party, as responsible party and servicer, and [______________].
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates.
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, among the Depositor and the Underwriter, relating to the sale
of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor and the Underwriter and their respective affiliates, and their
respective present and former directors, officers, employees, agents and each
Person, if any, that controls the Depositor, the Underwriter or such affiliate,
within the meaning of either the 1933 Act or the 1934 Act (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages, penalties,
fines, forfeitures or liabilities, joint or several, to which each such
Indemnified Party may become subject, under the 1933 Act, the 1934 Act or
otherwise, to the extent that such losses, claims, damages, penalties, fines,
forfeitures or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement, the Private Placement Memorandum or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other costs, fees, or expenses reasonably incurred and as incurred by
such Indemnified Party in connection with investigating or defending any such
loss, claim, damage, penalty, fine, forfeiture, liability or action. The
Indemnifying Party's liability under this Section 3.1 shall be in addition to
any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[--------------]
[--------------]
[--------------]
Attention:
Telephone:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[--------------]
[--------------]
[--------------]
Attention:
Telephone:
In the case of the Indemnifying Party:
[--------------]
[--------------]
[--------------]
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:
--------------------------------------
Name:
Title:
[UNDERWRITER]
By:
--------------------------------------
Name:
Title:
[INDEMNIFYING PARTY]
By:
--------------------------------------
Name:
Title:
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
(i) Attached hereto as Exhibit 1 is a true, correct and complete
copy of the charter of the Company which is in full force and effect on
the date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
(ii) Attached hereto as Exhibit 2 is a true, correct and complete
copy of the bylaws of the Company which are in effect on the date hereof
and which have been in effect without amendment, waiver, rescission or
modification since ___________.
(iii) Attached hereto as Exhibit 3 is an original certificate of
good standing of the Company issued within ten days of the date hereof,
and no event has occurred since the date thereof which would impair such
standing.
(iv) Attached hereto as Exhibit 4 is a true, correct and complete
copy of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver (a) the Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of
September 29, 2005 (the "Purchase Agreement"), by and between Xxxxxx
Xxxxxxx Mortgage Capital Inc. (the "Purchaser") and the Company, (b) the
Interim Servicing Agreement, dated as of September 1, 2004, by and between
the Seller and the Purchaser, [and to endorse the Mortgage Notes and
execute the Assignments of Mortgages by original [or facsimile]
signature], and such resolutions are in effect on the date hereof and have
been in effect without amendment, waiver, rescission or modification since
____________.
(v) Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, [the sale of the mortgage loans] or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
(vi) Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of the Purchase Agreement conflicts or
will conflict with or results or will result in a breach of or constitutes
or will constitute a default under the charter or by-laws of the Company
or, to the best of my knowledge, the terms of any indenture or other
agreement or instrument to which the Company is a party or by which it is
bound or to which it is subject, or any statute or order, rule,
regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which
it is bound.
(vii) To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Purchase Agreement, or the mortgage loans or of any action taken or to
be taken in connection with the transactions contemplated hereby, or which
would be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
(viii) Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
(ix) The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
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EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Purchaser"), dated as of September 29, 2005 (the "Purchase Agreement") and
that certain Amended and Restated Interim Servicing Agreement (the "Interim
Servicing Agreement", and collectively with the Purchase Agreement, the
"Agreements"). Capitalized terms not otherwise defined herein have the meanings
set forth in the Purchase Agreement.
[We] [I] have examined the following documents:
(i) the Purchase Agreement;
(ii) the Interim Servicing Agreement;
(iii) the form of Assignment of Mortgage;
(iv) the form of endorsement of the Mortgage Notes; and
(v) such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
(i) The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of the [United States]
and is qualified to transact business in, and is in good standing
under, the laws of [the state of incorporation].
(ii) The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power, authority
and legal right to execute and deliver the Agreements and to perform
and observe the terms and conditions of the Agreements.
(iii) The Agreements have been duly authorized, executed and
delivered by the Company, and are the legal, valid and binding
agreement enforceable in accordance with its terms against the
Company, subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and subject to the
application of the rules of equity, including those respecting the
availability of specific performance, none of which will materially
interfere with the realization of the benefits provided thereunder
or with the Purchaser's ownership of the Mortgage Loans.
(iv) The Company has been duly authorized to allow any of its
officers to execute any and all documents by original signature in
order to complete the transactions contemplated by the Agreements.
(v) The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of Mortgages,
and the original [or facsimile] signature of the officer at the
Company executing the endorsements to the Mortgage Notes and the
Assignments of Mortgages represents the legal and valid signature of
said officer of the Company.
(vi) Either (i) no consent, approval, authorization or order
of any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or compliance
by the Company with the Agreements and the sale of the Mortgage
Loans by the Company or the consummation of the transactions
contemplated by the Agreements or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
(vii) Neither the consummation of the transactions
contemplated by, nor the fulfillment of the terms of, the Agreements
conflict or will conflict with or results or will result in a breach
of or constitute or will constitute a default under the charter or
by-laws of the Company or, to the best of my knowledge, the material
terms of any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which it is
bound.
(viii) There is no action, suit, proceeding or investigation
pending or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties
or assets of the Company or in any material impairment of the right
or ability of the Company to carry on its business substantially as
now conducted or in any material liability on the part of the
Company or which would draw into question the validity of the
Agreements or the Mortgage Loans or of any action taken or to be
taken in connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company to perform under the terms of the Agreements.
(ix) The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
(x) The Mortgages have been duly assigned and the Mortgage
Notes have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon the
name of the assignee being inserted, are acceptable for recording
under the laws of the state where each related Mortgaged Property is
located. The endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage, and the
delivery of the original endorsed Mortgage Notes to the Purchaser,
or its designee, are sufficient to permit the Purchaser to avail
itself of all protection available under applicable law against the
claims of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment, pledge
or hypothecation of the Mortgages and the Mortgage Notes by the
Company from being enforceable.
Except as otherwise set forth in the Agreements, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
(the "Association")]
--------------------------
--------------------------
--------------------------
Attention:
----------------
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Amended and Restated Mortgage Loan
Purchase and Warranties Agreement. The Company warrants that the mortgage loans
to be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond
any collateral required to secure advances made by the Association to the
Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
----------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
--------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of September 29, 2005,
and certifies that all notes, mortgages, assignments and other documents in its
possession relating to such Mortgage Loans have been delivered and released to
the Company or its designees, as of the date and time of the sale of such
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. Such release shall be
effective automatically without any further action by any party upon payment in
one or more installments, in immediately available funds, of $_____________, in
accordance with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
--------------------------------
--------------------------------
--------------------------------
By:
-----------------------------
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
-----------------------------
By:
----------------------------
Title:
-------------------------
Date:
--------------------------
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
-------------------------------------------
On this ___ day of ____________, ________, _______________
("Seller"), as the Seller under (i) that certain Purchase Price and Terms
Agreement, dated as of _________, ____ (the "PPTA"), and (ii) that certain
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of September 29, 2005 (the "Purchase Agreement"), does hereby sell, transfer,
assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital, Inc.
("Purchaser") as the Purchaser under the Agreements (as defined below) without
recourse, but subject to the terms of the Agreements, all right, title and
interest of, in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Exhibit A (the "Mortgage Loans"), together with the Mortgage
Files and the related Servicing Rights and all rights and obligations arising
under the documents contained therein. Each Mortgage Loan subject to the
Agreements was underwritten in accordance with, and conforms to, the
Underwriting Guidelines attached hereto as Exhibit C. Pursuant to Section 6 of
the Purchase Agreement, the Seller has delivered to the Custodian the documents
for each Mortgage Loan to be purchased as set forth in the Purchase Agreement.
The ownership of each Mortgage Note, Mortgage and the contents of the Mortgage
File and Servicing File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Seller shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Seller at the
will of the Purchaser in a custodial capacity only. The PPTA and the Purchase
Agreement shall collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
------------------------
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
-----------------------------------
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a CLTV of greater than ____%; (4) a FICO Score of less than ___; or (5) a
debt-to-income ratio of more than ___%. Each Mortgage Loan has a Mortgage
Interest Rate of at least ___% per annum and an outstanding principal balance of
less than $______. Each Adjustable Rate Mortgage Loan has an Index of [______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT H
UNDERWRITING GUIDELINES
-----------------------
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
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:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Amended and
Restated Mortgage Loan Purchase Agreement (the "Purchase Agreement"), dated as
of September 29, 2005, between the Assignor, as purchaser (the "Purchaser"), and
the Company, as seller, solely insofar as the Purchase Agreement relates to the
Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Subsections 9.04 and 9.05 of the Purchase
Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the date hereof as if such representations and
warranties were made on the date hereof unless otherwise specifically stated in
such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. 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, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. 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.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By:
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Name:
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Its:
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XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
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Name:
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Its:
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[ ]
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By:
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Name:
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Its:
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EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties as to the Seller and the Mortgage Loans
I. Representations and Warranties Regarding the Seller
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Due Organization and Authority. The Seller is a limited
liability company, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or formation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in the states where the 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 Seller. The Seller has corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement has been duly executed and delivered
and constitutes the valid, legal, binding and enforceable obligation of the
Seller, except as enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar laws
affecting the enforcement of the rights of creditors and (ii) general principles
of equity, whether enforcement is sought in a proceeding in equity or at law.
All requisite corporate action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of Seller's knowledge, threatened against
the Seller, before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or 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 Seller,
or in any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws, including with respect to the legitimacy of
the applicable Mortgagor and the origin of the assets used by the said Mortgagor
to purchase the property in question, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A to the
Purchase Agreement, except for such documents as will be delivered to the
Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. Immediately prior to each related Closing Date,
the Seller was the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note,
and upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files with respect thereto in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Credit Reporting. As of the date on which the Seller transferred
servicing of the Mortgage Loan to the Purchaser or its designee (the "Servicing
Transfer Date") the Seller, as servicer, will fully furnish, in accordance with
the Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three of
the credit repositories), on a monthly basis. Additionally, on the Servicing
Transfer Date, the Seller, as servicer, will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and
that for each Mortgage Loan, the Seller, as servicer, agrees it shall report one
of the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
II. Representations and Warranties Regarding Individual Mortgage Loans
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. As of the Servicing Transfer Date, all
payments required to be made up to the related Closing Date for the Mortgage
Loan under the terms of the Mortgage Note, other than payments not yet 30 days
delinquent, have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under the Mortgage Loan
been 30 days or more delinquent at any time since the origination of the
Mortgage Loan. The first Monthly Payment shall be made with respect to the
Mortgage Loan on its related Due Date or within the grace period, all in
accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. As of the Servicing Transfer Date, there
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. The Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the related Due
Date of the first installment of principal and interest;
(d) Original Terms Unmodified. As of the Servicing Transfer Date,
the terms of the Mortgage Note and Mortgage have not been impaired, waived,
altered or modified in any respect, from the date of origination except by a
written instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing, and the terms of
which are reflected in the related Mortgage Loan Schedule. The substance of any
such waiver, alteration or modification has been approved by the title insurer,
if any, to the extent required by the policy, and its terms are reflected on the
related Mortgage Loan Schedule, if applicable. No Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement, approved
by the issuer of the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. As of the Servicing Transfer Date, pursuant to
the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable insurer against loss by
fire, hazards of extended coverage and such other hazards as are provided for in
the Xxxxxx Xxx Guides or by Xxxxxxx Mac, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration as in effect which policy conforms to
Xxxxxx Xxx and Xxxxxxx Mac requirements, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. As of the Servicing Transfer Date,
the Mortgage has not been satisfied, canceled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from the lien
of the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. The
Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. As of the Servicing Transfer Date , no portion of
the Mortgaged Property is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the Closing Date, subject to the lien of a
warehouse lender to be released prior to the closing of any Mortgage Loan sale,
the Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage
Loans to the Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the Purchaser or
the Purchaser's designee, in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. The Mortgage Loan is not
assigned or pledged, and the Seller has good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends to
relinquish all rights to possess, control and monitor the Mortgage Loan. After
the related Closing Date, the Seller will have no right to modify or alter the
terms of the sale of the Mortgage Loan and the Seller will have no obligation or
right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement;
(n) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. As of the Servicing Transfer Date, other than
payments due but not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(r) No Mechanics' Liens. As of the Servicing Transfer Date, there
are no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could give
rise to such liens) affecting the related Mortgaged Property which are or may be
liens prior to, or equal or coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in mortgage loans similar to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. As of the Servicing Transfer
Date, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian. The Seller is in possession
of a complete, true and accurate Mortgage File in compliance with Exhibit A to
the Purchase Agreement, except for such documents the originals of which have
been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Servicing Transfer Date, there is no proceeding pending or threatened for
the total or partial condemnation of the Mortgaged Property. The Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair. There have
not been any condemnation proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. As of the Servicing Transfer Date, the origination, servicing and
collection practices used by the Seller and the Interim Servicer with respect to
the Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of, or under the control of, the Seller
or the Interim Servicer and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Interim Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. As of the Closing Date, and
to the best of the Seller's knowledge as of the Servicing Transfer Date, there
is no pending action or proceeding directly involving the Mortgaged Property in
which compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with respect
to the Mortgage Property; and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. As of the Servicing Transfer
Date, the Mortgagor has not notified the Seller, and the Seller has no knowledge
of any relief requested or allowed to the Mortgagor under the Relief Act or
other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. As of the Servicing Transfer Date, the Seller
has caused to be fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis;
(ss) Escrow Analysis. As of the Servicing Transfer Date, if
applicable, with respect to each Mortgage, the Seller has within the last twelve
months (unless such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted the amount
of such payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior Servicing. As of the Servicing Transfer Date , each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No Default Under First Lien. As of the Servicing Transfer Date,
with respect to each Second Lien Loan, the related First Lien Loan related
thereto is in full force and effect, and there is no default, breach, violation
or event which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. As of the Servicing Transfer Date,
the Seller has not received a written notice of default of any senior mortgage
loan related to the Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) as of the Servicing Transfer Date, all ground lease rents,
other payments, or assessments that have become due have been paid; and (7) the
use of leasehold estates for residential properties is a widely accepted
practice in the jurisdiction in which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Either (x) each Mortgage Loan is covered
by a paid in full, life of loan, tax service contract, and such contract is
transferable, or (y) on the related Closing Date the Purchaser shall net $75.00
per Mortgage Loan from the related Purchase Price to cover the cost of such a
tax service contract;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. As of the Servicing Transfer Date, the
Mortgagor has not filed and will not file a bankruptcy petition or has not
become the subject and will not become the subject of involuntary bankruptcy
proceedings or has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect of
the related Mortgaged Property;
(hhh) No Prior Offer. As of the Closing Date, the Mortgage Loan has
not previously been offered for sale;
(iii) [Reserved];
(jjj) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Originator or any Affiliate of the Originator. If, at the
time of loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the Originator,
the Originator referred the related Mortgagor's application to such Affiliate
for underwriting consideration;
(kkk) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(lll) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Originator, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(mmm) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(nnn) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation;
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(ppp) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
EXHIBIT J
TRANSFER DATE MORTGAGE LOAN DATA
EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of February 4, 2005 ("Amendment"), to the
Mortgage Loan Purchase and Warranties Agreement, dated as of September 1, 2004,
(the "Purchase Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a
New York corporation ("Xxxxxx Xxxxxxx"), and FIRST NLC FINANCIAL SERVICES, LLC,
a Florida limited liability company ("First NLC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
a. Section 9.02(dd) is hereby amended by deleting the
following language:
"to the best of the Seller's knowledge,"
b. Exhibit I, Form of Assignment, Assumption and
Recognition Agreement is hereby amended by deleting
Exhibit B, Section II in its entirety and replacing it
with the language attached hereto on Exhibit 1.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
FIRST NLC FINANCIAL SERVICES, LLC
By:
--------------------------------------
Name:
Title:
EXHIBIT 1
"II. Representations and Warranties Regarding Individual Mortgage Loans
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. As of the Servicing Transfer Date, all
payments required to be made up to the related Closing Date for the Mortgage
Loan under the terms of the Mortgage Note, other than payments not yet 30 days
delinquent, have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under the Mortgage Loan
been 30 days or more delinquent at any time since the origination of the
Mortgage Loan. The first Monthly Payment shall be made with respect to the
Mortgage Loan on its related Due Date or within the grace period, all in
accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. As of the Servicing Transfer Date, there
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. The Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the related Due
Date of the first installment of principal and interest;
(d) Original Terms Unmodified. As of the Servicing Transfer Date,
the terms of the Mortgage Note and Mortgage have not been impaired, waived,
altered or modified in any respect, from the date of origination except by a
written instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing, and the terms of
which are reflected in the related Mortgage Loan Schedule. The substance of any
such waiver, alteration or modification has been approved by the title insurer,
if any, to the extent required by the policy, and its terms are reflected on the
related Mortgage Loan Schedule, if applicable. No Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement, approved
by the issuer of the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. As of the Servicing Transfer Date, pursuant to
the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable insurer against loss by
fire, hazards of extended coverage and such other hazards as are provided for in
the Xxxxxx Xxx Guides or by Xxxxxxx Mac, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration as in effect which policy conforms to
Xxxxxx Xxx and Xxxxxxx Mac requirements, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. As of the Servicing Transfer Date,
the Mortgage has not been satisfied, canceled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from the lien
of the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. The
Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. As of the Servicing Transfer Date , no portion of
the Mortgaged Property is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the Closing Date, subject to the lien of a
warehouse lender to be released prior to the closing of any Mortgage Loan sale,
the Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage
Loans to the Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the Purchaser or
the Purchaser's designee, in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. The Mortgage Loan is not
assigned or pledged, and the Seller has good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends to
relinquish all rights to possess, control and monitor the Mortgage Loan. After
the related Closing Date, the Seller will have no right to modify or alter the
terms of the sale of the Mortgage Loan and the Seller will have no obligation or
right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement;
(n) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. As of the Servicing Transfer Date, other than
payments due but not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(r) No Mechanics' Liens. As of the Servicing Transfer Date, there
are no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could give
rise to such liens) affecting the related Mortgaged Property which are or may be
liens prior to, or equal or coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in mortgage loans similar to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. As of the Servicing Transfer
Date, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian. The Seller is in possession
of a complete, true and accurate Mortgage File in compliance with Exhibit A to
the Purchase Agreement, except for such documents the originals of which have
been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Servicing Transfer Date, there is no proceeding pending or threatened for
the total or partial condemnation of the Mortgaged Property. The Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair. There have
not been any condemnation proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. As of the Servicing Transfer Date, the origination, servicing and
collection practices used by the Seller and the Interim Servicer with respect to
the Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of, or under the control of, the Seller
or the Interim Servicer and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Interim Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. As of the Closing Date, and
to the best of the Seller's knowledge as of the Servicing Transfer Date, there
is no pending action or proceeding directly involving the Mortgaged Property in
which compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with respect
to the Mortgage Property; and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. As of the Servicing Transfer
Date, the Mortgagor has not notified the Seller, and the Seller has no knowledge
of any relief requested or allowed to the Mortgagor under the Relief Act or
other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. As of the Servicing Transfer Date, the Seller
has caused to be fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis;
(ss) Escrow Analysis. As of the Servicing Transfer Date, if
applicable, with respect to each Mortgage, the Seller has within the last twelve
months (unless such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted the amount
of such payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior Servicing. As of the Servicing Transfer Date , each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No Default Under First Lien. As of the Servicing Transfer Date,
with respect to each Second Lien Loan, the related First Lien Loan related
thereto is in full force and effect, and there is no default, breach, violation
or event which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. As of the Servicing Transfer Date,
the Seller has not received a written notice of default of any senior mortgage
loan related to the Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) as of the Servicing Transfer Date, all ground lease rents,
other payments, or assessments that have become due have been paid; and (7) the
use of leasehold estates for residential properties is a widely accepted
practice in the jurisdiction in which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Either (x) each Mortgage Loan is covered
by a paid in full, life of loan, tax service contract, and such contract is
transferable, or (y) on the related Closing Date the Purchaser shall net $75.00
per Mortgage Loan from the related Purchase Price to cover the cost of such a
tax service contract;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. As of the Servicing Transfer Date, the
Mortgagor has not filed and will not file a bankruptcy petition or has not
become the subject and will not become the subject of involuntary bankruptcy
proceedings or has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect of
the related Mortgaged Property;
(hhh) No Prior Offer. As of the Closing Date, the Mortgage Loan has
not previously been offered for sale;
(iii) [Reserved];
(jjj) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Originator or any Affiliate of the Originator. If, at the
time of loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the Originator,
the Originator referred the related Mortgagor's application to such Affiliate
for underwriting consideration;
(kkk) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(lll) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Originator, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(mmm) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(nnn) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation;
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(ppp) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
EXECUTION COPY
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MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
FIRST NLC FINANCIAL SERVICES, LLC,
Seller
------------------------------------------------
Dated as of September 1, 2004
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.................................................
SECTION 2. AGREEMENT TO PURCHASE.......................................
SECTION 3. MORTGAGE SCHEDULES..........................................
SECTION 4. PURCHASE PRICE..............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES...............................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER.........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS.............................
SECTION 8. TRANSFER OF SERVICING.......................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH.........................................
SECTION 10. CLOSING.....................................................
SECTION 11. CLOSING DOCUMENTS...........................................
SECTION 12. COSTS.......................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION.................
SECTION 14. THE SELLER..................................................
SECTION 15. FINANCIAL STATEMENTS........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST..............
SECTION 17. NOTICES.....................................................
SECTION 18. SEVERABILITY CLAUSE.........................................
SECTION 19. COUNTERPARTS................................................
SECTION 20. GOVERNING LAW...............................................
SECTION 21. INTENTION OF THE PARTIES....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT....
SECTION 23. WAIVERS.....................................................
SECTION 24. EXHIBITS....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES.............................
SECTION 26. REPRODUCTION OF DOCUMENTS...................................
SECTION 27. FURTHER AGREEMENTS..........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE......................
SECTION 29. NO SOLICITATION.............................................
SECTION 30. WAIVER OF TRIAL BY JURY.....................................
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS...
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT J TRANSFER DATE MORTGAGE LOAN DATA
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of September 1, 2004, by and between Xxxxxx Xxxxxxx
Mortgage Capital Inc., a New York corporation, having an office at 1221 Avenue
of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), and
First NLC Financial Services, LLC, a Florida limited liability company, having
an office at 000 Xxxx Xxxxxxxxx, Xxxxxxxx 0, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 (the
"Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain first and second lien, adjustable-rate and fixed-rate B/C
residential mortgage loans (the "Mortgage Loans") on a servicing released basis
as described herein, and which shall be delivered in pools of whole loans (each,
a "Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing by the Interim Servicer and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
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 Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
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 and Conveyance Agreement: As defined in Subsection 6.01.
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 sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which the Interim Servicer's servicing operations are located or
(iii) the state in which the Custodian's operations are located, are authorized
or obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement as Exhibit 11.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Subsection 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
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.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004) "high risk home," or "predatory" loan under any other
applicable federal, state or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees) or (c) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary. For avoidance of doubt, the parties agree that
this definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest or assigns, or any successor to the
Interim Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
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 Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity date; (12) the
first payment date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment was actually applied
to the outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, a code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (24) a code indicating the documentation style
(i.e., full, alternative or reduced); (25) asset verification (Y/N); (26) the
loan credit classification (as described in the Underwriting Guidelines); (27)
whether such Mortgage Loan provides for a Prepayment Penalty and, if applicable,
the Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a High Cost Loan; (39) a code indicating whether
the Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percentage of coverage, if applicable; (43)
Appraised Value; (44) appraisal type; (45) automated valuation model (AVM); (46)
appraisal date; and (47) with respect to the related Mortgagor, the
debt-to-income ratio. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note. Officer's Certificate: A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or a President or a Vice President and by the Treasurer or the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the Seller, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller, who
had no interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation was not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfied the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Interim Servicer under the Interim Servicing Agreement. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, to the extent permitted by this Agreement)
of such Monthly Payment collected by the Interim Servicer, or as otherwise
provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
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 Seller 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 Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller 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.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its
option and without notice to the Seller, purchase some or all of the Mortgage
Loans without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Interim Servicer pursuant to this Agreement to be appropriately identified
in the Seller's computer system and/or books and records, as appropriate, to
clearly reflect the sale of the related Mortgage Loan to the Purchaser. The
Seller shall cause the Interim Servicer to release from its custody the contents
of any Servicing File retained by it only in accordance with this Agreement or
the Interim Servicing Agreement, except when such release is required in
connection with a repurchase of any such Mortgage Loan pursuant to Subsection
9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Interim Servicer after
the related Cut-off Date on or in connection with a Mortgage Loan shall be
vested in the Purchaser or one or more designees of the Purchaser; provided,
however, that all funds received on or in connection with a Mortgage Loan shall
be received and held by the Seller or the Interim Servicer in trust for the
benefit of the Purchaser or the appropriate designee of the Purchaser, as the
case may be, as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
The Seller shall be or shall cause the Interim Servicer to be
responsible for maintaining, and shall maintain, a complete set of books and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Seller
shall or shall cause the Interim Servicer to maintain in its possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and periodic inspection reports, as required by the Xxxxxx Mae Guides. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller
or the Interim Servicer may be in the form of microfilm or microfiche so long as
the Seller or the Interim Servicer complies with the requirements of the Xxxxxx
Xxx Guides.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
this Agreement within two weeks of their execution, provided, however, that the
Seller shall provide the Custodian, or to such other Person as the Purchaser
shall designate in writing, with a certified true copy of any such document
submitted for recordation within two weeks of its execution, and shall promptly
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 ninety days of its submission for
recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer or any
subservicer thereof to, have an internal quality control program that verifies,
on a regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program shall
include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Interim Servicer or any
subservicer thereof. The program is to ensure that the Mortgage Loans are
originated in accordance with the Underwriting Guidelines; guard against
dishonest, fraudulent, or negligent acts; and guard against errors and omissions
by officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract servicer
of the Mortgage Loans for an interim period pursuant to and in accordance with
the terms and conditions contained in the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein). The
Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
Pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Interim
Servicer shall begin servicing the Mortgage Loans on behalf of the Purchaser and
shall be entitled to a Servicing Fee with respect to such Mortgage Loans until
the applicable Transfer Date. The Interim Servicer shall conduct such servicing
in accordance with the Interim Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Interim Servicer to cease all servicing responsibilities related to,
the related Mortgage Loans subject to such Transfer Date. The Transfer Date
shall be the date determined in accordance with Section 6.02 of the Interim
Servicing Agreement (with respect to each Mortgage Loan, for an interim period,
as specified therein).
On or prior to the applicable Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Seller shall cause the Interim
Servicer to mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall cause the Interim Servicer to provide the Purchaser with copies of all
such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall cause the Interim Servicer to transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall cause the Interim
Servicer to provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Interim Servicer to forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Interim Servicer's possession relating to
each related Mortgage Loan including the information enumerated in the Interim
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall cause the Interim Servicer to
provide the Purchaser, or its designee, with immediately available funds by wire
transfer in the amount of the net Escrow Payments and suspense balances and all
loss draft balances associated with the related Mortgage Loans. The Seller shall
cause the Interim Servicer to provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in its sole
discretion, of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall cause the
Interim Servicer to wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Interim Servicer.
(e) Payoffs and Assumptions. The Seller shall cause the Interim
Servicer to provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Interim Servicer on the related Mortgage
Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Interim Servicer or the Seller on
each related Mortgage Loan shall be properly applied by the Seller to the
account of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt.
The Seller shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment sufficient information to permit appropriate processing of the payment
by the Purchaser. The Seller shall assume full responsibility for the necessary
and appropriate legal application of such Monthly Payments received by the
Seller after the Transfer Date with respect to related Mortgage Loans then in
foreclosure or bankruptcy; provided, for purposes of this Agreement, necessary
and appropriate legal application of such Monthly Payments shall include, but
not be limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller shall
cause the Interim Servicer to comply with the foregoing requirements with
respect to all Monthly Payments received by the Interim Servicer after the
Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer
Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage in a Custodial Account or Escrow Account, the Seller shall be
liable for the amount of such shortage. The Seller shall reimburse the
Purchaser for the amount of such shortage within thirty (30) days after
receipt of written demand therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party
shorted by the improper payment application within five (5) Business Days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h) shall
be accompanied by a statement indicating the corresponding Seller and/or
the Purchaser Mortgage Loan identification number and an explanation of
the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall or shall cause the Interim Servicer
to file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall provide copies of such forms to
the Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties incurred by the Purchaser due to the Seller's failure to comply with
this paragraph.
(l) Transfer of Data. The Seller shall or shall cause the Interim
Servicer to (x) transfer to the Purchaser's designee and (y) verify the accuracy
of the data set forth on Exhibit J hereto in connection with each Mortgage Loan.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a limited
liability company, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or formation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in the states where the 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 Seller. The Seller has corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement has been duly executed and delivered
and constitutes the valid, legal, binding and enforceable obligation of the
Seller, except as enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar laws
affecting the enforcement of the rights of creditors and (ii) general principles
of equity, whether enforcement is sought in a proceeding in equity or at law.
All requisite corporate action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of Seller's knowledge, threatened against
the Seller, before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or 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 Seller,
or in any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws, including with respect to the legitimacy of
the applicable Mortgagor and the origin of the assets used by the said Mortgagor
to purchase the property in question, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and, subject to
a mutually agreeable confidentiality agreement, any later quarter ended more
than 60 days prior to the execution of this Agreement. All such financial
statements fairly present the pertinent results of operations and changes in
financial position for each of such periods and the financial position at the
end of each such period of the Seller and its subsidiaries and have been
prepared in accordance with generally accepted accounting principles of the
United States consistently applied throughout the periods involved, except as
set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Credit Reporting. The Seller, as servicer, will fully furnish,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis.
Additionally, the Seller, as servicer, will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and
that for each Mortgage Loan, the Seller, as servicer, agrees it shall report one
of the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Interim Servicing Agreement. If required by the National Flood Insurance Act
of 1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration as in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac
requirements, as well as all additional requirements set forth in Section 2.10
of the Interim Servicing Agreement. All individual insurance policies contain a
standard mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such Mortgagor's cost
and expense, and to seek reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given an opportunity
to choose the carrier of the required hazard insurance, provided the policy is
not a "master" or "blanket" hazard insurance policy covering a condominium, or
any hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. No portion of the Mortgaged Property is used for
commercial purposes, and since the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the first
mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments not yet
due and payable;
(C) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (B) which do not adversely affect the Appraised Value of
the Mortgaged Property set forth in such appraisal; and
(D) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. Subject to the lien of a warehouse lender to be
released prior to the closing of any Mortgage Loan sale, the Seller is the sole
owner of record and holder of the Mortgage Loan and the indebtedness evidenced
by each Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser,
the Seller will retain the Mortgage Files or any part thereof with respect
thereto not delivered to the Custodian, the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. The Mortgage Loan is not assigned or pledged,
and the Seller has good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in mortgage loans similar to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Interim Servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Interim Servicer and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Interim Servicer executed and delivered any and
all notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. To the best of the Seller's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. The Seller has caused to be fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and unfavorable)
on its borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis;
(ss) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Either (x) each First Lien Loan is
covered by a paid in full, life of loan, tax service contract, and such contract
is transferable, or (y) the Seller shall or shall cause its subservicer to order
and put into place such tax service contracts on or prior to the related
Transfer Date. In the event a tax service contract is not provided with respect
to each First Lien Loan prior to the related Transfer Date, the Seller shall pay
to the Purchaser on such date $75.00 per Mortgage Loan to cover the cost of such
a tax service contract.
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(iii) [Reserved];
(jjj) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Originator or any Affiliate of the Originator. If, at the
time of loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the Originator,
the Originator referred the related Mortgagor's application to such Affiliate
for underwriting consideration;
(kkk) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(lll) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Originator, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(mmm) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(nnn) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation.
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(ppp) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, 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 Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Paragraph (rr), (zz), (aaa), (bbb), (ccc), (jjj), (kkk),
(lll), (mmm), (nnn), (ooo) and (ppp) of Subsection 9.02, the Seller shall
repurchase such Mortgage Loan at the Repurchase Price. In the event that a
breach shall involve any representation or warranty set forth in Subsection
9.01, and such breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the Seller of such breach, all of the Mortgage Loans
affected by such breach shall, at the Purchaser's option, be repurchased by the
Seller at the Repurchase Price. However, if the breach shall involve a
representation or warranty set forth in Subsection 9.02 (except as provided in
the second sentence of this paragraph with respect to certain breaches for which
no substitution is permitted) and the Seller discovers or receives notice of any
such breach within 120 days of the related Closing Date, the Seller shall, at
the Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the related Closing
Date. If the Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan at the Repurchase Price. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this
Subsection 9.03 shall be accomplished by either (a) if the Interim Servicing
Agreement has been entered into and is in effect, deposit in the Custodial
Account of the amount of the Repurchase Price for distribution to the Purchaser
on the next scheduled Remittance Date, after deducting therefrom any amount
received in respect of such repurchased Mortgage Loan or Loans and being held in
the Custodial Account for future distribution or (b) if the Interim Servicing
Agreement has not been entered into or is no longer in effect, by direct
remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Interim Servicer to remit directly to the Purchaser, or its designee
in accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller representations and warranties contained
in this Agreement or any Reconstitution Agreement. It is understood and agreed
that the obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03 and in
Subsection 14.01 constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. If the related Mortgagor is delinquent with respect to the Mortgage
Loan's first Monthly Payment either (i) after origination of such Mortgage Loan,
or (ii) after the related Closing Date, the Seller, at the Purchaser's option,
shall repurchase such Mortgage Loan from the Purchaser at a price equal to the
Repurchase Price. The Seller shall repurchase such delinquent Mortgage Loan
within thirty (30) days of such request.
Subsection 9.05 Premium Recapture. With respect to any Mortgage Loan
without prepayment penalties that prepays in full during the first six months
following the related Closing Date, the Seller shall pay the Purchaser, within
five (5) Business Days after such prepayment in full, an amount equal to the
excess of the Purchase Price Percentage for such Mortgage Loan over par,
multiplied by the outstanding principal balance of such Mortgage Loan as of the
related Cut-off Date. Notwithstanding the foregoing, such provision shall not
apply to Mortgage Loans containing legally enforceable prepayment penalties due
to the Purchaser but waived and not collected by the related servicer.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette, or transmit
by modem, a listing on a loan-level basis of the necessary information to
compute the Purchase Price of the Mortgage Loans delivered on such Closing
Date (including accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Interim Servicer under the Interim Servicing
Agreement (with respect to each Mortgage Loan for an interim period, as
specified therein) 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 or an Event of
Default under the Interim Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) the Interim Servicing Agreement, dated as of the
initial Cut-off Date (to be executed and delivered only for
the initial Closing Date);
(3) with respect to the initial Closing Date, the
Custodial Agreement, dated as of the initial Cut-off Date;
(4) the related Mortgage Loan Schedule (one copy to be
attached to the Custodian's counterpart of the Custodial
Agreement in connection with the initial Closing Date, and one
copy to be attached to the related Assignment and Conveyance
as the Mortgage Loan Schedule thereto);
(5) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(6) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Seller, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(7) with respect to the initial Closing Date, an Opinion
of Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit D hereto ("Opinion of Counsel
of the Seller"); with respect to subsequent Closing Dates, an
Opinion of Counsel of the Seller upon request of the
Purchaser;
(8) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(9) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(10) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by the
Seller by merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
(11) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto; and
(12) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the parties, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the parties or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit I
(collectively, the agreements referred to herein as designated, the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements..
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; and (3) to restate the
representations and warranties set forth in Subsections 9.01 and 9.02 as of the
settlement or closing date in connection with such Reconstitution (each, a
"Reconstitution Date"), such restatement to be in the form of Exhibit B to
Exhibit I hereto, or make the representations and warranties set forth in the
related selling/servicing guide of the servicer or issuer, as the case may be,
or such representations or warranties as may be required by any rating agency or
prospective purchaser of the related securities or such Mortgage Loans in
connection with such Reconstitution. The Seller shall provide to such servicer
or issuer, as the case may be, and any other participants or purchasers in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller or the
Interim Servicer as are reasonably believed necessary by the Purchaser or any
such other participant; and (iii) to execute, deliver and satisfy all conditions
set forth in any indemnity agreement required by the Purchaser or any such
participant, including, without limitation, an Indemnification and Contribution
Agreement in substantially the form attached hereto as Exhibit B. Moreover, the
Seller agrees to cooperate with all reasonable requests made by the Purchaser to
effect such Reconstitution Agreements. The Seller shall indemnify the Purchaser,
each affiliate of the Purchaser participating in the Reconstitution and each
Person who controls the Purchaser or such affiliate and their respective present
and former directors, officers, employees and agents, and hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that each of them may sustain arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
information provided by or on behalf of the Seller regarding the Seller, the
Mortgage Loans or the Underwriting Guidelines set forth in any offering document
prepared in connection with any Reconstitution. For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement.
In the event the Purchaser has elected to have the Seller or the
Interim Servicer hold record title to the Mortgages, prior to the Reconstitution
Date, the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the Interim
Servicer, as applicable, acceptable to the prospective purchaser or trustee, as
applicable, for each Mortgage Loan that is part of the Reconstitution and shall
pay all preparation and recording costs associated therewith. In connection with
the Reconstitution, the Seller shall execute or shall cause the Interim Servicer
to execute each assignment of mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the prospective
purchaser or trustee, as applicable, upon the Seller's receipt thereof.
Additionally, the Seller shall prepare and execute or shall cause the Interim
Servicer to execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses (including legal fees and expenses incurred
in connection with the enforcement of the Seller's indemnification obligation
under this Subsection 14.01) and related costs, judgments, and any other costs,
fees and expenses that such parties may sustain in any way related to the
failure of the Seller to perform its duties and the Interim Servicer to service
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13 or any breach of
any of Seller's representations, warranties and covenants set forth in this
Agreement (provided that such costs shall not include any lost profits). For
purposes of this paragraph "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and all
Persons who previously were "Successor Servicers" pursuant to this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller 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 have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. The Seller hereby grants to the Purchaser a
lien on and a continuing security interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
First NLC Financial Services, LLC
000 Xxxx Xxxxxxxxx Xxxxxxxxx, Xxxxxxxx 0
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. 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 (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
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 nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. 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 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser 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 substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. In the event the Purchaser assigns this Agreement, and the
assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. 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 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. 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) 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 without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser 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 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller 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 Seller's behalf,
to personally, by telephone or mail (via electronic means or otherwise), solicit
a Mortgagor under any Mortgage Loan for the purpose of refinancing a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
Notwithstanding the foregoing, it is understood and agreed that the Seller, or
any of its respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Governing Law Jurisdiction; Consent to Service of
Process. THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
[Signature Page Follows]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
FIRST NLC FINANCIAL SERVICES, LLC
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Seller that
state law so allows. If the Mortgage Loan was acquired by the Seller in a
merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to
be delivered the original Mortgage with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such Mortgage has
been dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or on
direction of the Purchaser as provided in this Agreement. If the
Assignment of Mortgage is to be recorded, the Mortgage shall be assigned
to the Purchaser. If the Assignment of Mortgage is not to be recorded, the
Assignment of Mortgage shall be delivered in blank. If the Mortgage Loan
was acquired by the Seller in a merger, the Assignment of Mortgage must be
made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing
business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or
has been lost or if such public recording office retains the original
recorded assignments of mortgage, the Seller shall deliver or cause to be
delivered to the Custodian, a photocopy of such intervening assignment,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such intervening
assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian; provided, however, that any recorded document shall
in no event be delivered later than one year following the related Closing Date.
An extension of the date specified in clause (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), and [______________],
a [______________] (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party and the Depositor are parties to the
Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party [and Servicer,"] "The
Mortgage Loan Pool--Underwriting Guidelines" [and "The Servicer"] and (ii)
regarding the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties (but in the case of this clause (ii), only to the extent
any untrue statement or omission arose from or is based upon errors or omissions
in the information concerning the Mortgage Loans, the related mortgagors and/or
the related Mortgaged Properties, as applicable, provided to the Depositor or
any affiliate by or on behalf of the Indemnifying Party).
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the Indemnifying
Party, as responsible party and servicer, and [______________].
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates.
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, among the Depositor and the Underwriter, relating to the sale
of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor and the Underwriter and their respective affiliates, and their
respective present and former directors, officers, employees, agents and each
Person, if any, that controls the Depositor, the Underwriter or such affiliate,
within the meaning of either the 1933 Act or the 1934 Act (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages, penalties,
fines, forfeitures or liabilities, joint or several, to which each such
Indemnified Party may become subject, under the 1933 Act, the 1934 Act or
otherwise, to the extent that such losses, claims, damages, penalties, fines,
forfeitures or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement, the Private Placement Memorandum or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other costs, fees, or expenses reasonably incurred and as incurred by
such Indemnified Party in connection with investigating or defending any such
loss, claim, damage, penalty, fine, forfeiture, liability or action. The
Indemnifying Party's liability under this Section 3.1 shall be in addition to
any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
Telephone:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
Telephone:
In the case of the Indemnifying Party:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:____________________________________
Name:
Title:
[UNDERWRITER]
By:____________________________________
Name:
Title:
[INDEMNIFYING PARTY]
By:____________________________________
Name:
Title:
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
(i) Attached hereto as Exhibit 1 is a true, correct and
complete copy of the charter of the Company which is in full force
and effect on the date hereof and which has been in effect without
amendment, waiver, rescission or modification since ___________.
(ii) Attached hereto as Exhibit 2 is a true, correct and
complete copy of the bylaws of the Company which are in effect on
the date hereof and which have been in effect without amendment,
waiver, rescission or modification since ___________.
(iii) Attached hereto as Exhibit 3 is an original certificate
of good standing of the Company issued within ten days of the date
hereof, and no event has occurred since the date thereof which would
impair such standing.
(iv) Attached hereto as Exhibit 4 is a true, correct and
complete copy of the corporate resolutions of the Board of Directors
of the Company authorizing the Company to execute and deliver (a)
the Mortgage Loan Purchase and Warranties Agreement, dated as of
September 1, 2004 (the "Purchase Agreement"), by and between Xxxxxx
Xxxxxxx Mortgage Capital Inc. (the "Purchaser") and the Company, (b)
the Interim Servicing Agreement, dated as of September 1, 2004, by
and between the Seller and the Purchaser, (c) the Custodial
Agreement, dated as of September 1, 2004 (the "Custodial
Agreement"), by and among the Purchaser, the Company, and
[CUSTODIAN] (the "Custodian"), [and to endorse the Mortgage Notes
and execute the Assignments of Mortgages by original [or facsimile]
signature], and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or
modification since ____________.
(v) Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or compliance
by the Company with the Purchase Agreement, [the sale of the
mortgage loans] or the consummation of the transactions contemplated
by the agreements; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
(vi) Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Purchase Agreement
conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the
charter or by-laws of the Company or, to the best of my knowledge,
the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which it is
subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which it is
bound.
(vii) To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the
Company which, in my judgment, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of
the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted
or in any material liability on the part of the Company or which
would draw into question the validity of the Purchase Agreement, or
the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would
be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
(viii) Each person listed on Exhibit 5 attached hereto who, as
an officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date
hereof in connection with any purchase described in the agreements
set forth above was, at the respective times of such signing and
delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the
office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their
genuine signatures.
(ix) The Company is duly authorized to engage in the
transactions described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser"), dated as of
September 1, 2004 (the "Purchase Agreement") which sale is in the form of whole
loans, delivered pursuant to a Custodial Agreement dated as of September 1,
2004, among the Purchaser, the Company, and ______________________[CUSTODIAN]
(the "Custodial Agreement", and collectively with the Purchase Agreement and the
Interim Servicing Agreement, the "Agreements"). Capitalized terms not otherwise
defined herein have the meanings set forth in the Purchase Agreement.
[We] [I] have examined the following documents:
(i) the Purchase Agreement;
(ii) the Interim Servicing Agreement;
(iii) the Custodial Agreement;
(iv) the form of Assignment of Mortgage;
(v) the form of endorsement of the Mortgage Notes; and
(vi) such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
(i) The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of the [United
States] and is qualified to transact business in, and is in
good standing under, the laws of [the state of incorporation].
(ii) The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver the
Agreements and to perform and observe the terms and conditions
of the Agreements.
(iii) The Agreements have been duly authorized, executed and
delivered by the Company, and are the legal, valid and binding
agreement enforceable in accordance with its terms against the
Company, subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and subject
to the application of the rules of equity, including those
respecting the availability of specific performance, none of
which will materially interfere with the realization of the
benefits provided thereunder or with the Purchaser's ownership
of the Mortgage Loans.
(iv) The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
(v) The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
(vi) Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
(vii) Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflict
or will conflict with or results or will result in a breach of
or constitute or will constitute a default under the charter
or by-laws of the Company or, to the best of my knowledge, the
material terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is
bound or to which it is subject, or violates any statute or
order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the
Company is subject or by which it is bound.
(viii) There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements or the
Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company to perform under the terms of the Agreements.
(ix) The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
(x) The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
Except as otherwise set forth in the Agreements, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
---------------------------
---------------------------
---------------------------
Attention:
---------------------------
---------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Mortgage Loan Purchase and
Warranties Agreement. The Company warrants that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
----------------------------
By:
--------------------------
Name:
------------------------
Title:
------------------------
Date:
-------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
------------------------------
By:
--------------------------
Name:
------------------------
Title:
------------------------
Date:
-------------------------
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Mortgage Loan Purchase
and Warranties Agreement, dated as of September 1, 2004, and certifies that all
notes, mortgages, assignments and other documents in its possession relating to
such Mortgage Loans have been delivered and released to the Company or its
designees, as of the date and time of the sale of such Mortgage Loans to Xxxxxx
Xxxxxxx Mortgage Capital Inc. Such release shall be effective automatically
without any further action by any party upon payment in one or more
installments, in immediately available funds, of $_____________, in accordance
with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
--------------------------------
--------------------------------
--------------------------------
By:
-----------------------------
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
-----------------------------
By:
-----------------------------
Title:
--------------------------
Date:
---------------------------
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of ____________, ________, _______________
("Seller"), as the Seller under (i) that certain Purchase Price and Terms
Agreement, dated as of _________, ____ (the "PPTA"), and (ii) that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of September 1, 2004
(the "Purchase Agreement"), does hereby sell, transfer, assign, set over and
convey to Xxxxxx Xxxxxxx Mortgage Capital, Inc. ("Purchaser") as the Purchaser
under the Agreements (as defined below) without recourse, but subject to the
terms of the Agreements, all right, title and interest of, in and to the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as Exhibit A
(the "Mortgage Loans"), together with the Mortgage Files and the related
Servicing Rights and all rights and obligations arising under the documents
contained therein. Each Mortgage Loan subject to the Agreements was underwritten
in accordance with, and conforms to, the Underwriting Guidelines attached hereto
as Exhibit C. Pursuant to Section 6 of the Purchase Agreement, the Seller has
delivered to the Custodian the documents for each Mortgage Loan to be purchased
as set forth in the Purchase Agreement. The ownership of each Mortgage Note,
Mortgage and the contents of the Mortgage File and Servicing File is vested in
the Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Seller shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Seller at the will of the Purchaser in a custodial
capacity only. The PPTA and the Purchase Agreement shall collectively be
referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
------------------------
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
---------------------------------
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a CLTV of greater than ____%; (4) a FICO Score of less than ___; or (5) a
debt-to-income ratio of more than ___%. Each Mortgage Loan has a Mortgage
Interest Rate of at least ___% per annum and an outstanding principal balance of
less than $______. Each Adjustable Rate Mortgage Loan has an Index of [______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT H
UNDERWRITING GUIDELINES
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
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:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase Agreement (the "Purchase Agreement"), dated as of September 1, 2004,
between the Assignor, as purchaser (the "Purchaser"), and the Company, as
seller, solely insofar as the Purchase Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Subsections 9.04 and 9.05 of the Purchase
Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the date hereof as if such representations and
warranties were made on the date hereof unless otherwise specifically stated in
such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. 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, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. 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.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By:
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Name:
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Its:
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XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
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Name:
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Its:
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[ ]
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By:
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Name:
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Its:
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EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties as to the Seller and the Mortgage Loans
I. Representations and Warranties Regarding the Seller
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Due Organization and Authority. The Seller is a limited
liability company, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or formation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in the states where the 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 Seller. The Seller has corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement has been duly executed and delivered
and constitutes the valid, legal, binding and enforceable obligation of the
Seller, except as enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar laws
affecting the enforcement of the rights of creditors and (ii) general principles
of equity, whether enforcement is sought in a proceeding in equity or at law.
All requisite corporate action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of Seller's knowledge, threatened against
the Seller, before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or 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 Seller,
or in any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws, including with respect to the legitimacy of
the applicable Mortgagor and the origin of the assets used by the said Mortgagor
to purchase the property in question, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A to the
Purchase Agreement, except for such documents as will be delivered to the
Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. Immediately prior to each related Closing Date,
the Seller was the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note,
and upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files with respect thereto in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Credit Reporting. As of the date on which the Seller transferred
servicing of the Mortgage Loan to the Purchaser or its designee (the "Servicing
Transfer Date") the Seller, as servicer, will fully furnish, in accordance with
the Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three of
the credit repositories), on a monthly basis. Additionally, on the Servicing
Transfer Date, the Seller, as servicer, will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and
that for each Mortgage Loan, the Seller, as servicer, agrees it shall report one
of the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
II. Representations and Warranties Regarding Individual Mortgage Loans
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, all payments required to be made up
to the related Closing Date for the Mortgage Loan under the terms of the
Mortgage Note, other than payments not yet 30 days delinquent, have been made
and credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or more
delinquent at any time since the origination of the Mortgage Loan. The first
Monthly Payment shall be made with respect to the Mortgage Loan on its related
Due Date or within the grace period, all in accordance with the terms of the
related Mortgage Note;
(c) No Outstanding Charges. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, there are no defaults in
complying with the terms of the Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid,
or an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is not yet
due and payable. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is earlier, to
the day which precedes by one month the related Due Date of the first
installment of principal and interest;
(d) Original Terms Unmodified. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the terms of the Mortgage
Note and Mortgage have not been impaired, waived, altered or modified in any
respect, from the date of origination except by a written instrument which has
been recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, pursuant to the terms of the
Mortgage, all buildings or other improvements upon the Mortgaged Property are
insured by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are provided for in the Xxxxxx Xxx
Guides or by Xxxxxxx Mac, as well as all additional requirements set forth in
Section 2.10 of the Interim Servicing Agreement. If required by the National
Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration as in effect which policy conforms to Xxxxxx
Xxx and Xxxxxxx Mac requirements, as well as all additional requirements set
forth in Section 2.10 of the Interim Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, no portion of the Mortgaged
Property is used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not be
considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the Closing Date, subject to the lien of a
warehouse lender to be released prior to the closing of any Mortgage Loan sale,
the Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage
Loans to the Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the Purchaser or
the Purchaser's designee, in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. The Mortgage Loan is not
assigned or pledged, and the Seller has good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends to
relinquish all rights to possess, control and monitor the Mortgage Loan. After
the related Closing Date, the Seller will have no right to modify or alter the
terms of the sale of the Mortgage Loan and the Seller will have no obligation or
right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement;
(n) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, other than payments due but not yet
30 days or more delinquent, there is no default, breach, violation or event
which would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(r) No Mechanics' Liens. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, there are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in mortgage loans similar to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. As of the Servicing Transfer
Date, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian. The Seller is in possession
of a complete, true and accurate Mortgage File in compliance with Exhibit A to
the Purchase Agreement, except for such documents the originals of which have
been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Closing Date, and to the Seller's knowledge as of the Servicing Transfer
Date, there is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. As of the Servicing Transfer Date, the origination, servicing and
collection practices used by the Seller and the Interim Servicer with respect to
the Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of, or under the control of, the Seller
or the Interim Servicer and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Interim Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. As to the Closing Date, and
to the best of the Seller's knowledge as of the Servicing Transfer Date, there
is no pending action or proceeding directly involving the Mortgaged Property in
which compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with respect
to the Mortgage Property; and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. As of the Servicing Transfer
Date, the Mortgagor has not notified the Seller, and the Seller has no knowledge
of any relief requested or allowed to the Mortgagor under the Relief Act or
other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. As of the Servicing Transfer Date, the Seller
has caused to be fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis;
(ss) Escrow Analysis. As of the Servicing Transfer Date, if
applicable, with respect to each Mortgage, the Seller has within the last twelve
months (unless such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted the amount
of such payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior Servicing. As of the Servicing Transfer Date, each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No Default Under First Lien. As of the Servicing Transfer Date,
with respect to each Second Lien Loan, the related First Lien Loan related
thereto is in full force and effect, and there is no default, breach, violation
or event which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. As of the Servicing Transfer Date,
the Seller has not received a written notice of default of any senior mortgage
loan related to the Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) as of the Closing Date and to the Seller's Knowledge as of the
Servicing Transfer Date, all ground lease rents, other payments, or assessments
that have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Either (x) each Mortgage Loan is covered
by a paid in full, life of loan, tax service contract, and such contract is
transferable, or (y) on the related Closing Date the Purchaser shall net $75.00
per Mortgage Loan from the related Purchase Price to cover the cost of such a
tax service contract;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the Mortgagor has not
filed and will not file a bankruptcy petition or has not become the subject and
will not become the subject of involuntary bankruptcy proceedings or has not
consented to or will not consent to the filing of a bankruptcy proceeding
against it or to a receiver being appointed in respect of the related Mortgaged
Property;
(hhh) No Prior Offer. As of the Closing Date, the Mortgage Loan has
not previously been offered for sale;
(iii) [Reserved];
(jjj) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Originator or any Affiliate of the Originator. If, at the
time of loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the Originator,
the Originator referred the related Mortgagor's application to such Affiliate
for underwriting consideration;
(kkk) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(lll) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Originator, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(mmm) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(nnn) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation;
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(ppp) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
EXHIBIT J
TRANSFER DATE MORTGAGE LOAN DAT
EXHIBIT P
MERITAGE PURCHASE AGREEMENTS
EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of March 29, 2005 ("Amendment"), to the
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2004,
(the "Purchase Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a
New York corporation ("Xxxxxx Xxxxxxx"), and MERITAGE MORTGAGE CORPORATION, an
Oregon corporation ("Meritage").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
a. Section 9.02(dd) is hereby amended by deleting the
following language:
"to the best of the Seller's knowledge,"
b. Section 9.02(ll) is hereby amended by deleting the
following language from the first sentence:
"To the best of the Seller's knowledge,"
c. Section 13 is hereby amended by adding the following
language to the end of the first sentence in the second
full paragraph thereof following "such Reconstitution"
and prior to ".":
"; provided, however, as to each Mortgage Loan to the extent that
any facts or circumstances which did not exist on the applicable Closing Date
hereunder would render any representation and warranty materially false with
respect to such Mortgage Loan if made as of the date of such required
restatement, in such event, the Seller shall be permitted to take an exception
to the representation and warranty with respect to such changed fact or
circumstance with respect to such Mortgage Loan as of the date of such required
restatement; provided, further, that the Seller shall be required to notify the
Purchaser and any Successor Servicer promptly and no later than the date of such
required restatement of any such facts or circumstances"
d. Exhibit I, Form of Assignment, Assumption and
Recognition Agreement is hereby amended by deleting
Exhibit B, Section II in its entirety and replacing it
with the language attached hereto on Exhibit 1.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
MERITAGE MORTGAGE CORPORATION
By:
--------------------------------------
Name:
Title:
EXHIBIT 1
"II. Representations and Warranties Regarding Individual Mortgage Loans
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. As of the Servicing Transfer Date, all
payments required to be made up to the related Closing Date for the Mortgage
Loan under the terms of the Mortgage Note, other than payments not yet 30 days
delinquent, have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under the Mortgage Loan
been 30 days or more delinquent at any time since the origination of the
Mortgage Loan. The first Monthly Payment shall be made with respect to the
Mortgage Loan on its related Due Date, all in accordance with the terms of the
related Mortgage Note;
(c) No Outstanding Charges. As of the Servicing Transfer Date, there
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid. The Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly, for the payment of
any amount required under the Mortgage Loan, except for interest accruing from
the date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by one month the
related Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the terms of the Mortgage
Note and Mortgage have not been impaired, waived, altered or modified in any
respect, from the date of origination except by a written instrument which has
been recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. As of the Servicing Transfer Date, pursuant to
the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable insurer against loss by
fire, hazards of extended coverage and such other hazards as are provided by for
in the Xxxxxx Xxx Guides or by Xxxxxxx Mac, as well as all additional
requirements set forth in Section 2.10 of the Interim Servicing Agreement. If
required by the National Flood Insurance Act of 1968, as amended, each Mortgage
Loan is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration as in effect which
policy conforms to Xxxxxxx Mac requirements, as well as all additional
requirements set forth in Section 2.10 of the Interim Servicing Agreement. All
individual insurance policies contain a standard mortgagee clause naming the
Seller and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all applicable
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and abusive
lending laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to prepayment penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements.
Notwithstanding the foregoing, the Seller shall not be responsible for a breach
of a federal, state or local law, other than those governing the origination of
the Mortgage Loan in effect at the time of the Mortgage Loan was originated,
following the Servicing Transfer Date;
(h) No Satisfaction of Mortgage. As of the Servicing Transfer Date,
the Mortgage has not been satisfied, canceled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from the lien
of the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. The
Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. As of the Servicing Transfer Date, no portion of
the Mortgaged Property is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) The lien of current real property taxes and assessments
not yet due and payable as of the Servicing Transfer Date;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the Closing Date, the Seller is the sole owner
of record and holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser, the
Seller will retain the Mortgage Files or any part thereof with respect thereto
not delivered to the Custodian, the Purchaser or the Purchaser's designee, in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Seller has
good, indefeasible and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or if the related Mortgaged Property is located in the state
of Iowa an attorney's opinion, or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance
policy is issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, its successors and assigns, as to the first (with
respect to a First Lien Loan) or second (with respect to a Second Lien Loan)
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (or to the extent a Mortgage Note provides for negative amortization, the
maximum amount of negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (A), (B) and (C) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(q) No Defaults. As of the Servicing Transfer Date, other than
payments due but not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(r) No Mechanics' Liens. As of the Servicing Transfer Date, there
are no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could give
rise to such liens) affecting the related Mortgaged Property which are or may be
liens prior to, or equal or coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date (except for interest only
Mortgage Loans), over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgage Loan is payable on the first day of each month.
Unless stated otherwise on the related Mortgage Loan Schedule, the Mortgage Loan
does not require a balloon payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on legally enforceable forms acceptable in
the secondary mortgage market
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property was lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. As of the Servicing Transfer
Date, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. The Mortgage Loan is fully
funded, and there is no requirement to make any future advances to the related
Mortgagor;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Servicing Transfer Date, there is no proceeding pending or threatened for
the total or partial condemnation of the Mortgaged Property. The Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair. Since the
origination of the Mortgage Loan, there have not been any condemnation
proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. As of the Servicing Transfer Date, the origination, servicing and
collection practices used by the Seller and the Interim Servicer with respect to
the Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of, or under the control of, the Seller
or the Interim Servicer and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Interim Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance, except as
disclosed in the related Mortgage Loan File;
(ll) No Violation of Environmental Laws. As of the Servicing
Transfer Date, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. As of the Servicing Transfer
Date, the Mortgagor has not notified the Seller, and the Seller has no knowledge
of any relief requested or allowed to the Mortgagor under the Servicemembers'
Civil Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, acceptable to the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. As of the Servicing Transfer Date, the Seller
has caused to be fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis;
(ss) Escrow Analysis. As of the Servicing Transfer Date, if
applicable, with respect to each Mortgage, the Seller has within the last twelve
months (unless such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted the amount
of such payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior Servicing. As of the Servicing Transfer Date, each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No Default Under First Lien. As of the Servicing Transfer Date,
with respect to each Second Lien Loan, the related First Lien Loan related
thereto is in full force and effect, and there is no default, breach, violation
or event which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. As of the Servicing Transfer Date,
the Seller has not received a written notice of default of any senior mortgage
loan related to the Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) as of the Servicing Transfer Date, all ground lease rents,
other payments, or assessments that have become due have been paid; and (7) the
use of leasehold estates for residential properties is a widely accepted
practice in the jurisdiction in which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note and any addendums or
riders thereto executed by the related Mortgagor, is identified on the related
Mortgage Loan Schedule. With respect to Mortgage Loans originated prior to
October 1, 2002, no such Prepayment Penalty may be imposed for a term in excess
of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. Notwithstanding the first sentence of this clause (aaa), if a Mortgage Loan
is not considered a High Cost Loan on the related Closing Date because a related
law is not being enforced or is not effective on the related Closing Date due to
judicial or administrative review or litigation and such Mortgage Loan becomes a
High Cost Loan at a later date as a result of such law becoming enforceable or
effective, such Mortgage Loan shall be subject to the automatic repurchase
provisions of Subsection 9.03 within the timeframes set forth therein;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. Each Mortgage Loan is an obligation which
is principally secured by an interest in real property within the meaning of
Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. As of the Servicing Transfer Date, the
Mortgagor has not filed a bankruptcy petition and has not become the subject of
involuntary bankruptcy proceedings and has not consented to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect of
the related Mortgaged Property;
(hhh) No Prior Offer. As of the Closing Date, the Mortgage Loan has
not previously been offered for sale unless (i) notice of such Mortgage Loan
resale has been provided to the Purchaser in writing prior to the commencement
of the Purchaser's due diligence and (ii) the Mortgage Loan was originated
without exception pursuant to the Underwriting Guidelines.
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(kkk) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than 7% of the principal amount of such
Mortgage Loan;
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(mmm) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction."
EXECUTION COPY
==============================================================================
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
MERITAGE MORTGAGE CORPORATION,
Seller
------------------------------------------------
Dated as of June 1, 2005
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.................................................
SECTION 2. AGREEMENT TO PURCHASE.......................................
SECTION 3. MORTGAGE SCHEDULES..........................................
SECTION 4. PURCHASE PRICE..............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES...............................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER.........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS.............................
SECTION 8. TRANSFER OF SERVICING.......................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH.........................................
SECTION 10. CLOSING.....................................................
SECTION 11. CLOSING DOCUMENTS...........................................
SECTION 12. COSTS.......................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION.................
SECTION 14. THE SELLER..................................................
SECTION 15. FINANCIAL STATEMENTS........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST..............
SECTION 17. NOTICES.....................................................
SECTION 18. SEVERABILITY CLAUSE.........................................
SECTION 19. COUNTERPARTS................................................
SECTION 20. GOVERNING LAW...............................................
SECTION 21. INTENTION OF THE PARTIES....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT....
SECTION 23. WAIVERS.....................................................
SECTION 24. EXHIBITS....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES.............................
SECTION 26. REPRODUCTION OF DOCUMENTS...................................
SECTION 27. FURTHER AGREEMENTS..........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE......................
SECTION 29. NO SOLICITATION.............................................
SECTION 30. WAIVER OF TRIAL BY JURY.....................................
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS...
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES
AGREEMENT (the "Agreement"), dated as of June 1, 2005, by and between Xxxxxx
Xxxxxxx Mortgage Capital Inc., a New York corporation, having an office at 0000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), and Meritage
Mortgage Corporation, an Oregon corporation, having an office at 0000 XX Xxxxxxx
Xxxx, Xxxxx 000, Xxxx Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2004, as
amended by Amendment No. 1, dated as of March 29, 2005 (the "Original Purchase
Agreement"), pursuant to which the Seller desires to sell, from time to time, to
the Purchaser, and the Purchaser desires to purchase, from time to time, from
the Seller, certain first and second lien, adjustable-rate and fixed-rate B/C
residential mortgage loans (the "Mortgage Loans") on a servicing released basis
as described herein, and which shall be delivered in pools of whole loans (each,
a "Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing by the Interim Servicer and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
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 Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purpose of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxxx Mac Transfer.
Agreement: This Amended and Restated Mortgage Loan Purchase and
Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i) the value thereof as determined by an appraisal made for the originator
of the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser, and (ii) the purchase price paid for the related Mortgaged Property
by the Mortgagor with the proceeds of the Mortgage Loan.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
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 sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the state in which the Interim Servicer's servicing operations are located or
(iii) the state in which the Custodian's operations are located, are authorized
or obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement as Exhibit 11.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Subsection 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
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.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage loans
having high interest rates, points and/or fees) or (c) categorized as High Cost
pursuant to Appendix E of Standard & Poor's Glossary. For avoidance of doubt,
the parties agree that this definition shall apply to any law in effect at the
time of origination of any related Mortgage Loan.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest or assigns, or any successor to the
Interim Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
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 Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity date; (12) the
first payment date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment was actually applied
to the outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, a code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (24) a code indicating the documentation style
(i.e., full, alternative or reduced); (25) asset verification (Y/N); (26) the
loan credit classification (as described in the Underwriting Guidelines); (27)
whether such Mortgage Loan provides for a Prepayment Penalty and, if applicable,
the Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a High Cost Loan; (39) a code indicating whether
the Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percentage of coverage, if applicable; (43)
Appraised Value; (44) appraisal type; (45) automated valuation model (AVM) if
applicable; (46) appraisal date; (47) with respect to the related Mortgagor, the
debt-to-income ratio; (48) the MERS Identification Number, if applicable; (49) a
field indicating whether such Mortgage Loan is a Home Loan and (50) a field
indicating whether such Mortgage Loan is a leasehold estate. With respect to the
Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; (4) the weighted average maturity of the Mortgage Loans; (5) the
applicable Cut-off Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President or an
Officer and by the Treasurer or the Secretary or one of the Assistant Treasurers
or Assistant Secretaries of the Seller, and delivered to the Purchaser as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, acceptable by the Seller, who had
no interest, direct or indirect, in the Mortgaged Property or in any loan made
on the security thereof, and whose compensation was not affected by the approval
or disapproval of the Mortgage Loan, and such appraiser and the appraisal made
by such appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Servicing Fee: An amount equal to twenty seven ($27) dollars per
Mortgage Loan per month. Such fee shall be payable monthly and shall be
pro-rated for any portion of a month during which the Mortgage Loan is serviced
by the Interim Servicer under the Interim Servicing Agreement, provided the
Transfer Date is greater than 30 days following the related Closing Date.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
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 Seller 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 Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller 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.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: With respect to any Mortgage Loan, the
Standard & Poor's LEVELS(R) Glossary, as may be in effect at the time of
origination of such Mortgage Loan.
Subservicer: Any subservicer which is subservicing any of the
Mortgage Loans pursuant to a Subservicing Agreement. Any subservicer, and any
such subservicer's successors in interest and assigns, shall meet the
qualifications set forth in Subsection 7.02 and be acceptable to the Purchaser
in its sole discretion.
Subservicing Agreement: An agreement, acceptable to the Purchaser in
its sole discretion, between the Interim Servicer and a Subservicer for the
servicing of the related Mortgage Loans.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Interim Servicing Agreement, which date shall not be more than 30 days
following the related Closing Date, unless otherwise agreed upon by the parties
hereto.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (1) all principal received after
the related Cut-off Date, (2) all other recoveries of principal collected on or
after the related Cut-off Date, and (3) all payments of interest on the Mortgage
Loans net of applicable Servicing Fees, if any.
SECTION 5.Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage (except with
respect to MERS Designated Loans), pertaining to each Mortgage Loan, or (b) make
the related Mortgage File available to the Purchaser for examination at such
other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans are unacceptable to the Purchaser for any
reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Interim Servicer pursuant to this Agreement to be appropriately identified
in the Seller's computer system and/or books and records, as appropriate, to
clearly reflect the sale of the related Mortgage Loan to the Purchaser. The
Seller shall cause the Interim Servicer to release from its custody the contents
of any Servicing File retained by it only in accordance with this Agreement or
the Interim Servicing Agreement, except when such release is required in
connection with a repurchase of any such Mortgage Loan pursuant to Subsection
9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Interim Servicer after
the related Cut-off Date on or in connection with a Mortgage Loan shall be
vested in the Purchaser or one or more designees of the Purchaser; provided,
however, that all funds received on or in connection with a Mortgage Loan shall
be received and held by the Seller or the Interim Servicer in trust for the
benefit of the Purchaser or the appropriate designee of the Purchaser, as the
case may be, as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
The Seller shall be or shall cause the Interim Servicer to be
responsible for maintaining, and shall maintain, a complete set of books and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Seller
shall or shall cause the Interim Servicer to maintain in its possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and periodic inspection reports, as required by the Xxxxxx Mae Guides. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller
or the Interim Servicer may be in the form of microfilm or microfiche so long as
the Seller or the Interim Servicer complies with the requirements of the Xxxxxx
Xxx Guides.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
this Agreement within two weeks of their execution, provided, however, that the
Seller shall provide the Custodian, or to such other Person as the Purchaser
shall designate in writing, with a certified true copy of any such document
submitted for recordation within two weeks of its execution, and shall promptly
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 ninety days of its submission for
recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 120 days (or 180 days in connection with public
recording offices located in New York, New Jersey and Pennsylvania), following
the related Closing Date (other than with respect to the Assignments of Mortgage
which shall be delivered to the Custodian in blank and recorded subsequently by
the Purchaser or its designee), and in the event that the Seller does not cure
such failure within 30 days of discovery or receipt of written notification of
such failure from the Purchaser, the related Mortgage Loan shall, upon the
request of the Purchaser, be repurchased by the Seller at the price and in the
manner specified in Subsection 9.03. The foregoing repurchase obligation shall
not apply in the event that the Seller cannot deliver an original document
submitted for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; provided that the Seller shall instead deliver a recording receipt
of such recording office or, if such recording receipt is not available, an
officer's certificate of a servicing officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
related Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or
its designee said officer's certificate.
The Seller shall pay all initial recording fees (except with respect
to MERS Designated Loans), if any, for the assignments of mortgage and any other
fees or costs in transferring all original documents to the Custodian or, upon
written request of the Purchaser, to the Purchaser or the Purchaser's designee.
The Purchaser or the Purchaser's designee shall be responsible for recording the
Assignments of Mortgage and shall be reimbursed by the Seller for the costs
associated therewith pursuant to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer to, have an
internal quality control program that verifies, on a regular basis, the
existence and accuracy of the legal documents, credit documents, property
appraisals, and underwriting decisions. The program shall include evaluating and
monitoring the overall quality of the Seller's loan production and the servicing
activities of the Interim Servicer. The program is to ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors and
omissions by officers, employees, or other authorized persons.
Subsection 6.05 MERS Designated Loan.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the Purchaser as the
Investor and the Custodian as Custodian, and no Person shall be listed as
Interim Funder on the MERS System. In addition on or prior to the related
Closing Date, Seller shall provide the Custodian and the Purchaser with a MERS
report listing the Purchaser as the Investor and the Custodian as Custodian, and
no Person as Interim Funder with respect to each MERS Designated Mortgage Loan.
SECTION 7. Servicing of the Mortgage Loans.
Subsection 7.01 Servicing of the Mortgage Loans; Interim Servicer
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract servicer
of the Mortgage Loans for an interim period pursuant to and in accordance with
the terms and conditions contained in the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein). The
Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
Pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Interim
Servicer shall begin servicing the Mortgage Loans on behalf of the Purchaser and
shall be entitled to a Servicing Fee, if any, with respect to such Mortgage
Loans until the applicable Transfer Date. The Interim Servicer shall conduct
such servicing in accordance with the Interim Servicing Agreement.
Subsection 7.02 Subservicing
The Mortgage Loans may be subserviced by a Subservicer on behalf of
the Seller in accordance with the servicing provisions of the Interim Servicing
Agreement, provided that (i) the Subservicer is a Xxxxxxx Mac seller/servicer in
good standing, and no event has occurred, including but not limited to, a change
in insurance coverage, which would make it unable to comply with the eligibility
requirements for seller/servicers imposed by Xxxxxxx Mac, or which would require
notification to Xxxxxxx Mac and (ii) the Purchaser approves any Subservicer in
writing. The Interim Servicer may perform any of its servicing responsibilities
under the Interim Servicing Agreement or may cause the Subservicer to perform
any such servicing responsibilities on its behalf, but the use by the Interim
Servicer of a Subservicer shall not release the Interim Servicer from any of its
obligations under the Interim Servicing Agreement and the Interim Servicer shall
remain responsible under the Interim Servicing Agreement for all acts and
omissions of a Subservicer as fully as if such acts and omissions were those of
the Interim Servicer. The Interim Servicer shall pay all fees and expenses of
any Subservicer engaged by the Interim Servicer from its own funds.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Interim Servicer to cease all servicing responsibilities related to,
the related Mortgage Loans subject to such Transfer Date. The Transfer Date
shall be the date set forth in the related Purchase Price and Terms Agreement.
On or prior to the applicable Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Seller shall cause the Interim
Servicer to mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall cause the Interim Servicer to provide the Purchaser with copies of all
such related notices.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall cause the Interim Servicer to transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall cause the Interim
Servicer to provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Interim Servicer to forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Interim Servicer's possession relating to
each related Mortgage Loan including the information enumerated in the Interim
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall cause the Interim Servicer to
provide the Purchaser, or its designee, with immediately available funds by wire
transfer in the amount of the net Escrow Payments and suspense balances and all
loss draft balances associated with the related Mortgage Loans. The Seller shall
cause the Interim Servicer to provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in its sole
discretion, of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall cause the
Interim Servicer to wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Interim Servicer.
(e) Payoffs and Assumptions. The Seller shall cause the Interim
Servicer to provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Interim Servicer on the related Mortgage
Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Interim Servicer or the Seller on
each related Mortgage Loan shall be properly applied by the Seller to the
account of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt.
The Seller shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment sufficient information to permit appropriate processing of the payment
by the Purchaser. Any Monthly Payments received by the Seller sixty one (61) or
more days after the Transfer Date will be returned to the related Mortgagor with
instructions to remit to the Purchaser or its servicer. The Seller shall assume
responsibility for notifying the Successor Servicer of the necessary and
appropriate legal application of such Monthly Payments received by the Seller
after the Transfer Date with respect to related Mortgage Loans then known by the
Seller as being in foreclosure or bankruptcy; provided, for purposes of this
Agreement, necessary and appropriate legal application of such Monthly Payments
shall include, but not be limited to, endorsement of a Monthly Payment to the
Purchaser with the particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application instructions and the
Seller shall cause the Interim Servicer to comply with the foregoing
requirements with respect to all Monthly Payments received by the Interim
Servicer after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer
Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage in a Custodial Account or Escrow Account, the Seller shall be
liable for the amount of such shortage. The Seller shall reimburse the
Purchaser for the amount of such shortage within thirty (30) days after
receipt of written demand therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party
shorted by the improper payment application within five (5) Business Days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h) shall
be accompanied by a statement indicating the corresponding Seller and/or
the Purchaser Mortgage Loan identification number and an explanation of
the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall or shall cause the Interim Servicer
to file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall provide copies of such forms to
the Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties incurred by the Purchaser due to the Seller's failure to comply with
this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation or formation and has all licenses necessary to carry on its
business as now being conducted and is licensed or is exempt from such licensing
requirements, qualified and in good standing in the states where the 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 Seller. The Seller has
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement has
been duly executed and delivered and constitutes the valid, legal, binding and
enforceable obligation of the Seller, except as enforceability may be limited by
(i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law. All requisite corporate action has been
taken by the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or 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 Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws;
(i) Financial Statements. To the extent that such statements are
available, the Seller has delivered to the Purchaser financial statements as to
its last three complete fiscal years and any later quarter ended more than 60
days prior to the execution of this Agreement. All such financial statements
fairly present the pertinent results of operations and changes in financial
position for each of such periods and the financial position at the end of each
such period of the Seller, its parent company and its subsidiaries and have been
prepared in accordance with generally accepted accounting principles of the
United States consistently applied throughout the periods involved, except as
set forth in the notes thereto. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. In
addition, the Seller has delivered information obtained from ABS Net as to its
loan gain and loss experience in respect of foreclosures and its loan
delinquency experience with respect to mortgage loans sold to others during the
immediately preceding three-year period, and, to the Seller's knowledge, all
such information so delivered shall be true and correct in all material
respects. The Seller has completed any forms requested by the Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage (except with respect to MERS Designated Mortgage Loans),
and any other documents required to be delivered with respect to each Mortgage
Loan pursuant to the Custodial Agreement, shall be delivered to the Custodian
all in compliance with the specific requirements of the Custodial Agreement.
With respect to each Mortgage Loan, the Seller will be in possession of a
complete Mortgage File in compliance with Exhibit A hereto, except for such
documents as will be delivered to the Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. Immediately prior to each related Closing Date,
the Seller is the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note,
and upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files with respect thereto in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Credit Reporting. The Seller, as servicer, will fully furnish,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis.
Additionally, the Seller, as servicer, will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Mae Guide Announcement 95-19 and
that for each Mortgage Loan, the Seller, as servicer, agrees it shall report one
of the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date, all in
accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is earlier, to
the day which precedes by one month the related Due Date of the first
installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided by for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Interim Servicing Agreement. If required by the National Flood Insurance Act
of 1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration as in effect which policy conforms to Xxxxxxx Mac requirements,
as well as all additional requirements set forth in Section 2.10 of the Interim
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all applicable
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and abusive
lending laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to prepayment penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. No portion of the Mortgaged Property is used for
commercial purposes, and since the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or if the related Mortgaged Property is located in the state
of Iowa an attorney's opinion, or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance
policy is issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, its successors and assigns, as to the first (with
respect to a First Lien Loan) or second (with respect to a Second Lien Loan)
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (or to the extent a Mortgage Note provides for negative amortization, the
maximum amount of negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (A), (B) and (C) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date (except for interest only
Mortgage Loans), over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgage Loan is payable on the first day of each month.
Unless stated otherwise on the related Mortgage Loan Schedule, the Mortgage Loan
does not require a balloon payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on legally enforceable forms acceptable in
the secondary mortgage market;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. The Mortgage Loan is fully
funded, and there is no requirement to make any future advances to the related
Mortgagor;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. Since the origination of the
Mortgage Loan, there have not been any condemnation proceedings with respect to
the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Interim Servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Interim Servicer and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Interim Servicer executed and delivered any and
all notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance, except as
disclosed in the related Mortgage Loan File;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgage Property;
and nothing further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Servicemembers' Civil Relief Act or other
similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, acceptable to the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. The Seller has caused to be fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and unfavorable)
on its borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis;
(ss) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note and any addendums or
riders thereto executed by the related Mortgagor, is identified on the related
Mortgage Loan Schedule. With respect to Mortgage Loans originated prior to
October 1, 2002, no such Prepayment Penalty may be imposed for a term in excess
of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. Notwithstanding the first sentence of this clause (aaa), if a Mortgage Loan
is not considered a High Cost Loan on the related Closing Date because a related
law is not being enforced or is not effective on the related Closing Date due to
judicial or administrative review or litigation and such Mortgage Loan becomes a
High Cost Loan at a later date as a result of such law becoming enforceable or
effective, such Mortgage Loan shall be subject to the automatic repurchase
provisions of Subsection 9.03 within the timeframes set forth therein;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. Each Mortgage Loan is an obligation which
is principally secured by an interest in real property within the meaning of
Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. The Mortgagor has not filed a bankruptcy
petition and has not become the subject of involuntary bankruptcy proceedings
and has not consented to the filing of a bankruptcy proceeding against it or to
a receiver being appointed in respect of the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not previously been
offered for sale unless (i) notice of such Mortgage Loan resale has been
provided to the Purchaser in writing prior to the commencement of the
Purchaser's due diligence and (ii) the Mortgage Loan was originated without
exception pursuant to the Underwriting Guidelines;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(kkk) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than 7% of the principal amount of such
Mortgage Loan;
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(mmm) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, 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 Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Xxxxxxxxx (xx), (xx), (xxx), (xxx), (xxx), (xxx), (xxx),
(kkk), (lll) and (mmm) of Subsection 9.02, the Seller shall repurchase such
Mortgage Loan at the Repurchase Price. In the event that a breach shall involve
any representation or warranty set forth in Subsection 9.01, and such breach
cannot be cured within 60 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans affected by such breach
shall, at the Purchaser's option, be repurchased by the Seller at the Repurchase
Price. However, if the breach shall involve a representation or warranty set
forth in Subsection 9.02 (except as provided in the second sentence of this
paragraph with respect to certain breaches for which no substitution is
permitted) and the Seller discovers or receives notice of any such breach within
120 days of the related Closing Date, the Seller shall, at the Purchaser's
option and provided that the Seller has a Qualified Substitute Mortgage Loan,
rather than repurchase the Mortgage Loan as provided above, remove such Mortgage
Loan (a "Deleted Mortgage Loan") and substitute in its place a Qualified
Substitute Mortgage Loan or Loans, provided that any such substitution shall be
effected not later than 120 days after the related Closing Date. If the Seller
has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient
Mortgage Loan at the Repurchase Price. Any repurchase of a Mortgage Loan or
Loans pursuant to the foregoing provisions of this Subsection 9.03 shall be
accomplished by either (a) if the Interim Servicing Agreement has been entered
into and is in effect, deposit in the Custodial Account of the amount of the
Repurchase Price for distribution to the Purchaser on the next scheduled
Remittance Date, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution or (b) if the Interim Servicing Agreement has not been
entered into or is no longer in effect, by direct remittance of the Repurchase
Price to the Purchaser or its designee in accordance with the Purchaser's
instructions.
Three (3) days prior to the repurchase of any Mortgage Loan as set
forth above, the Purchaser, the Seller and an independent third party bailee
shall arrange for the reassignment of the repurchased Mortgage Loan and the
related Servicing Rights to the Seller and the delivery to such independent
third party bailee, pursuant to a bailee agreement mutually acceptable to the
Purchaser, related Seller and such independent third party bailee, the Mortgage
Loan Documents held by the Purchaser or its designee relating to the repurchased
Mortgage Loan. Within three (3) Business Days of repurchase, but in no instance
later than the related Transfer Date, all Mortgage Files shall be released to
Meritage Mortgage Corporation, 0000 Xxxxxxxxx Xxx, Xxxxxxxxxxxx, XX 00000, Attn:
Capital Markets. Upon such repurchase, the related Mortgage Loan Schedule shall
be amended to reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Interim Servicer to remit directly to the Purchaser, or its designee
in accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller representations and warranties contained
in this Agreement or any Reconstitution Agreement. It is understood and agreed
that the obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03 and in
Subsection 14.01 constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan, or (ii) after the related Closing Date is not paid by the
related Mortgagor to the Purchaser within thirty (30) days of such Due Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage Loan from the
Purchaser at a price equal to the related Purchase Price Percentage multiplied
by the then outstanding principal balance of such Mortgage Loan, plus accrued
and unpaid interest thereon from the date to which interest was last paid
through the day prior to the repurchase date at the applicable Mortgage Interest
Rate, plus any outstanding advances owed to any servicer in connection with such
Mortgage Loan. Notwithstanding the foregoing, the Purchaser's right to request a
repurchase hereunder shall not commence until the date which is sixty (60) days
following the related Due Date (the "Breach Date"). The Purchaser shall have
ninety (90) days following the related Breach Date to notify the Seller and
request a repurchase and the Seller shall repurchase such Mortgage Loan within
thirty (30) days of receipt of such notice, provided notification is in
accordance with Section 17. Notwithstanding the foregoing, the Purchaser
reserves the right to request a repurchase following such sixty (60) day
timeframe in the event of a NSF return.
Subsection 9.05 Premium Recapture. With respect to any Mortgage Loan
without prepayment penalties that prepays in full during the first six months
following the related Closing Date, and with respect to any Mortgage Loan that
is repurchased pursuant to Subsection 9.03, the Seller shall pay the Purchaser,
within three (3) Business Days after such prepayment in full or repurchase, an
amount equal to the excess of the Purchase Price Percentage for such Mortgage
Loan over par, multiplied by the outstanding principal balance of such Mortgage
Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At both the Purchaser's and
Seller's option, each Closing shall be either: by telephone, confirmed by letter
or wire as the parties shall agree, or conducted in person, at such place as the
parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser in a mutually acceptable
electronic format a listing on a loan-level basis of the necessary
information to compute the Purchase Price of the Mortgage Loans delivered
on such Closing Date (including accrued interest), and prepare a Mortgage
Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Interim Servicer under the Interim Servicing
Agreement (with respect to each Mortgage Loan for an interim period, as
specified therein) 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 or an Event of
Default under the Interim Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) the Interim Servicing Agreement, dated as of the
initial Cut-off Date (to be executed and delivered only for
the initial Closing Date);
(3) with respect to the initial Closing Date, the
Custodial Agreement, dated as of the initial Cut-off Date;
(4) the related Mortgage Loan Schedule (one copy to be
attached to the Custodian's counterpart of the Custodial
Agreement in connection with the initial Closing Date, and one
copy to be attached to the related Assignment and Conveyance
as the Mortgage Loan Schedule thereto);
(5) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(6) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Seller, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(7) with respect to the initial Closing Date, an Opinion
of Counsel of the Seller (who may be an employee of the
Seller), substantially in the form of Exhibit D hereto
("Opinion of Counsel of the Seller"); with respect to
subsequent Closing Dates, an Opinion of Counsel of the Seller
upon request of the Purchaser;
(8) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), substantially in the form of an exhibit to the
Custodial Agreement(s);
(9) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(10) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by the
Seller by merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
(11) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto;
(12) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance; and
(13) a MERS Report reflecting the Purchaser as Investor,
the Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(ii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iii) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers, provided that the servicing shall be
transferred from the Seller to the successor servicer of Purchaser's
choice prior to the creation of any REMICs.
For up to six (6) transfers, the Seller agrees to execute in
connection with any Agency Transfer, any and all pool purchase contracts, and/or
agreements reasonably acceptable to the Seller among the Purchaser, the Seller
or Xxxxxxx Mac (as the case may be) and any servicer in connection with a Whole
Loan Transfer, a seller's warranties and servicing agreement or a participation
and servicing agreement in form and substance reasonably acceptable to the
parties, and in connection with a Securitization Transfer, a pooling and
servicing agreement in form and substance reasonably acceptable to the parties
or an Assignment and Recognition Agreement substantially in the form attached
hereto as Exhibit I (collectively, the agreements referred to herein as
designated, the "Reconstitution Agreements"), together with an opinion of
counsel with respect to such Reconstitution Agreements; provided, however, as to
each Mortgage Loan to the extent that any facts or circumstances which did not
exist on the applicable Closing Date hereunder would render any representation
and warranty materially false with respect to such Mortgage Loan if made as of
the date of such required restatement, in such event, the Seller shall be
permitted to take an exception to the representation and warranty with respect
to such changed fact or circumstance with respect to such Mortgage Loan as of
the date of such required restatement; provided, further, that the Seller shall
be required to notify the Purchaser and any Successor Servicer promptly and no
later than the date of such required restatement of any such facts or
circumstances.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate
reasonably with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in Subsections 9.01 and
9.02 as of the settlement or closing date in connection with such Reconstitution
(each, a "Reconstitution Date"), such restatement to be in the form of Exhibit B
to Exhibit I hereto, or make the representations and warranties set forth in the
related selling/servicing guide of the servicer or issuer, as the case may be,
or such representations or warranties as may be required by any rating agency or
prospective purchaser of the related securities or such Mortgage Loans in
connection with such Reconstitution. The Seller shall provide to such servicer
or issuer, as the case may be, and any other participants or purchasers in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller or the
Interim Servicer as are reasonably believed necessary by the Purchaser or any
such other participant; and (iii) to execute, deliver and satisfy all conditions
set forth in any indemnity agreement required by the Purchaser or any such
participant, including, without limitation, an Indemnification and Contribution
Agreement in substantially the form attached hereto as Exhibit B. Moreover, the
Seller agrees to cooperate with all reasonable requests made by the Purchaser to
effect such Reconstitution Agreements. The Seller shall indemnify the Purchaser,
each affiliate of the Purchaser participating in the Reconstitution and each
Person who controls the Purchaser or such affiliate and their respective present
and former directors, officers, employees and agents, and hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that each of them may sustain arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
information provided by or on behalf of the Seller regarding the Seller, the
Mortgage Loans or the Underwriting Guidelines set forth in any offering document
prepared in connection with any Reconstitution. For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement.
In the event the Purchaser has elected to have the Seller or the
Interim Servicer hold record title to the Mortgages, prior to the Reconstitution
Date, the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the Interim
Servicer, as applicable, acceptable to the prospective purchaser or trustee, as
applicable, for each Mortgage Loan that is part of the Reconstitution and shall
pay all preparation and recording costs associated therewith. In connection with
the Reconstitution, the Seller shall execute or shall cause the Interim Servicer
to execute each assignment of mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the prospective
purchaser or trustee, as applicable, upon the Seller's receipt thereof.
Additionally, the Seller shall prepare and execute or shall cause the Interim
Servicer to execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses (including legal fees and expenses incurred
in connection with the enforcement of the Seller's indemnification obligation
under this Subsection 14.01) and related costs, judgments, and any other costs,
fees and expenses that such parties may sustain in any way related to the
failure of the Seller to perform its duties and the Interim Servicer to service
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13 or any breach of
any of Seller's representations, warranties and covenants set forth in this
Agreement (provided that such costs shall not include any lost profits). For
purposes of this paragraph "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and all
Persons who previously were "Successor Servicers" pursuant to this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller 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 have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information obtained from ABS Net as to its servicing
performance with respect to loans serviced for others, including delinquency
ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery of the Mortgage Loans described on the related
Mortgage Loan Schedule is mandatory from and after the related Closing Date, it
being specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver (i) each of the related
Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans or (iii)
one or more Mortgage Loans otherwise acceptable to the Purchaser on or before
the related Closing Date. The Seller hereby grants to the Purchaser a lien on
and a continuing security interest in each Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by the
Seller of its obligations hereunder, and the Seller agrees that it shall hold
such Mortgage Loans in custody for the Purchaser subject to the Purchaser's (a)
right to reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under
the terms of this Agreement and to require another Mortgage Loan (or Qualified
Substitute Mortgage Loan) to be substituted therefor, and (b) obligation to pay
the Purchase Price for the Mortgage Loans. All rights and remedies of the
Purchaser under this Agreement are distinct from, and cumulative with, any other
rights or remedies under this Agreement or afforded by law or equity and all
such rights and remedies may be exercised concurrently, independently or
successively.]
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Meritage Mortgage Corporation
0000 XX Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
with copies to:
RBMG, Inc.
0000 Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Director of Loan Administration
CC Chief Legal Counsel
For issues of repurchases an additional copy to:
Meritage Mortgage Corporation
0000 Xxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
Attention: Capital Markets
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. 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 (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
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 nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. 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 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser 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 substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. In the event the Purchaser assigns this Agreement, and the
assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. 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 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. 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) 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 without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser 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 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller 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 Seller's behalf,
to personally, by telephone or mail (via electronic means or otherwise), solicit
a Mortgagor under any Mortgage Loan for the purpose of refinancing a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
Notwithstanding the foregoing, it is understood and agreed that the Seller, or
any of its respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio, internet website and television advertisements), shall not
constitute solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Governing Law Jurisdiction; Consent to Service of
Process.
THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
[Signature Page Follows]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
MERITAGE MORTGAGE CORPORATION
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Amended and Restated Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Seller that
state law so allows. If the Mortgage Loan was acquired by the Seller in a
merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to
be delivered the original Mortgage with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such Mortgage has
been dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except with respect to MERS
Designated Loans). The Assignment of Mortgage must be duly recorded only
if recordation is either necessary under applicable law or commonly
required by private institutional mortgage investors in the area where the
Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned to the Purchaser. If the Assignment of Mortgage
is not to be recorded, the Assignment of Mortgage shall be delivered in
blank. If the Mortgage Loan was acquired by the Seller in a merger, the
Assignment of Mortgage must be made by "[Seller], successor by merger to
[name of predecessor]". If the Mortgage Loan was acquired or originated by
the Seller while doing business under another name, the Assignment of
Mortgage must be by "[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or, in the case of a MERS Designated Loan, MERS) with evidence
of recording thereon, or if any such intervening assignment has not been
returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of
mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such intervening assignment, together with (i)
in the case of a delay caused by the public recording office, an Officer's
Certificate of the Seller (or certified by the title company, escrow
agent, or closing attorney) stating that such intervening assignment of
mortgage has been dispatched to the appropriate public recording office
for recordation and that such original recorded intervening assignment of
mortgage or a copy of such intervening assignment of mortgage certified by
the appropriate public recording office to be a true and complete copy of
the original recorded intervening assignment of mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Seller; or (ii) in
the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where
an intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 120 days of the related Closing Date (or 180 days of the related Closing
Date as specified in Subsection 6.03 of the Agreement), an Officer's Certificate
which shall (i) identify the recorded document, (ii) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused by
the public recording office, (iii) state the amount of time generally required
by the applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian; provided, however, that any recorded document shall
in no event be delivered later than one year following the related Closing Date.
An extension of the date specified in clause (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), and [______________],
a [______________] (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party and the Depositor are parties to the
Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party [and Servicer,"] "The
Mortgage Loan Pool--Underwriting Guidelines" [and "The Servicer"] and (ii)
regarding the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties (but in the case of this clause (ii), only to the extent
any untrue statement or omission arose from or is based upon errors or omissions
in the information concerning the Mortgage Loans, the related mortgagors and/or
the related Mortgaged Properties, as applicable, provided to the Depositor or
any affiliate by or on behalf of the Indemnifying Party).
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the Indemnifying
Party, as responsible party and servicer, and [______________].
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates.
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, among the Depositor and the Underwriter, relating to the sale
of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor and the Underwriter and their respective affiliates, and their
respective present and former directors, officers, employees, agents and each
Person, if any, that controls the Depositor, the Underwriter or such affiliate,
within the meaning of either the 1933 Act or the 1934 Act (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages, penalties,
fines, forfeitures or liabilities, joint or several, to which each such
Indemnified Party may become subject, under the 1933 Act, the 1934 Act or
otherwise, to the extent that such losses, claims, damages, penalties, fines,
forfeitures or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement, the Private Placement Memorandum or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other costs, fees, or expenses reasonably incurred and as incurred by
such Indemnified Party in connection with investigating or defending any such
loss, claim, damage, penalty, fine, forfeiture, liability or action. The
Indemnifying Party's liability under this Section 3.1 shall be in addition to
any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
Telephone:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
Telephone:
In the case of the Indemnifying Party:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:
--------------------------------------
Name:
Title:
[UNDERWRITER]
By:
--------------------------------------
Name:
Title:
[INDEMNIFYING PARTY]
By:
--------------------------------------
Name:
Title:
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
Officer of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
(i) Attached hereto as Exhibit 1 is a true, correct and
complete copy of the charter of the Company which is in full force
and effect on the date hereof and which has been in effect without
amendment, waiver, rescission or modification since ___________.
(ii) Attached hereto as Exhibit 2 is a true, correct and
complete copy of the bylaws of the Company which are in effect on
the date hereof and which have been in effect without amendment,
waiver, rescission or modification since ___________.
(iii) Attached hereto as Exhibit 3 is an original certificate
of good standing of the Company issued within ten days of the date
hereof, and no event has occurred since the date thereof which would
impair such standing.
(iv) Attached hereto as Exhibit 4 is a true, correct and
complete copy of the corporate resolutions of the Board of Directors
of the Company authorizing the Company to execute and deliver (a)
the Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of _______ __, 200_ (the "Purchase Agreement"),
by and between Xxxxxx Xxxxxxx Mortgage Capital Inc. (the
"Purchaser") and the Company and (b) the Custodial Agreement, dated
as of _______ __, 200_ (the "Custodial Agreement"), by and among the
Purchaser, the Company, ________________________ (the "Interim
Servicer") and [CUSTODIAN] (the "Custodian"), [and to endorse the
Mortgage Notes and execute the Assignments of Mortgages by original
[or facsimile] signature], and such resolutions are in effect on the
date hereof and have been in effect without amendment, waiver,
rescission or modification since ____________.
(v) Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or compliance
by the Company with the Purchase Agreement, [the sale of the
mortgage loans] or the consummation of the transactions contemplated
by the agreements; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
(vi) Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Purchase Agreement
conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the
charter or by-laws of the Company or, to the best of my knowledge,
the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which it is
subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which it is
bound.
(vii) To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the
Company which, in my judgment, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of
the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted
or in any material liability on the part of the Company or which
would draw into question the validity of the Purchase Agreement, or
the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would
be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
(viii) Each person listed on Exhibit 5 attached hereto who, as
an officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date
hereof in connection with any purchase described in the agreements
set forth above was, at the respective times of such signing and
delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the
office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their
genuine signatures.
(ix) The Company is duly authorized to engage in the
transactions described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: By:
-------------------- ---------------------------
Name:
-------------------------
[Seal] Title: Officer
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting Officer of the Company and that the signature appearing
above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
-------------------- ---------------------------
Name:
-------------------------
[Seal] Title: Officer
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Purchaser"), dated as of _________ __, 200_ (the "Purchase Agreement")
which sale is in the form of whole loans, delivered pursuant to a Custodial
Agreement dated as of _____ __, ____ among the Purchaser, the Company,
________________________ (the "Interim Servicer") and
______________________[CUSTODIAN] (the "Custodial Agreement", and collectively
with the Purchase Agreement, the "Agreements"). Capitalized terms not otherwise
defined herein have the meanings set forth in the Purchase Agreement.
[We] [I] have examined the following documents:
(i) the Purchase Agreement;
(ii) the Custodial Agreement;
(iii) the form of Assignment of Mortgage;
(iv) the form of endorsement of the Mortgage Notes; and
(v) such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
(i) The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of the [United
States] and is qualified to transact business in, and is in
good standing under, the laws of [the state of incorporation].
(ii) The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver the
Agreements and to perform and observe the terms and conditions
of the Agreements.
(iii) The Agreements have been duly authorized, executed and
delivered by the Company, and are the legal, valid and binding
agreement enforceable in accordance with its terms against the
Company, subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and subject
to the application of the rules of equity, including those
respecting the availability of specific performance, none of
which will materially interfere with the realization of the
benefits provided thereunder or with the Purchaser's ownership
of the Mortgage Loans.
(iv) The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
(v) The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
(vi) Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
(vii) Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflict
or will conflict with or results or will result in a breach of
or constitute or will constitute a default under the charter
or by-laws of the Company or, to the best of my knowledge, the
material terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is
bound or to which it is subject, or violates any statute or
order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the
Company is subject or by which it is bound.
(viii) There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements or the
Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company to perform under the terms of the Agreements.
(ix) The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
(x) The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
Except as otherwise set forth in the Agreements, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
--------------------------
--------------------------
--------------------------
Attention:
---------------------------
---------------------------
---------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Amended and Restated Mortgage Loan
Purchase and Warranties Agreement. The Company warrants that the mortgage loans
to be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond
any collateral required to secure advances made by the Association to the
Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
----------------------------
By:
--------------------------
Name:
------------------------
Title:
----------------------
Date:
-------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
----------------------------
By:
--------------------------
Name:
------------------------
Title:
----------------------
Date:
-------------------------
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __, 200_,
and certifies that all notes, mortgages, assignments and other documents in its
possession relating to such Mortgage Loans have been delivered and released to
the Company or its designees, as of the date and time of the sale of such
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. Such release shall be
effective automatically without any further action by any party upon payment in
one or more installments, in immediately available funds, of $_____________, in
accordance with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
--------------------------------
--------------------------------
--------------------------------
By:
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II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
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By:
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Title:
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Date:
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EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of ____________, ________, _______________
("Seller"), as the Seller under (i) that certain Purchase Price and Terms
Agreement, dated as of _________, ____ (the "PPTA"), and (ii) that certain
Amended and Restated Mortgage Loan Purchase and Warrants Agreement, dated as of
_________, ____ (the "Purchase Agreement"), does hereby sell, transfer, assign,
set over and convey to Xxxxxx Xxxxxxx Mortgage Capital, Inc. ("Purchaser") as
the Purchaser under the Agreements (as defined below) without recourse, but
subject to the terms of the Agreements, all right, title and interest of, in and
to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit A (the "Mortgage Loans"), together with the Mortgage Files and the
related Servicing Rights and all rights and obligations arising under the
documents contained therein. Each Mortgage Loan subject to the Agreements was
underwritten in accordance with, and conforms to, the Underwriting Guidelines
attached hereto as Exhibit C. Pursuant to Section 6 of the Purchase Agreement,
the Seller has delivered to the Custodian the documents for each Mortgage Loan
to be purchased as set forth in the Purchase Agreement. The ownership of each
Mortgage Note, Mortgage and the contents of the Mortgage File and Servicing File
is vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or which come into the
possession of the Seller shall immediately vest in the Purchaser and shall be
retained and maintained, in trust, by the Seller at the will of the Purchaser in
a custodial capacity only. The PPTA and the Purchase Agreement shall
collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
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By:
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Name:
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Title:
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Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
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Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a CLTV of greater than ____%; (4) a FICO Score of less than ___; or (5) a
debt-to-income ratio of more than ___%. Each Mortgage Loan has a Mortgage
Interest Rate of at least ___% per annum and an outstanding principal balance of
less than $______. Each Adjustable Rate Mortgage Loan has an Index of [______].
EXHIBIT H
UNDERWRITING GUIDELINES
Exhibit I
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
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:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase Agreement (the "Purchase Agreement"), dated as of [DATE], between the
Assignor, as purchaser (the "Purchaser"), and the Company, as seller, solely
insofar as the Purchase Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the date hereof as if such representations and
warranties were made on the date hereof unless otherwise specifically stated in
such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. 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, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. 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.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By:
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Name:
---------------------------------
Its:
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XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
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Name:
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Its:
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[ ]
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By:
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Name:
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Its:
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EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties as to the Seller and the Mortgage Loans
I. Representations and Warranties Regarding the Seller
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Due Organization and Authority. The Seller is a corporation,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation or formation and has all licenses necessary to carry on its
business as now being conducted and is licensed or is exempt from such licensing
requirement, qualified and in good standing in the states where the 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 Seller. The Seller has
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement has
been duly executed and delivered and constitutes the valid, legal, binding and
enforceable obligation of the Seller, except as enforceability may be limited by
(i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law. All requisite corporate action has been
taken by the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order was required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller or, if required, such consent, approval,
authorization or order have been obtained, prior to the Closing Date for the
sale of the Mortgage Loans from the Seller to the Purchaser (the "Closing
Date");
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or 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 Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws;
(i) Financial Statements. To the extent that such statements are
available, the Seller has delivered to the Purchaser financial statements as to
its last three complete fiscal years and any later quarter ended more than 60
days prior to the execution of this Agreement. All such financial statements
fairly present the pertinent results of operations and changes in financial
position for each of such periods and the financial position at the end of each
such period of the Seller, its parent company and its subsidiaries and have been
prepared in accordance with generally accepted accounting principles of the
United States consistently applied throughout the periods involved, except as
set forth in the notes thereto. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. In
addition, the Seller has delivered information obtained from ABS Net as to its
loan gain and loss experience in respect of foreclosures and its loan
delinquency experience with respect to mortgage loans sold to others during the
immediately preceding three-year period, and, to the Seller's knowledge, all
such information so delivered shall be true and correct in all material
respects. The Seller has completed any forms requested by the Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio as
of the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage (except with respect to MERS Designated Mortgage Loans),
and any other documents required to be delivered with respect to each Mortgage
Loan pursuant to the Custodial Agreement, have been delivered to the Custodian
all in compliance with the specific requirements of the Custodial Agreement;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished pursuant to this Agreement or any Reconstitution Agreement or in
connection with the transactions contemplated hereby (including any
Securitization Transfer or Whole Loan Transfer) contained any untrue statement
of fact or omitted to state a fact necessary to make the statements contained
herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. Immediately prior to each related Closing Date,
the Seller was the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note,
and upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files with respect thereto in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan; and
(q) Credit Reporting. As of the date on which the Seller transferred
servicing of the Mortgage Loan to the Purchaser or its designee (the "Servicing
Transfer Date") the Seller, as servicer, will fully furnish, in accordance with
the Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three of
the credit repositories), on a monthly basis. Additionally, on the Servicing
Transfer Date, the Seller, as servicer, will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Mae Guide Announcement 95-19 and
that for each Mortgage Loan, the Seller, as servicer, agrees it shall report one
of the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
II. Representations and Warranties Regarding Individual Mortgage Loans
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. As of the Servicing Transfer Date, all
payments required to be made up to the related Closing Date for the Mortgage
Loan under the terms of the Mortgage Note, other than payments not yet 30 days
delinquent, have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under the Mortgage Loan
been 30 days or more delinquent at any time since the origination of the
Mortgage Loan. The first Monthly Payment shall be made with respect to the
Mortgage Loan on its related Due Date, all in accordance with the terms of the
related Mortgage Note;
(c) No Outstanding Charges. As of the Servicing Transfer Date, there
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid. The Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly, for the payment of
any amount required under the Mortgage Loan, except for interest accruing from
the date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by one month the
related Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the terms of the Mortgage
Note and Mortgage have not been impaired, waived, altered or modified in any
respect, from the date of origination except by a written instrument which has
been recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. As of the Servicing Transfer Date, pursuant to
the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable insurer against loss by
fire, hazards of extended coverage and such other hazards as are provided by for
in the Xxxxxx Xxx Guides or by Xxxxxxx Mac, as well as all additional
requirements set forth in Section 2.10 of the Interim Servicing Agreement. If
required by the National Flood Insurance Act of 1968, as amended, each Mortgage
Loan is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration as in effect which
policy conforms to Xxxxxxx Mac requirements, as well as all additional
requirements set forth in Section 2.10 of the Interim Servicing Agreement. All
individual insurance policies contain a standard mortgagee clause naming the
Seller and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all applicable
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and abusive
lending laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to prepayment penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements.
Notwithstanding the foregoing, the Seller shall not be responsible for a breach
of a federal, state or local law, other than those governing the origination of
the Mortgage Loan in effect at the time of the Mortgage Loan was originated,
following the Servicing Transfer Date;
(h) No Satisfaction of Mortgage. As of the Servicing Transfer Date,
the Mortgage has not been satisfied, canceled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from the lien
of the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. The
Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. As of the Servicing Transfer Date, no portion of
the Mortgaged Property is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) The lien of current real property taxes and assessments
not yet due and payable as of the Servicing Transfer Date;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the Closing Date, the Seller is the sole owner
of record and holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser, the
Seller will retain the Mortgage Files or any part thereof with respect thereto
not delivered to the Custodian, the Purchaser or the Purchaser's designee, in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Seller has
good, indefeasible and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or if the related Mortgaged Property is located in the state
of Iowa an attorney's opinion, or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance
policy is issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, its successors and assigns, as to the first (with
respect to a First Lien Loan) or second (with respect to a Second Lien Loan)
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (or to the extent a Mortgage Note provides for negative amortization, the
maximum amount of negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (A), (B) and (C) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(q) No Defaults. As of the Servicing Transfer Date, other than
payments due but not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(r) No Mechanics' Liens. As of the Servicing Transfer Date, there
are no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could give
rise to such liens) affecting the related Mortgaged Property which are or may be
liens prior to, or equal or coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date (except for interest only
Mortgage Loans), over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgage Loan is payable on the first day of each month.
Unless stated otherwise on the related Mortgage Loan Schedule, the Mortgage Loan
does not require a balloon payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on legally enforceable forms acceptable in
the secondary mortgage market
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property was lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. As of the Servicing Transfer
Date, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. The Mortgage Loan is fully
funded, and there is no requirement to make any future advances to the related
Mortgagor;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Servicing Transfer Date, there is no proceeding pending or threatened for
the total or partial condemnation of the Mortgaged Property. The Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair. Since the
origination of the Mortgage Loan, there have not been any condemnation
proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. As of the Servicing Transfer Date, the origination, servicing and
collection practices used by the Seller and the Interim Servicer with respect to
the Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of, or under the control of, the Seller
or the Interim Servicer and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Interim Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance, except as
disclosed in the related Mortgage Loan File;
(ll) No Violation of Environmental Laws. As of the Servicing
Transfer Date, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. As of the Servicing Transfer
Date, the Mortgagor has not notified the Seller, and the Seller has no knowledge
of any relief requested or allowed to the Mortgagor under the Servicemembers'
Civil Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, acceptable to the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. As of the Servicing Transfer Date, the Seller
has caused to be fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis;
(ss) Escrow Analysis. As of the Servicing Transfer Date, if
applicable, with respect to each Mortgage, the Seller has within the last twelve
months (unless such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted the amount
of such payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior Servicing. As of the Servicing Transfer Date, each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No Default Under First Lien. As of the Servicing Transfer Date,
with respect to each Second Lien Loan, the related First Lien Loan related
thereto is in full force and effect, and there is no default, breach, violation
or event which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. As of the Servicing Transfer Date,
the Seller has not received a written notice of default of any senior mortgage
loan related to the Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) as of the Servicing Transfer Date, all ground lease rents,
other payments, or assessments that have become due have been paid; and (7) the
use of leasehold estates for residential properties is a widely accepted
practice in the jurisdiction in which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note and any addendums or
riders thereto executed by the related Mortgagor, is identified on the related
Mortgage Loan Schedule. With respect to Mortgage Loans originated prior to
October 1, 2002, no such Prepayment Penalty may be imposed for a term in excess
of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. Notwithstanding the first sentence of this clause (aaa), if a Mortgage Loan
is not considered a High Cost Loan on the related Closing Date because a related
law is not being enforced or is not effective on the related Closing Date due to
judicial or administrative review or litigation and such Mortgage Loan becomes a
High Cost Loan at a later date as a result of such law becoming enforceable or
effective, such Mortgage Loan shall be subject to the automatic repurchase
provisions of Subsection 9.03 within the timeframes set forth therein;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. Each Mortgage Loan is an obligation which is
principally secured by an interest in real property within the meaning of
Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. As of the Servicing Transfer Date, the
Mortgagor has not filed a bankruptcy petition and has not become the subject of
involuntary bankruptcy proceedings and has not consented to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect of
the related Mortgaged Property;
(hhh) No Prior Offer. As of the Closing Date, the Mortgage Loan has
not previously been offered for sale unless (i) notice of such Mortgage Loan
resale has been provided to the Purchaser in writing prior to the commencement
of the Purchaser's due diligence and (ii) the Mortgage Loan was originated
without exception pursuant to the Underwriting Guidelines.
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(kkk) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than 7% of the principal amount of such
Mortgage Loan;
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(mmm) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction."
EXECUTION COPY
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MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
MERITAGE MORTGAGE CORPORATION,
Seller
------------------------------------------------
Dated as of August 1, 2004
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS....
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of August 1, 2004, by and between Xxxxxx Xxxxxxx Mortgage
Capital Inc., a New York corporation, having an office at 1221 Avenue of the
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), and Meritage
Mortgage Corporation, an Oregon corporation, having an office at 0000 XX Xxxxxxx
Xxxx, Xxxxx 000, Xxxx Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain first and second lien, adjustable-rate and fixed-rate B/C
residential mortgage loans (the "Mortgage Loans") on a servicing released basis
as described herein, and which shall be delivered in pools of whole loans (each,
a "Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing by the Interim Servicer and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
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 Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purpose of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i) the value thereof as determined by an appraisal made for the originator
of the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser, and (ii) the purchase price paid for the related Mortgaged Property
by the Mortgagor with the proceeds of the Mortgage Loan.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
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 sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the state in which the Interim Servicer's servicing operations are located or
(iii) the state in which the Custodian's operations are located, are authorized
or obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement as Exhibit 11.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Subsection 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
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.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage loans
having high interest rates, points and/or fees) or (c) categorized as High Cost
pursuant to Appendix E of Standard & Poor's Glossary. For avoidance of doubt,
the parties agree that this definition shall apply to any law in effect at the
time of origination of any related Mortgage Loan.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest or assigns, or any successor to the
Interim Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
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 Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity date; (12) the
first payment date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment was actually applied
to the outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, a code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (24) a code indicating the documentation style
(i.e., full, alternative or reduced); (25) asset verification (Y/N); (26) the
loan credit classification (as described in the Underwriting Guidelines); (27)
whether such Mortgage Loan provides for a Prepayment Penalty and, if applicable,
the Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a High Cost Loan; (39) a code indicating whether
the Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percentage of coverage, if applicable; (43)
Appraised Value; (44) appraisal type; (45) automated valuation model (AVM) if
applicable; (46) appraisal date; (47) with respect to the related Mortgagor, the
debt-to-income ratio; (48) the MERS Identification Number, if applicable; (49) a
field indicating whether such Mortgage Loan is a Home Loan and (50) a field
indicating whether such Mortgage Loan is a leasehold estate. With respect to the
Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; (4) the weighted average maturity of the Mortgage Loans; (5) the
applicable Cut-off Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President or an
Officer and by the Treasurer or the Secretary or one of the Assistant Treasurers
or Assistant Secretaries of the Seller, and delivered to the Purchaser as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, acceptable by the Seller, who had
no interest, direct or indirect, in the Mortgaged Property or in any loan made
on the security thereof, and whose compensation was not affected by the approval
or disapproval of the Mortgage Loan, and such appraiser and the appraisal made
by such appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Servicing Fee: An amount equal to twenty seven ($27) dollars per
Mortgage Loan per month. Such fee shall be payable monthly and shall be
pro-rated for any portion of a month during which the Mortgage Loan is serviced
by the Interim Servicer under the Interim Servicing Agreement, provided the
Transfer Date is greater than 30 days following the related Closing Date.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
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 Seller 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 Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller 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.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: With respect to any Mortgage Loan, the
Standard & Poor's LEVELS(R) Glossary, as may be in effect at the time of
origination of such Mortgage Loan.
Subservicer: Any subservicer which is subservicing any of the
Mortgage Loans pursuant to a Subservicing Agreement. Any subservicer, and any
such subservicer's successors in interest and assigns, shall meet the
qualifications set forth in Subsection 7.02 and be acceptable to the Purchaser
in its sole discretion.
Subservicing Agreement: An agreement, acceptable to the Purchaser in
its sole discretion, between the Interim Servicer and a Subservicer for the
servicing of the related Mortgage Loans.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Interim Servicing Agreement, which date shall not be more than 30 days
following the related Closing Date, unless otherwise agreed upon by the parties
hereto.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (1) all principal received after
the related Cut-off Date, (2) all other recoveries of principal collected on or
after the related Cut-off Date, and (3) all payments of interest on the Mortgage
Loans net of applicable Servicing Fees, if any.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage (except with
respect to MERS Designated Loans), pertaining to each Mortgage Loan, or (b) make
the related Mortgage File available to the Purchaser for examination at such
other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans are unacceptable to the Purchaser for any
reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Interim Servicer pursuant to this Agreement to be appropriately identified
in the Seller's computer system and/or books and records, as appropriate, to
clearly reflect the sale of the related Mortgage Loan to the Purchaser. The
Seller shall cause the Interim Servicer to release from its custody the contents
of any Servicing File retained by it only in accordance with this Agreement or
the Interim Servicing Agreement, except when such release is required in
connection with a repurchase of any such Mortgage Loan pursuant to Subsection
9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Interim Servicer after
the related Cut-off Date on or in connection with a Mortgage Loan shall be
vested in the Purchaser or one or more designees of the Purchaser; provided,
however, that all funds received on or in connection with a Mortgage Loan shall
be received and held by the Seller or the Interim Servicer in trust for the
benefit of the Purchaser or the appropriate designee of the Purchaser, as the
case may be, as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
The Seller shall be or shall cause the Interim Servicer to be
responsible for maintaining, and shall maintain, a complete set of books and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Seller
shall or shall cause the Interim Servicer to maintain in its possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and periodic inspection reports, as required by the Xxxxxx Mae Guides. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller
or the Interim Servicer may be in the form of microfilm or microfiche so long as
the Seller or the Interim Servicer complies with the requirements of the Xxxxxx
Xxx Guides.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
this Agreement within two weeks of their execution, provided, however, that the
Seller shall provide the Custodian, or to such other Person as the Purchaser
shall designate in writing, with a certified true copy of any such document
submitted for recordation within two weeks of its execution, and shall promptly
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 ninety days of its submission for
recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 120 days (or 180 days in connection with public
recording offices located in New York, New Jersey and Pennsylvania), following
the related Closing Date (other than with respect to the Assignments of Mortgage
which shall be delivered to the Custodian in blank and recorded subsequently by
the Purchaser or its designee), and in the event that the Seller does not cure
such failure within 30 days of discovery or receipt of written notification of
such failure from the Purchaser, the related Mortgage Loan shall, upon the
request of the Purchaser, be repurchased by the Seller at the price and in the
manner specified in Subsection 9.03. The foregoing repurchase obligation shall
not apply in the event that the Seller cannot deliver an original document
submitted for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; provided that the Seller shall instead deliver a recording receipt
of such recording office or, if such recording receipt is not available, an
officer's certificate of a servicing officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
related Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or
its designee said officer's certificate.
The Seller shall pay all initial recording fees (except with respect
to MERS Designated Loans), if any, for the assignments of mortgage and any other
fees or costs in transferring all original documents to the Custodian or, upon
written request of the Purchaser, to the Purchaser or the Purchaser's designee.
The Purchaser or the Purchaser's designee shall be responsible for recording the
Assignments of Mortgage and shall be reimbursed by the Seller for the costs
associated therewith pursuant to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer to, have an
internal quality control program that verifies, on a regular basis, the
existence and accuracy of the legal documents, credit documents, property
appraisals, and underwriting decisions. The program shall include evaluating and
monitoring the overall quality of the Seller's loan production and the servicing
activities of the Interim Servicer. The program is to ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors and
omissions by officers, employees, or other authorized persons.
Subsection 6.05 MERS Designated Loan.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the Purchaser as the
Investor and the Custodian as Custodian, and no Person shall be listed as
Interim Funder on the MERS System. In addition on or prior to the related
Closing Date, Seller shall provide the Custodian and the Purchaser with a MERS
report listing the Purchaser as the Investor and the Custodian as Custodian, and
no Person as Interim Funder with respect to each MERS Designated Mortgage Loan.
SECTION 7. Servicing of the Mortgage Loans.
Subsection 7.01 Servicing of the Mortgage Loans; Interim Servicer
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract servicer
of the Mortgage Loans for an interim period pursuant to and in accordance with
the terms and conditions contained in the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein). The
Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
Pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Interim
Servicer shall begin servicing the Mortgage Loans on behalf of the Purchaser and
shall be entitled to a Servicing Fee, if any, with respect to such Mortgage
Loans until the applicable Transfer Date. The Interim Servicer shall conduct
such servicing in accordance with the Interim Servicing Agreement.
Subsection 7.02 Subservicing
The Mortgage Loans may be subserviced by a Subservicer on behalf of
the Seller in accordance with the servicing provisions of the Interim Servicing
Agreement, provided that (i) the Subservicer is a Xxxxxxx Mac seller/servicer in
good standing, and no event has occurred, including but not limited to, a change
in insurance coverage, which would make it unable to comply with the eligibility
requirements for seller/servicers imposed by Xxxxxxx Mac, or which would require
notification to Xxxxxxx Mac and (ii) the Purchaser approves any Subservicer in
writing. The Interim Servicer may perform any of its servicing responsibilities
under the Interim Servicing Agreement or may cause the Subservicer to perform
any such servicing responsibilities on its behalf, but the use by the Interim
Servicer of a Subservicer shall not release the Interim Servicer from any of its
obligations under the Interim Servicing Agreement and the Interim Servicer shall
remain responsible under the Interim Servicing Agreement for all acts and
omissions of a Subservicer as fully as if such acts and omissions were those of
the Interim Servicer. The Interim Servicer shall pay all fees and expenses of
any Subservicer engaged by the Interim Servicer from its own funds.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Interim Servicer to cease all servicing responsibilities related to,
the related Mortgage Loans subject to such Transfer Date. The Transfer Date
shall be the date set forth in the related Purchase Price and Terms Agreement.
On or prior to the applicable Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Seller shall cause the Interim
Servicer to mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall cause the Interim Servicer to provide the Purchaser with copies of all
such related notices.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall cause the Interim Servicer to transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall cause the Interim
Servicer to provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Interim Servicer to forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Interim Servicer's possession relating to
each related Mortgage Loan including the information enumerated in the Interim
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall cause the Interim Servicer to
provide the Purchaser, or its designee, with immediately available funds by wire
transfer in the amount of the net Escrow Payments and suspense balances and all
loss draft balances associated with the related Mortgage Loans. The Seller shall
cause the Interim Servicer to provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in its sole
discretion, of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall cause the
Interim Servicer to wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Interim Servicer.
(e) Payoffs and Assumptions. The Seller shall cause the Interim
Servicer to provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Interim Servicer on the related Mortgage
Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Interim Servicer or the Seller on
each related Mortgage Loan shall be properly applied by the Seller to the
account of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt.
The Seller shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment sufficient information to permit appropriate processing of the payment
by the Purchaser. Any Monthly Payments received by the Seller sixty one (61) or
more days after the Transfer Date will be returned to the related Mortgagor with
instructions to remit to the Purchaser or its servicer. The Seller shall assume
responsibility for notifying the Successor Servicer of the necessary and
appropriate legal application of such Monthly Payments received by the Seller
after the Transfer Date with respect to related Mortgage Loans then known by the
Seller as being in foreclosure or bankruptcy; provided, for purposes of this
Agreement, necessary and appropriate legal application of such Monthly Payments
shall include, but not be limited to, endorsement of a Monthly Payment to the
Purchaser with the particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application instructions and the
Seller shall cause the Interim Servicer to comply with the foregoing
requirements with respect to all Monthly Payments received by the Interim
Servicer after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer
Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage in a Custodial Account or Escrow Account, the Seller shall be
liable for the amount of such shortage. The Seller shall reimburse the
Purchaser for the amount of such shortage within thirty (30) days after
receipt of written demand therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party
shorted by the improper payment application within five (5) Business Days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h) shall
be accompanied by a statement indicating the corresponding Seller and/or
the Purchaser Mortgage Loan identification number and an explanation of
the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall or shall cause the Interim Servicer
to file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall provide copies of such forms to
the Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties incurred by the Purchaser due to the Seller's failure to comply with
this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation or formation and has all licenses necessary to carry on its
business as now being conducted and is licensed or is exempt from such licensing
requirements, qualified and in good standing in the states where the 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 Seller. The Seller has
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement has
been duly executed and delivered and constitutes the valid, legal, binding and
enforceable obligation of the Seller, except as enforceability may be limited by
(i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law. All requisite corporate action has been
taken by the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or 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 Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws;
(i) Financial Statements. To the extent that such statements are
available, the Seller has delivered to the Purchaser financial statements as to
its last three complete fiscal years and any later quarter ended more than 60
days prior to the execution of this Agreement. All such financial statements
fairly present the pertinent results of operations and changes in financial
position for each of such periods and the financial position at the end of each
such period of the Seller, its parent company and its subsidiaries and have been
prepared in accordance with generally accepted accounting principles of the
United States consistently applied throughout the periods involved, except as
set forth in the notes thereto. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. In
addition, the Seller has delivered information obtained from ABS Net as to its
loan gain and loss experience in respect of foreclosures and its loan
delinquency experience with respect to mortgage loans sold to others during the
immediately preceding three-year period, and, to the Seller's knowledge, all
such information so delivered shall be true and correct in all material
respects. The Seller has completed any forms requested by the Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage (except with respect to MERS Designated Mortgage Loans),
and any other documents required to be delivered with respect to each Mortgage
Loan pursuant to the Custodial Agreement, shall be delivered to the Custodian
all in compliance with the specific requirements of the Custodial Agreement.
With respect to each Mortgage Loan, the Seller will be in possession of a
complete Mortgage File in compliance with Exhibit A hereto, except for such
documents as will be delivered to the Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. Immediately prior to each related Closing Date,
the Seller is the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note,
and upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files with respect thereto in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Credit Reporting. The Seller, as servicer, will fully furnish,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis.
Additionally, the Seller, as servicer, will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and
that for each Mortgage Loan, the Seller, as servicer, agrees it shall report one
of the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date, all in
accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is earlier, to
the day which precedes by one month the related Due Date of the first
installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided by for in the Xxxxxx Mae Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Interim Servicing Agreement. If required by the National Flood Insurance Act
of 1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration as in effect which policy conforms to Xxxxxxx Mac requirements,
as well as all additional requirements set forth in Section 2.10 of the Interim
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all applicable
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and abusive
lending laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to prepayment penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. No portion of the Mortgaged Property is used for
commercial purposes, and since the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or if the related Mortgaged Property is located in the state
of Iowa an attorney's opinion, or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance
policy is issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, its successors and assigns, as to the first (with
respect to a First Lien Loan) or second (with respect to a Second Lien Loan)
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (or to the extent a Mortgage Note provides for negative amortization, the
maximum amount of negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (A), (B) and (C) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date (except for interest only
Mortgage Loans), over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgage Loan is payable on the first day of each month.
Unless stated otherwise on the related Mortgage Loan Schedule, the Mortgage Loan
does not require a balloon payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on legally enforceable forms acceptable in
the secondary mortgage market;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. The Mortgage Loan is fully
funded, and there is no requirement to make any future advances to the related
Mortgagor;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. Since the origination of the
Mortgage Loan, there have not been any condemnation proceedings with respect to
the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Interim Servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Interim Servicer and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Interim Servicer executed and delivered any and
all notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance, except as
disclosed in the related Mortgage Loan File;
(ll) No Violation of Environmental Laws. To the best of the Seller's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Servicemembers' Civil Relief Act or other
similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, acceptable to the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. The Seller has caused to be fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and unfavorable)
on its borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis;
(ss) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note and any addendums or
riders thereto executed by the related Mortgagor, is identified on the related
Mortgage Loan Schedule. With respect to Mortgage Loans originated prior to
October 1, 2002, no such Prepayment Penalty may be imposed for a term in excess
of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. Notwithstanding the first sentence of this clause (aaa), if a Mortgage Loan
is not considered a High Cost Loan on the related Closing Date because a related
law is not being enforced or is not effective on the related Closing Date due to
judicial or administrative review or litigation and such Mortgage Loan becomes a
High Cost Loan at a later date as a result of such law becoming enforceable or
effective, such Mortgage Loan shall be subject to the automatic repurchase
provisions of Subsection 9.03 within the timeframes set forth therein;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. Each Mortgage Loan is an obligation which
is principally secured by an interest in real property within the meaning of
Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. The Mortgagor has not filed a bankruptcy
petition and has not become the subject of involuntary bankruptcy proceedings
and has not consented to the filing of a bankruptcy proceeding against it or to
a receiver being appointed in respect of the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not previously been
offered for sale unless (i) notice of such Mortgage Loan resale has been
provided to the Purchaser in writing prior to the commencement of the
Purchaser's due diligence and (ii) the Mortgage Loan was originated without
exception pursuant to the Underwriting Guidelines;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(kkk) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than 7% of the principal amount of such
Mortgage Loan;
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(mmm) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, 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 Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Xxxxxxxxx (xx), (xx), (xxx), (xxx), (xxx), (xxx), (xxx),
(kkk), (lll) and (mmm) of Subsection 9.02, the Seller shall repurchase such
Mortgage Loan at the Repurchase Price. In the event that a breach shall involve
any representation or warranty set forth in Subsection 9.01, and such breach
cannot be cured within 60 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans affected by such breach
shall, at the Purchaser's option, be repurchased by the Seller at the Repurchase
Price. However, if the breach shall involve a representation or warranty set
forth in Subsection 9.02 (except as provided in the second sentence of this
paragraph with respect to certain breaches for which no substitution is
permitted) and the Seller discovers or receives notice of any such breach within
120 days of the related Closing Date, the Seller shall, at the Purchaser's
option and provided that the Seller has a Qualified Substitute Mortgage Loan,
rather than repurchase the Mortgage Loan as provided above, remove such Mortgage
Loan (a "Deleted Mortgage Loan") and substitute in its place a Qualified
Substitute Mortgage Loan or Loans, provided that any such substitution shall be
effected not later than 120 days after the related Closing Date. If the Seller
has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient
Mortgage Loan at the Repurchase Price. Any repurchase of a Mortgage Loan or
Loans pursuant to the foregoing provisions of this Subsection 9.03 shall be
accomplished by either (a) if the Interim Servicing Agreement has been entered
into and is in effect, deposit in the Custodial Account of the amount of the
Repurchase Price for distribution to the Purchaser on the next scheduled
Remittance Date, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution or (b) if the Interim Servicing Agreement has not been
entered into or is no longer in effect, by direct remittance of the Repurchase
Price to the Purchaser or its designee in accordance with the Purchaser's
instructions.
Three (3) days prior to the repurchase of any Mortgage Loan as set
forth above, the Purchaser, the Seller and an independent third party bailee
shall arrange for the reassignment of the repurchased Mortgage Loan and the
related Servicing Rights to the Seller and the delivery to such independent
third party bailee, pursuant to a bailee agreement mutually acceptable to the
Purchaser, related Seller and such independent third party bailee, the Mortgage
Loan Documents held by the Purchaser or its designee relating to the repurchased
Mortgage Loan. Within three (3) Business Days of repurchase, but in no instance
later than the related Transfer Date, all Mortgage Files shall be released to
Meritage Mortgage Corporation, 0000 Xxxxxxxxx Xxx, Xxxxxxxxxxxx, XX 00000, Attn:
Capital Markets. Upon such repurchase, the related Mortgage Loan Schedule shall
be amended to reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Interim Servicer to remit directly to the Purchaser, or its designee
in accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller representations and warranties contained
in this Agreement or any Reconstitution Agreement. It is understood and agreed
that the obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03 and in
Subsection 14.01 constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. If the related Mortgagor is 30 days or more delinquent with respect to
the Mortgage Loan's first Monthly Payment either (i) after origination of such
Mortgage Loan, or (ii) after the related Closing Date, the Seller, at the
Purchaser's option, shall repurchase such Mortgage Loan from the Purchaser at a
price equal to the Repurchase Price. The Seller shall repurchase such delinquent
Mortgage Loan within thirty (30) days of such request, provided notification in
accordance with Section 17 is given to the Seller within 180 days of the
applicable Closing Date.
Subsection 9.05 Premium Recapture. With respect to any Mortgage Loan
without prepayment penalties that prepays in full during the first six months
following the related Closing Date, and with respect to any Mortgage Loan that
is repurchased pursuant to Subsection 9.03, the Seller shall pay the Purchaser,
within three (3) Business Days after such prepayment in full or repurchase, an
amount equal to the excess of the Purchase Price Percentage for such Mortgage
Loan over par, multiplied by the outstanding principal balance of such Mortgage
Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At both the Purchaser's and
Seller's option, each Closing shall be either: by telephone, confirmed by letter
or wire as the parties shall agree, or conducted in person, at such place as the
parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser in a mutually acceptable
electronic format a listing on a loan-level basis of the necessary
information to compute the Purchase Price of the Mortgage Loans delivered
on such Closing Date (including accrued interest), and prepare a Mortgage
Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Interim Servicer under the Interim Servicing
Agreement (with respect to each Mortgage Loan for an interim period, as
specified therein) 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 or an Event of
Default under the Interim Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) the Interim Servicing Agreement, dated as of the
initial Cut-off Date (to be executed and delivered only for
the initial Closing Date);
(3) with respect to the initial Closing Date, the
Custodial Agreement, dated as of the initial Cut-off Date;
(4) the related Mortgage Loan Schedule (one copy to be
attached to the Custodian's counterpart of the Custodial
Agreement in connection with the initial Closing Date, and one
copy to be attached to the related Assignment and Conveyance
as the Mortgage Loan Schedule thereto);
(5) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(6) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Seller, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(7) with respect to the initial Closing Date, an Opinion
of Counsel of the Seller (who may be an employee of the
Seller), substantially in the form of Exhibit D hereto
("Opinion of Counsel of the Seller"); with respect to
subsequent Closing Dates, an Opinion of Counsel of the Seller
upon request of the Purchaser;
(8) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), substantially in the form of an exhibit to the
Custodial Agreement(s);
(9) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(10) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by the
Seller by merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
(11) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto;
(12) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance; and
(13) a MERS Report reflecting the Purchaser as Investor,
the Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(ii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iii) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers, provided that the servicing shall be
transferred from the Seller to the successor servicer of Purchaser's
choice prior to the creation of any REMICs.
For up to six (6) transfers, the Seller agrees to execute in
connection with any Agency Transfer, any and all pool purchase contracts, and/or
agreements reasonably acceptable to the Seller among the Purchaser, the Seller
or Xxxxxxx Mac (as the case may be) and any servicer in connection with a Whole
Loan Transfer, a seller's warranties and servicing agreement or a participation
and servicing agreement in form and substance reasonably acceptable to the
parties, and in connection with a Securitization Transfer, a pooling and
servicing agreement in form and substance reasonably acceptable to the parties
or an Assignment and Recognition Agreement substantially in the form attached
hereto as Exhibit I (collectively, the agreements referred to herein as
designated, the "Reconstitution Agreements"), together with an opinion of
counsel with respect to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate
reasonably with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in Subsections 9.01 and
9.02 as of the settlement or closing date in connection with such Reconstitution
(each, a "Reconstitution Date"), such restatement to be in the form of Exhibit B
to Exhibit I hereto, or make the representations and warranties set forth in the
related selling/servicing guide of the servicer or issuer, as the case may be,
or such representations or warranties as may be required by any rating agency or
prospective purchaser of the related securities or such Mortgage Loans in
connection with such Reconstitution. The Seller shall provide to such servicer
or issuer, as the case may be, and any other participants or purchasers in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller or the
Interim Servicer as are reasonably believed necessary by the Purchaser or any
such other participant; and (iii) to execute, deliver and satisfy all conditions
set forth in any indemnity agreement required by the Purchaser or any such
participant, including, without limitation, an Indemnification and Contribution
Agreement in substantially the form attached hereto as Exhibit B. Moreover, the
Seller agrees to cooperate with all reasonable requests made by the Purchaser to
effect such Reconstitution Agreements. The Seller shall indemnify the Purchaser,
each affiliate of the Purchaser participating in the Reconstitution and each
Person who controls the Purchaser or such affiliate and their respective present
and former directors, officers, employees and agents, and hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that each of them may sustain arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
information provided by or on behalf of the Seller regarding the Seller, the
Mortgage Loans or the Underwriting Guidelines set forth in any offering document
prepared in connection with any Reconstitution. For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement.
In the event the Purchaser has elected to have the Seller or the
Interim Servicer hold record title to the Mortgages, prior to the Reconstitution
Date, the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the Interim
Servicer, as applicable, acceptable to the prospective purchaser or trustee, as
applicable, for each Mortgage Loan that is part of the Reconstitution and shall
pay all preparation and recording costs associated therewith. In connection with
the Reconstitution, the Seller shall execute or shall cause the Interim Servicer
to execute each assignment of mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the prospective
purchaser or trustee, as applicable, upon the Seller's receipt thereof.
Additionally, the Seller shall prepare and execute or shall cause the Interim
Servicer to execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses (including legal fees and expenses incurred
in connection with the enforcement of the Seller's indemnification obligation
under this Subsection 14.01) and related costs, judgments, and any other costs,
fees and expenses that such parties may sustain in any way related to the
failure of the Seller to perform its duties and the Interim Servicer to service
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13 or any breach of
any of Seller's representations, warranties and covenants set forth in this
Agreement (provided that such costs shall not include any lost profits). For
purposes of this paragraph "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and all
Persons who previously were "Successor Servicers" pursuant to this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller 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 have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information obtained from ABS Net as to its servicing
performance with respect to loans serviced for others, including delinquency
ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery of the Mortgage Loans described on the related
Mortgage Loan Schedule is mandatory from and after the related Closing Date, it
being specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver (i) each of the related
Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans or (iii)
one or more Mortgage Loans otherwise acceptable to the Purchaser on or before
the related Closing Date. The Seller hereby grants to the Purchaser a lien on
and a continuing security interest in each Mortgage Loan and each document and
instrument evidencing each such Mortgage Loan to secure the performance by the
Seller of its obligations hereunder, and the Seller agrees that it shall hold
such Mortgage Loans in custody for the Purchaser subject to the Purchaser's (a)
right to reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under
the terms of this Agreement and to require another Mortgage Loan (or Qualified
Substitute Mortgage Loan) to be substituted therefor, and (b) obligation to pay
the Purchase Price for the Mortgage Loans. All rights and remedies of the
Purchaser under this Agreement are distinct from, and cumulative with, any other
rights or remedies under this Agreement or afforded by law or equity and all
such rights and remedies may be exercised concurrently, independently or
successively.]
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Meritage Mortgage Corporation
0000 XX Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
with copies to:
RBMG, Inc.
0000 Xxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Director of Loan Administration
CC Chief Legal Counsel
For issues of repurchases an additional copy to:
Meritage Mortgage Corporation
0000 Xxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
Attention: Capital Markets
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. 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 (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
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 nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. 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 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser 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 substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. In the event the Purchaser assigns this Agreement, and the
assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. 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 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. 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) 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 without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser 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 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller 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 Seller's behalf,
to personally, by telephone or mail (via electronic means or otherwise), solicit
a Mortgagor under any Mortgage Loan for the purpose of refinancing a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
Notwithstanding the foregoing, it is understood and agreed that the Seller, or
any of its respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio, internet website and television advertisements), shall not
constitute solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Governing Law Jurisdiction; Consent to Service of
Process.
THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
[Signature Page Follows]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
MERITAGE MORTGAGE CORPORATION
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Seller that
state law so allows. If the Mortgage Loan was acquired by the Seller in a
merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to
be delivered the original Mortgage with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such Mortgage has
been dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except with respect to MERS
Designated Loans). The Assignment of Mortgage must be duly recorded only
if recordation is either necessary under applicable law or commonly
required by private institutional mortgage investors in the area where the
Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned to the Purchaser. If the Assignment of Mortgage
is not to be recorded, the Assignment of Mortgage shall be delivered in
blank. If the Mortgage Loan was acquired by the Seller in a merger, the
Assignment of Mortgage must be made by "[Seller], successor by merger to
[name of predecessor]". If the Mortgage Loan was acquired or originated by
the Seller while doing business under another name, the Assignment of
Mortgage must be by "[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or, in the case of a MERS Designated Loan, MERS) with evidence
of recording thereon, or if any such intervening assignment has not been
returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of
mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such intervening assignment, together with (i)
in the case of a delay caused by the public recording office, an Officer's
Certificate of the Seller (or certified by the title company, escrow
agent, or closing attorney) stating that such intervening assignment of
mortgage has been dispatched to the appropriate public recording office
for recordation and that such original recorded intervening assignment of
mortgage or a copy of such intervening assignment of mortgage certified by
the appropriate public recording office to be a true and complete copy of
the original recorded intervening assignment of mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Seller; or (ii) in
the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where
an intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 120 days of the related Closing Date (or 180 days of the related Closing
Date as specified in Subsection 6.03 of the Agreement), an Officer's Certificate
which shall (i) identify the recorded document, (ii) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused by
the public recording office, (iii) state the amount of time generally required
by the applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian; provided, however, that any recorded document shall
in no event be delivered later than one year following the related Closing Date.
An extension of the date specified in clause (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), and [______________],
a [______________] (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party and the Depositor are parties to the
Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party [and Servicer,"] "The
Mortgage Loan Pool--Underwriting Guidelines" [and "The Servicer"] and (ii)
regarding the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties (but in the case of this clause (ii), only to the extent
any untrue statement or omission arose from or is based upon errors or omissions
in the information concerning the Mortgage Loans, the related mortgagors and/or
the related Mortgaged Properties, as applicable, provided to the Depositor or
any affiliate by or on behalf of the Indemnifying Party).
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the Indemnifying
Party, as responsible party and servicer, and [______________].
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates.
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, among the Depositor and the Underwriter, relating to the sale
of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor and the Underwriter and their respective affiliates, and their
respective present and former directors, officers, employees, agents and each
Person, if any, that controls the Depositor, the Underwriter or such affiliate,
within the meaning of either the 1933 Act or the 1934 Act (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages, penalties,
fines, forfeitures or liabilities, joint or several, to which each such
Indemnified Party may become subject, under the 1933 Act, the 1934 Act or
otherwise, to the extent that such losses, claims, damages, penalties, fines,
forfeitures or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement, the Private Placement Memorandum or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other costs, fees, or expenses reasonably incurred and as incurred by
such Indemnified Party in connection with investigating or defending any such
loss, claim, damage, penalty, fine, forfeiture, liability or action. The
Indemnifying Party's liability under this Section 3.1 shall be in addition to
any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
Telephone:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
Telephone:
In the case of the Indemnifying Party:
[ ]
______________
[ ]
______________
[ ]
______________
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:
--------------------------------------
Name:
Title:
[UNDERWRITER]
By:
--------------------------------------
Name:
Title:
[INDEMNIFYING PARTY]
By:
--------------------------------------
Name:
Title:
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
Officer of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
(i) Attached hereto as Exhibit 1 is a true, correct and
complete copy of the charter of the Company which is in full force
and effect on the date hereof and which has been in effect without
amendment, waiver, rescission or modification since ___________.
(ii) Attached hereto as Exhibit 2 is a true, correct and
complete copy of the bylaws of the Company which are in effect on
the date hereof and which have been in effect without amendment,
waiver, rescission or modification since ___________.
(iii) Attached hereto as Exhibit 3 is an original certificate
of good standing of the Company issued within ten days of the date
hereof, and no event has occurred since the date thereof which would
impair such standing.
(iv) Attached hereto as Exhibit 4 is a true, correct and
complete copy of the corporate resolutions of the Board of Directors
of the Company authorizing the Company to execute and deliver (a)
the Mortgage Loan Purchase and Warranties Agreement, dated as of
_______ __, 200_ (the "Purchase Agreement"), by and between Xxxxxx
Xxxxxxx Mortgage Capital Inc. (the "Purchaser") and the Company and
(b) the Custodial Agreement, dated as of _______ __, 200_ (the
"Custodial Agreement"), by and among the Purchaser, the Company,
________________________ (the "Interim Servicer") and [CUSTODIAN]
(the "Custodian"), [and to endorse the Mortgage Notes and execute
the Assignments of Mortgages by original [or facsimile] signature],
and such resolutions are in effect on the date hereof and have been
in effect without amendment, waiver, rescission or modification
since ____________.
(v) Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or compliance
by the Company with the Purchase Agreement, [the sale of the
mortgage loans] or the consummation of the transactions contemplated
by the agreements; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
(vi) Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Purchase Agreement
conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the
charter or by-laws of the Company or, to the best of my knowledge,
the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which it is
subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which it is
bound.
(vii) To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the
Company which, in my judgment, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of
the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted
or in any material liability on the part of the Company or which
would draw into question the validity of the Purchase Agreement, or
the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would
be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
(viii) Each person listed on Exhibit 5 attached hereto who, as
an officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date
hereof in connection with any purchase described in the agreements
set forth above was, at the respective times of such signing and
delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the
office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their
genuine signatures.
(ix) The Company is duly authorized to engage in the
transactions described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: By:
-------------------- ---------------------------
Name:
-------------------------
[Seal] Title: Officer
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting Officer of the Company and that the signature appearing
above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
-------------------- ---------------------------
Name:
-------------------------
[Seal] Title: Officer
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
-------------------------- ------------------------ ----------------------------
-------------------------- ------------------------ ----------------------------
-------------------------- ------------------------ ----------------------------
-------------------------- ------------------------ ----------------------------
-------------------------- ------------------------ ----------------------------
-------------------------- ------------------------ ----------------------------
-------------------------- ------------------------ ----------------------------
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser"), dated as of
_________ __, 200_ (the "Purchase Agreement") which sale is in the form of whole
loans, delivered pursuant to a Custodial Agreement dated as of _____ __, ____
among the Purchaser, the Company, ________________________ (the "Interim
Servicer") and ______________________[CUSTODIAN] (the "Custodial Agreement", and
collectively with the Purchase Agreement, the "Agreements"). Capitalized terms
not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
(i) the Purchase Agreement;
(ii) the Custodial Agreement;
(iii) the form of Assignment of Mortgage;
(iv) the form of endorsement of the Mortgage Notes; and
(v) such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
(i) The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of the [United
States] and is qualified to transact business in, and is in
good standing under, the laws of [the state of incorporation].
(ii) The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver the
Agreements and to perform and observe the terms and conditions
of the Agreements.
(iii) The Agreements have been duly authorized, executed and
delivered by the Company, and are the legal, valid and binding
agreement enforceable in accordance with its terms against the
Company, subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and subject
to the application of the rules of equity, including those
respecting the availability of specific performance, none of
which will materially interfere with the realization of the
benefits provided thereunder or with the Purchaser's ownership
of the Mortgage Loans.
(iv) The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
(v) The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
(vi) Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
(vii) Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflict
or will conflict with or results or will result in a breach of
or constitute or will constitute a default under the charter
or by-laws of the Company or, to the best of my knowledge, the
material terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is
bound or to which it is subject, or violates any statute or
order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the
Company is subject or by which it is bound.
(viii) There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements or the
Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company to perform under the terms of the Agreements.
(ix) The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
(x) The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
Except as otherwise set forth in the Agreements, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
---------------------------
---------------------------
---------------------------
Attention:
---------------------------
---------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Mortgage Loan Purchase and
Warranties Agreement. The Company warrants that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
------------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
------------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Mortgage Loan Purchase
and Warranties Agreement, dated as of ______ __, 200_, and certifies that all
notes, mortgages, assignments and other documents in its possession relating to
such Mortgage Loans have been delivered and released to the Company or its
designees, as of the date and time of the sale of such Mortgage Loans to Xxxxxx
Xxxxxxx Mortgage Capital Inc. Such release shall be effective automatically
without any further action by any party upon payment in one or more
installments, in immediately available funds, of $_____________, in accordance
with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
--------------------------------
--------------------------------
--------------------------------
By:
-----------------------------
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
-----------------------------
By:
-----------------------------
Title:
--------------------------
Date:
---------------------------
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of ____________, ________, _______________
("Seller"), as the Seller under (i) that certain Purchase Price and Terms
Agreement, dated as of _________, ____ (the "PPTA"), and (ii) that certain
Mortgage Loan Purchase and Warrants Agreement, dated as of _________, ____ (the
"Purchase Agreement"), does hereby sell, transfer, assign, set over and convey
to Xxxxxx Xxxxxxx Mortgage Capital, Inc. ("Purchaser") as the Purchaser under
the Agreements (as defined below) without recourse, but subject to the terms of
the Agreements, all right, title and interest of, in and to the Mortgage Loans
listed on the Mortgage Loan Schedule attached hereto as Exhibit A (the "Mortgage
Loans"), together with the Mortgage Files and the related Servicing Rights and
all rights and obligations arising under the documents contained therein. Each
Mortgage Loan subject to the Agreements was underwritten in accordance with, and
conforms to, the Underwriting Guidelines attached hereto as Exhibit C. Pursuant
to Section 6 of the Purchase Agreement, the Seller has delivered to the
Custodian the documents for each Mortgage Loan to be purchased as set forth in
the Purchase Agreement. The ownership of each Mortgage Note, Mortgage and the
contents of the Mortgage File and Servicing File is vested in the Purchaser and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Seller at the will of the Purchaser in a custodial capacity only.
The PPTA and the Purchase Agreement shall collectively be referred to as the
"Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
------------------------
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
----------------------------------
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a CLTV of greater than ____%; (4) a FICO Score of less than ___; or (5) a
debt-to-income ratio of more than ___%. Each Mortgage Loan has a Mortgage
Interest Rate of at least ___% per annum and an outstanding principal balance of
less than $______. Each Adjustable Rate Mortgage Loan has an Index of [______].
EXHIBIT H
UNDERWRITING GUIDELINES
Exhibit I
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
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:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase Agreement (the "Purchase Agreement"), dated as of [DATE], between the
Assignor, as purchaser (the "Purchaser"), and the Company, as seller, solely
insofar as the Purchase Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the date hereof as if such representations and
warranties were made on the date hereof unless otherwise specifically stated in
such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. 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, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. 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.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By:
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Name:
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Its:
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XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
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Name:
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Its:
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[ ]
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By:
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Name:
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Its:
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EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties as to the Seller and the Mortgage Loans
I. Representations and Warranties Regarding the Seller
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Due Organization and Authority. The Seller is a corporation,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation or formation and has all licenses necessary to carry on its
business as now being conducted and is licensed or is exempt from such licensing
requirement, qualified and in good standing in the states where the 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 Seller. The Seller has
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement has
been duly executed and delivered and constitutes the valid, legal, binding and
enforceable obligation of the Seller, except as enforceability may be limited by
(i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law. All requisite corporate action has been
taken by the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order was required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller or, if required, such consent, approval,
authorization or order have been obtained, prior to the Closing Date for the
sale of the Mortgage Loans from the Seller to the Purchaser (the "Closing
Date");
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or 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 Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws;
(i) Financial Statements. To the extent that such statements are
available, the Seller has delivered to the Purchaser financial statements as to
its last three complete fiscal years and any later quarter ended more than 60
days prior to the execution of this Agreement. All such financial statements
fairly present the pertinent results of operations and changes in financial
position for each of such periods and the financial position at the end of each
such period of the Seller, its parent company and its subsidiaries and have been
prepared in accordance with generally accepted accounting principles of the
United States consistently applied throughout the periods involved, except as
set forth in the notes thereto. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. In
addition, the Seller has delivered information obtained from ABS Net as to its
loan gain and loss experience in respect of foreclosures and its loan
delinquency experience with respect to mortgage loans sold to others during the
immediately preceding three-year period, and, to the Seller's knowledge, all
such information so delivered shall be true and correct in all material
respects. The Seller has completed any forms requested by the Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio as
of the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage (except with respect to MERS Designated Mortgage Loans),
and any other documents required to be delivered with respect to each Mortgage
Loan pursuant to the Custodial Agreement, have been delivered to the Custodian
all in compliance with the specific requirements of the Custodial Agreement;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished pursuant to this Agreement or any Reconstitution Agreement or in
connection with the transactions contemplated hereby (including any
Securitization Transfer or Whole Loan Transfer) contained any untrue statement
of fact or omitted to state a fact necessary to make the statements contained
herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. Immediately prior to each related Closing Date,
the Seller was the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note,
and upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files with respect thereto in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan; and
(q) Credit Reporting. As of the date on which the Seller transferred
servicing of the Mortgage Loan to the Purchaser or its designee (the "Servicing
Transfer Date") the Seller, as servicer, will fully furnish, in accordance with
the Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three of
the credit repositories), on a monthly basis. Additionally, on the Servicing
Transfer Date, the Seller, as servicer, will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and
that for each Mortgage Loan, the Seller, as servicer, agrees it shall report one
of the following statuses each month as follows: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
II. Representations and Warranties Regarding Individual Mortgage Loans
The Seller hereby represents and warrants to the Purchaser that as
of the closing date for the securitization (the "Securitization Closing Date")
or such other date specified herein:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, all payments required to be made up
to the related Closing Date for the Mortgage Loan under the terms of the
Mortgage Note, other than payments not yet 30 days delinquent, have been made
and credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or more
delinquent at any time since the origination of the Mortgage Loan. The first
Monthly Payment shall be made with respect to the Mortgage Loan on its related
Due Date, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, there are no defaults in
complying with the terms of the Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid,
or an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid. The Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the related Due
Date of the first installment of principal and interest;
(d) Original Terms Unmodified. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the terms of the Mortgage
Note and Mortgage have not been impaired, waived, altered or modified in any
respect, from the date of origination except by a written instrument which has
been recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, pursuant to the terms of the
Mortgage, all buildings or other improvements upon the Mortgaged Property are
insured by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are provided by for in the Xxxxxx
Mae Guides or by Xxxxxxx Mac, as well as all additional requirements set forth
in Section 2.10 of the Interim Servicing Agreement. If required by the National
Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration as in effect which policy conforms to Xxxxxxx
Mac requirements, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all applicable
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and abusive
lending laws applicable to the Mortgage Loan, including, without limitation, any
provisions relating to prepayment penalties, have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements.
Notwithstanding the foregoing, the Seller shall not be responsible for a breach
of a federal, state or local law, other than those governing the origination of
the Mortgage Loan in effect at the time of the Mortgage Loan was originated,
following the Servicing Transfer Date;
(h) No Satisfaction of Mortgage. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, no portion of the Mortgaged
Property is used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not be
considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) The lien of current real property taxes and assessments
not yet due and payable as of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the Closing Date, the Seller is the sole owner
of record and holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser, the
Seller will retain the Mortgage Files or any part thereof with respect thereto
not delivered to the Custodian, the Purchaser or the Purchaser's designee, in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Seller has
good, indefeasible and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or if the related Mortgaged Property is located in the state
of Iowa an attorney's opinion, or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance
policy is issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, its successors and assigns, as to the first (with
respect to a First Lien Loan) or second (with respect to a Second Lien Loan)
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (or to the extent a Mortgage Note provides for negative amortization, the
maximum amount of negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (A), (B) and (C) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The Seller, its successor and assigns, are the sole insureds of such lender's
title insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy,
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(q) No Defaults. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, other than payments due but not yet
30 days or more delinquent, there is no default, breach, violation or event
which would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(r) No Mechanics' Liens. As of the Closing Date, and to the Seller's
knowledge as of the Servicing Transfer Date, there are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date (except for interest only
Mortgage Loans), over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgage Loan is payable on the first day of each month.
Unless stated otherwise on the related Mortgage Loan Schedule, the Mortgage Loan
does not require a balloon payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on legally enforceable forms acceptable in
the secondary mortgage market;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property was lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. As of the Servicing Transfer
Date, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered under the Custodial Agreement for each
Mortgage Loan have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. The Mortgage Loan is fully
funded, and there is no requirement to make any future advances to the related
Mortgagor;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Closing Date, and to the Seller's knowledge as of the Servicing Transfer
Date, there is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. Since the origination of the
Mortgage Loan, there have not been any condemnation proceedings with respect to
the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. As of the Servicing Transfer Date, the origination, servicing and
collection practices used by the Seller and the Interim Servicer with respect to
the Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of, or under the control of, the Seller
or the Interim Servicer and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Interim Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance, except as
disclosed in the related Mortgage Loan File;
(ll) No Violation of Environmental Laws. As of the Closing Date, and
to the best of the Seller's knowledge as of the Servicing Transfer Date, there
is no pending action or proceeding directly involving the Mortgaged Property in
which compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with respect
to the Mortgage Property; and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. As of the Servicing Transfer
Date, the Mortgagor has not notified the Seller, and the Seller has no knowledge
of any relief requested or allowed to the Mortgagor under the Servicemembers'
Civil Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, acceptable to the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. As of the Servicing Transfer Date, the Seller
has caused to be fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis;
(ss) Escrow Analysis. As of the Servicing Transfer Date, if
applicable, with respect to each Mortgage, the Seller has within the last twelve
months (unless such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted the amount
of such payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior Servicing. As of the Servicing Transfer Date, each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No Default Under First Lien. As of the Servicing Transfer Date,
with respect to each Second Lien Loan, the related First Lien Loan related
thereto is in full force and effect, and there is no default, breach, violation
or event which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. As of the Servicing Transfer Date,
the Seller has not received a written notice of default of any senior mortgage
loan related to the Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) as of the Closing Date, and to the Seller's knowledge as of
the Servicing Transfer Date, all ground lease rents, other payments, or
assessments that have become due have been paid; and (7) the use of leasehold
estates for residential properties is a widely accepted practice in the
jurisdiction in which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note and any addendums or
riders thereto executed by the related Mortgagor, is identified on the related
Mortgage Loan Schedule. With respect to Mortgage Loans originated prior to
October 1, 2002, no such Prepayment Penalty may be imposed for a term in excess
of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. Notwithstanding the first sentence of this clause (aaa), if a Mortgage Loan
is not considered a High Cost Loan on the related Closing Date because a related
law is not being enforced or is not effective on the related Closing Date due to
judicial or administrative review or litigation and such Mortgage Loan becomes a
High Cost Loan at a later date as a result of such law becoming enforceable or
effective, such Mortgage Loan shall be subject to the automatic repurchase
provisions of Subsection 9.03 within the timeframes set forth therein;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. Each Mortgage Loan is an obligation which
is principally secured by an interest in real property within the meaning of
Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. As of the Closing Date, and to the
Seller's knowledge as of the Servicing Transfer Date, the Mortgagor has not
filed a bankruptcy petition and has not become the subject of involuntary
bankruptcy proceedings and has not consented to the filing of a bankruptcy
proceeding against it or to a receiver being appointed in respect of the related
Mortgaged Property;
(hhh) No Prior Offer. As of the Closing Date, the Mortgage Loan has
not previously been offered for sale unless (i) notice of such Mortgage Loan
resale has been provided to the Purchaser in writing prior to the commencement
of the Purchaser's due diligence and (ii) the Mortgage Loan was originated
without exception pursuant to the Underwriting Guidelines;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(kkk) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than 7% of the principal amount of such
Mortgage Loan;
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(mmm) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
EXHIBIT Q
WILMINGTON FINANCE AGREEMENTS
EXECUTION COPY
================================================================================
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
Purchaser
WILMINGTON FINANCE INC.,
Seller
AIG FEDERAL SAVINGS BANK (through its Wilmington Finance division),
Seller
------------------------------------------------
Dated as of June 1, 2005
Conventional,
Fixed and Adjustable Rate, Subprime Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLERS TO PURCHASER.........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS;
REMEDIES FOR BREACH..........................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLERS..................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS....
SECTION 32. OBLIGATIONS JOINT AND SEVERAL................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D [RESERVED]
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
(the "Agreement"), dated as of June 1, 2005, by and among Xxxxxx Xxxxxxx
Mortgage Capital Inc., a New York corporation, having an office at 0000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), WILMINGTON
FINANCE INC., a Delaware corporation, having an office at 000 Xxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000 and AIG FEDERAL SAVINGS BANK
(through its Wilmington Finance division), a federally chartered savings bank,
having an office at having an office at 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx
Meeting, Pennsylvania 19462 (each a "Seller" and, together, the "Sellers").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Sellers are parties to that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2004, as
amended by Amendment No. 1, dated as of January 27, 2005, Amendment No. 2, dated
as of February 4, 2005 and Amendment No. 3, dated as of April 28, 2005 (the
"Original Purchase Agreement"), pursuant to which the Sellers desire to sell,
from time to time, to the Purchaser on a nonexclusive basis, and the Purchaser
desires to purchase, from time to time, from the Sellers, without recourse to
the Sellers but subject to the terms of this Agreement, certain first and second
lien, adjustable-rate and fixed-rate subprime residential mortgage loans (the
"Mortgage Loans") on a servicing released basis as described herein, and which
shall be delivered in pools of whole loans (each, a "Mortgage Loan Package") on
various dates as provided herein (each, a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Sellers wish to prescribe the manner
of the conveyance, servicing by the Sellers and control of the Mortgage Loans;
and
WHEREAS, following its purchase of the Mortgage Loans from the
Sellers, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and each
of the Sellers agree to amend and restate the Original Purchase Agreement in its
entirety as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
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 Loan in the
jurisdiction where the related Mortgaged Property is located.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Amended and Restated Mortgage Loan Purchase and
Warranties Agreement and all amendments hereof and supplements hereto.
AIG: As defined in Section 7.
ALTA: The American Land Title Association or any successor thereto.
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 and Conveyance Agreement: As defined in Subsection 6.01.
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 sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments of interest until the stated maturity date of the Mortgage Loan or (b)
for which Monthly Payments of principal (not including the payment due on its
stated maturity date) are based on an amortization schedule that would be
insufficient to fully amortize the principal thereof by the stated maturity date
of the Mortgage Loan.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which either Seller's servicing operations are located or (iii)
the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Sellers from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
applicable Seller in accordance with the terms of this Agreement.
Determination Date: The second Business Day of the month in which
the related Remittance Date occurs.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Eligible Account: Any of (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by Standard & Poor's or
Prime-1 by Xxxxx'x (or a comparable rating if another Rating Agency is specified
by the Purchaser by written notice to the Sellers) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC, or (iii) a trust account or accounts maintained with
a federal or state chartered depository institution or trust company acting in
its fiduciary capacity.
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.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Mae Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004) "high risk home," or "predatory" loan under any other
applicable federal, state or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees) or (c) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary. For avoidance of doubt, the parties agree that
this definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
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 Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Sellers from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the applicable Seller's Mortgage Loan identifying
number; (2) the Mortgagor's name; (3) the street address of the Mortgaged
Property including the city, state and zip code; (4) a code indicating whether
the Mortgagor is self-employed; (5) a code indicating whether the Mortgaged
Property is owner-occupied; (6) the number and type of residential units
constituting the Mortgaged Property; (7) the original months to maturity or the
remaining months to maturity from the related Cut-off Date, in any case based on
the original amortization schedule and, if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (8) with respect
to each First Lien Loan, the Loan-to-Value Ratio at origination, and with
respect to each Second Lien Loan, the CLTV at origination; (9) the Mortgage
Interest Rate as of the related Cut-off Date; (10) the date on which the Monthly
Payment was due on the Mortgage Loan and, if such date is not consistent with
the Due Date currently in effect, such Due Date; (11) the stated maturity date;
(12) the first payment date; (13) the amount of the Monthly Payment as of the
related Cut-off Date; (14) the last payment date on which a payment was actually
applied to the outstanding principal balance; (15) the original principal amount
of the Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the
close of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, a code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (24) a code indicating the documentation style
(i.e., full, alternative or reduced); (25) asset verification (Y/N); (26) the
loan credit classification (as described in the Underwriting Guidelines); (27)
whether such Mortgage Loan provides for a Prepayment Penalty and, if applicable,
the Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a Home Loan; (39) a code indicating whether the
Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percentage of coverage, if applicable; (43)
Appraised Value; (44) appraisal type; (45) automated valuation model (AVM); (46)
appraisal date; and (47) with respect to the related Mortgagor, the
debt-to-income ratio. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of each Seller, and delivered to the Purchaser as required
by this Agreement.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Sellers in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and among the Sellers and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, accepted by the Sellers, who had
no interest, direct or indirect, in the Mortgaged Property or in any loan made
on the security thereof, and whose compensation was not affected by the approval
or disapproval of the Mortgage Loan, and such appraiser and the appraisal made
by such appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the applicable Seller for a Deleted Mortgage Loan which must, on
the date of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in the
case of a substitution of more than one mortgage loan for a Deleted Mortgage
Loan, an aggregate principal balance), not in excess of the outstanding
principal balance of the Deleted Mortgage Loan (the amount of any shortfall will
be remitted to the Purchaser by the applicable Seller in accordance with the
terms of this Agreement in the month of substitution); (ii) have a Mortgage
Interest Rate not less than and not more than 1% greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreement: As defined in Section 13.
Reconstitution Date: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The fifth Business Day of any month, beginning with
the first Remittance Date after the related Closing Date.
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Sellers: As defined in the initial paragraph of the Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Seller consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Representations and Warranties: The representations and
warranties set forth in Subsection 9.02(a), (f), (h), (ii), (ll), (mm) and (qq).
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 Sellers 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 Sellers
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Sellers 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.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Sellers shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Sellers in the related
Purchase Price and Terms Agreement.
Underwriting Guidelines: The underwriting guidelines of the Sellers,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
WFI: As defined in Section 7.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Sellers agree to sell from time to time on a nonexclusive basis,
and the Purchaser agrees to purchase from time to time without recourse to the
Sellers but subject to the representations and warranties and terms contained in
this Agreement, Mortgage Loans having an aggregate principal balance on the
related Cut-off Date in an amount as set forth in the related Purchase Price and
Terms Agreement, or in such other amount as agreed by the Purchaser and the
Sellers as evidenced by the actual aggregate principal balance of the Mortgage
Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Sellers from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The applicable Seller shall deliver the related Mortgage Loan
Schedule for the Mortgage Loans to be purchased on a particular Closing Date to
the Purchaser at least five (5) Business Days prior to the related Closing Date.
The related Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with those Mortgage Loans which have not been funded prior to the
related Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Sellers, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Sellers by wire transfer of immediately available funds to an
account designated by the Sellers in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans (minus that portion of any such payment which is allocable to the
period prior to the related Cut-off Date). The outstanding principal balance of
each Mortgage Loan as of the related Cut-off Date is determined after
application of payments of principal due on or before the related Cut-off Date,
to the extent actually collected, together with any unscheduled principal
prepayments collected prior to such Cut-off Date; provided, however, that
payments of scheduled principal and interest paid prior to such Cut-off date,
but to be applied on a Due Date beyond the related Cut-off Date shall not be
applied to the principal balance as of the related Cut-off Date. Such prepaid
amounts shall be the property of the Purchaser and shall be remitted by the
Sellers to the Purchaser on the next Remittance Date.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Sellers shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at the Sellers' place of business in Plymouth Meeting,
Pennsylvania. Such examination may be made by the Purchaser or its designee at
any reasonable time before or after the related Closing Date. If the Purchaser
makes such examination prior to the related Closing Date and reasonably
determines, in good faith, that any Mortgage Loans are unacceptable to the
Purchaser for any reason, such Mortgage Loans shall be deleted from the related
Mortgage Loan Schedule, and may be replaced, at the applicable Seller's option,
by a Qualified Substitute Mortgage Loan (or Loans) acceptable to the Purchaser.
The Purchaser may, at its option and without notice to the Sellers, purchase
some or all of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the Purchaser's (or any of its successor's) rights to demand
repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Sellers to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Sellers shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Sellers shall cause the Servicing File retained by
the Sellers pursuant to this Agreement to be appropriately identified in the
Sellers' computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Sellers
shall release from their custody the contents of any Servicing File retained by
it only in accordance with this Agreement.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the applicable Seller, an Affiliate of the applicable Seller,
the Purchaser or one or more designees of the Purchaser, as the Purchaser shall
select. Notwithstanding the foregoing, each Mortgage and related Mortgage Note
shall be possessed solely by the Purchaser or the appropriate designee of the
Purchaser, as the case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Sellers after the
related Cut-off Date on or in connection with a Mortgage Loan shall be vested in
the Purchaser or one or more designees of the Purchaser; provided, however, that
all funds received on or in connection with a Mortgage Loan shall be received
and held by the Sellers in trust for the benefit of the Purchaser or the
appropriate designee of the Purchaser, as the case may be, as the owner of the
Mortgage Loans pursuant to the terms of this Agreement.
The Sellers shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which shall
be marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Sellers shall maintain in their possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of prudent mortgage lenders who
originate mortgage loans similar to the Mortgage Loans in the jurisdiction where
the Mortgaged Property is located, including but not limited to documentation as
to the method used in determining the applicability of the provisions of the
National Flood Insurance Act of 1968, as amended, to the Mortgaged Property and
documentation evidencing insurance coverage. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Sellers may be in the form of
microfilm or microfiche so long as the Sellers comply with the requirements of
the Xxxxxx Xxx Guides or prudent mortgage lenders who originate mortgage loans
similar to the Mortgage Loans in the jurisdiction where the Mortgaged Property
is located.
The sale of each Mortgage Loan shall be reflected on the applicable
Seller's balance sheet and other financial statements as a sale of assets by the
applicable Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Sellers shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Sellers shall comply with
the terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Sellers shall forward to the Custodian, or after the related
Closing Date, to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Sellers shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office or title closing agent to
be a true and complete copy of the original within ninety days of its submission
for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the applicable Seller does not cure such failure within 30
days of discovery or receipt of written notification of such failure from the
Purchaser, the related Mortgage Loan shall, upon the request of the Purchaser,
be repurchased by such Seller at the price and in the manner specified in
Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that such Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that such Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of a servicing officer of such Seller, confirming that
such documents have been accepted for recording; provided that, upon request of
the Purchaser and delivery by the Purchaser to the Seller of a schedule of the
related Mortgage Loans, such Seller shall reissue and deliver to the Purchaser
or its designee said officer's certificate.
The Sellers shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Sellers for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Sellers shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
shall include evaluating and monitoring the overall quality of the Sellers' loan
production and servicing activities. The program is to ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors and
omissions by officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Sellers to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement, the Sellers hereby sell, transfer, assign, convey and deliver to
the Purchaser the Servicing Rights.
The Purchaser shall retain the Sellers as contract servicers of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions set forth in this section provided that if the related
Transfer Date has not occurred on or prior to the date which is 60 days after
the related Closing Date, the Purchaser and the Sellers hereby agree to
negotiate in good faith and enter into a more detailed interim servicing
agreement mutually acceptable to the parties. The Sellers shall service the
Mortgage Loans on an "actual/actual" basis and otherwise in accordance with the
Accepted Servicing Practices and the following provisions of this section. The
Sellers shall not be entitled to a servicing fee in connection with the
servicing of any Mortgage Loan hereunder.
In servicing the Mortgage Loans, the Sellers shall comply with all
applicable laws, rules and regulations with respect thereto. The Sellers shall
take no action with respect to any Mortgage Loan, including entering into any
litigation, or any agreement with the related Mortgagor, without the prior
written consent of the Purchaser. The Sellers shall promptly notify the
Purchaser in writing of any action which should be taken with respect to any
Mortgage Loan in accordance with Accepted Servicing Practices. The Sellers shall
take no action, and shall not refrain from taking action, which, in either case,
(a) would impair the ability of the Purchaser to realize on or enforce the
Mortgage Note or the lien of the Mortgage or any other document related thereto
or (b) would jeopardize the rights or remedies available to the Purchaser with
respect to any Mortgage Loan or otherwise impair the ability of the Purchaser to
realize on the Mortgaged Property with respect to such Mortgage Loan.
The Sellers shall be obligated to make all advances on the Mortgage
Loans with respect to taxes and insurance premiums due and owing (the "T&I
Servicing Advances"). Any other servicing advances in excess of $500 shall be
made with the prior written consent of the Purchaser. The Sellers shall be
required to notify the Purchaser in writing of all advances in excess of $500
required to be made in order to further protect and preserve the Purchaser's
interest in the Mortgage Loans and the underlying Mortgaged Property (the "Other
Servicing Advances," together with the T&I Servicing Advances, the "Servicing
Advances"), and shall make such Other Servicing Advances in a timely fashion
unless otherwise instructed by the Purchaser. The Sellers shall be entitled to
reimbursement for all Servicing Advances from the Purchaser within 15 Business
Days following the Transfer Date.
The Sellers shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans, including Escrow Payments, separate and
apart from any of their own funds and general assets in one or more Eligible
Accounts.
The Sellers shall remit to the Purchaser on each Remittance Date all
amounts received from any source with respect to the Mortgage Loans. On or prior
to each Remittance Date the Sellers shall deliver to the Purchaser a remittance
advice in electronic format acceptable to the Purchaser as to the accompanying
remittance and the period ending on the related Determination Date and shall
additionally specify the number of days which each Mortgage Loan is delinquent,
and shall contain an explanation of all Servicing Advances made, the status of
all Mortgage Loans in foreclosure or otherwise the subject of litigation, and
the status of all other collection efforts with respect to each Mortgage Loan.
Wilmington Finance Inc. ("WFI"), jointly and severally, and AIG
Federal Savings Bank (through its Wilmington Finance division) ("AIG"),
severally but not jointly, shall each indemnify and hold harmless the Purchaser
from and against any and all losses, claims or causes of actions resulting from
the breach by WFI or AIG of any of their covenants set forth herein.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Sellers shall
cease all servicing responsibilities related to, the related Mortgage Loans
subject to such Transfer Date. The Transfer Date shall be the date determined in
accordance with Section 7 herein.
On or prior to the applicable Transfer Date, the Sellers shall, at
their sole cost and expense, take such steps as may be necessary or appropriate
to effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Sellers shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Sellers shall provide the Purchaser with copies
of all such related notices no later than the Transfer Date.
(b) Notice to Insurance Companies. The Sellers shall transmit to the
applicable insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Sellers shall provide the
Purchaser with copies of all such notices no later than the Transfer Date.
(c) Delivery of Servicing Records. The Sellers shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Sellers' possession relating to each related Mortgage Loan.
(d) Escrow Payments. The Sellers shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Sellers shall provide the Purchaser with an
accounting statement, in electronic format acceptable to the Purchaser in its
sole discretion, of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Sellers shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Sellers.
(e) Payoffs and Assumptions. The Sellers shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Sellers on the related Mortgage Loans from the related Cut-off
Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Sellers on each related Mortgage Loan
shall be properly applied by the Sellers to the account of the particular
Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Sellers after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the Business Day
following the date of receipt. The Sellers shall notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied if
the Sellers forward with their payment sufficient information to permit
appropriate processing of the payment by the Purchaser. The Sellers shall assume
full responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Sellers after the Transfer Date with respect to
related Mortgage Loans then in foreclosure or bankruptcy; provided, for purposes
of this Agreement, necessary and appropriate legal application of such Monthly
Payments shall include, but not be limited to, endorsement of a Monthly Payment
to the Purchaser with the particulars of the payment such as the account number,
dollar amount, date received and any special Mortgagor application instructions
and the Sellers shall comply with the foregoing requirements with respect to all
Monthly Payments received by the Sellers after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered after
the Transfer Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage, the Sellers shall be liable for the amount
of such shortage. The Sellers shall reimburse the Purchaser for the
amount of such shortage within thirty (30) days after receipt of
written demand therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within seven (7) Business Days after notice thereof by the other
party; and
(v) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Sellers with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Sellers shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Sellers and the Purchaser as appropriate.
(k) IRS Forms. The Sellers shall file all IRS forms 1099, 1099A,
1098 or 1041 and K-1 which are required to be filed on or before the Transfer
Date in relation to the servicing and ownership of the related Mortgage Loans.
The Sellers shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to either Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Sellers;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
Each Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. Wilmington Finance Inc. is a
Delaware corporation, validly existing, and in good standing under the laws of
its jurisdiction of incorporation. AIG Federal Savings Bank (through its
Wilmington Finance division) is a federally chartered savings bank, validly
existing, and in good standing under the laws of its jurisdiction of formation.
The Seller has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in the states where
the 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 Seller.
The Seller has power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; the execution, delivery and performance of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Seller and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement has
been duly executed and delivered and constitutes the valid, legal, binding and
enforceable obligation of the Seller, except as enforceability may be limited by
(i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law. All requisite action has been taken by the
Seller to make this Agreement valid and binding upon the Seller in accordance
with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or 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 Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws, including with respect to the legitimacy of
the applicable Mortgagor and the origin of the assets used by the said Mortgagor
to purchase the property in question, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. There has been no change in the
business, operations, financial condition, properties or assets of the Seller
since the date of the Seller's financial statements that would have a material
adverse effect on its ability to perform its obligations under this Agreement.
The Seller has completed any forms reasonably requested by the Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished by or on behalf of the Seller pursuant to this
Agreement or any Reconstitution Agreement or in connection with the transactions
contemplated hereby (including any Securitization Transfer or Whole Loan
Transfer) contains or (up to the applicable Transfer Date) will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans to the Purchaser pursuant to this
Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan; and
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
Each Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within thirty
(30) days thereafter, all in accordance with the terms of the related Mortgage
Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac or those of prudent mortgage lenders who originate mortgage loans
similar to the Mortgage Loans in the jurisdiction where the related Mortgaged
Property is located. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac requirements or
those of prudent mortgage lenders who originate mortgage loans similar to the
Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located. All individual insurance policies contain a standard mortgagee clause
naming the Seller and its successors and assigns as mortgagee, and all premiums
thereon have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain the hazard insurance policy at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. Neither the Seller nor the related Mortgagor has
engaged in any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity and
binding effect of either including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to the Illinois Interest Act and prepayment penalties, have been
complied with, the consummation of the transactions contemplated hereby will not
involve the violation of any such laws or regulations, and the Seller shall
maintain in its possession, available for the Purchaser's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with all such
requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. No portion of the Mortgaged Property is used for
commercial purposes, and since the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law) and
perfected, first lien (with respect to a First Lien Loan) or second lien (with
respect to a Second Lien Loan) on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(A) with respect to a Second Lien Loan only, the lien of
the first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and
assessments not yet due and payable;
(C) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in equity or
at law), and perfected first lien (with respect to a First Lien Loan) or second
lien (with respect to a Second Lien Loan) and first priority (with respect to a
First Lien Loan) or second priority (with respect to a Second Lien Loan)
security interest on the property described therein and the Seller has full
right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties) except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law). All parties
to the Mortgage Note, the Mortgage and any other such related agreement had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage other than any amounts
placed in a tax or insurance escrow account pursuant to the Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement except for any warehouse liens that will be released
simultaneously with the sale of the Mortgage Loan to the Purchaser, and
following the sale of each Mortgage Loan, the Purchaser will own such Mortgage
Loan free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest. The Seller intends to relinquish all
rights to possess, control and monitor the Mortgage Loan. After the related
Closing Date, the Seller will have no right to modify or alter the terms of the
sale of the Mortgage Loan and the Seller will have no obligation or right to
repurchase the Mortgage Loan or substitute another Mortgage Loan, except as
provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Propert, except for deminimis encroachments acceptable to a
prudent mortgage lender that originates mortgage loans similar to the Mortgage
Loan in the jurisdiction where the Mortgaged Property is located that will have
no adverse affect on the value of the property, provided that any such
encroaching improvements are stated in the applicable title insurance policy and
affirmatively insured over. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause prudent private institutional investors who invest in mortgage loans
similar to the Mortgage Loan to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, or cause the Mortgage Loans to prepay
during any period materially faster or slower than the mortgage loans originated
by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller
executed and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest
Rate and the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgage Property;
and nothing further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, accepted by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, if applicable to the Seller, where required or customary in
the jurisdiction in which the Mortgaged Property is located, the original lender
has filed for record a request for notice of any action by the related senior
lienholder, and the Seller has notified the senior lienholder in writing of the
existence of the Second Lien Loan and requested notification of any action to be
taken against the Mortgagor by the senior lienholder. Either (a) no consent for
the Second Lien Loan is required by the holder of the related first lien or (b)
such consent has been obtained and is contained in the Mortgage File;
(rr) [Reserved];
(ss) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Either (x) each Mortgage Loan is covered
by a paid in full, life of loan, tax service contract, and such contract is
transferable, or (y) on the related Closing Date the Purchaser shall net $75.00
per Mortgage Loan from the related Purchase Price to cover the cost of such a
tax service contract;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded, or has been
sent for recording, and all subsequent assignments of the original Mortgage
(other than the assignment to the Purchaser) have been recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or is in the process of being
recorded;
(ggg) Mortgagor Bankruptcy. On or prior to the related Closing Date,
the Mortgagor has not filed and will not file a bankruptcy petition or has not
become the subject and will not become the subject of involuntary bankruptcy
proceedings or has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect of
the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not previously been
offered for sale to and been rejected by another investor for material reasons
of credit compliance or valuation;
(iii) [Reserved];
(jjj) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Originator or any Affiliate of the Originator. If, at the
time of loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the Originator,
the Originator referred the related Mortgagor's application to such Affiliate
for underwriting consideration;
(kkk) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(lll) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) Seller has
non-prepayment programs available to Mortgagors, (iii) the prepayment premium is
disclosed to the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state or federal
law to the contrary, the Originator, as servicer, shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the related Mortgagor's default in making the Mortgage Loan payments;
(mmm) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, disability, property,
accident, unemployment or health insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single premium credit insurance policy (e.g., life,
disability, property, accident, unemployment, mortgage or health insurance) in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(nnn) [Reserved];
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(ppp) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either Seller or by the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other; however, in any event, such
notice by Purchaser must be made to the applicable Seller within sixty (60) days
of the Purchaser's discovery of such breach. In the event that the Purchaser
does not deliver such notice within the sixty (60) day timeframe then the
Purchaser shall forfeit its right to require such Seller to repurchase the
applicable Mortgage Loan.
Within 60 days of the earlier of either discovery by or notice to
the applicable Seller of any such breach of a representation or warranty, which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Purchaser therein (or which materially and adversely affects the value of
the applicable Mortgage Loan or the interest of the Purchaser therein in the
case of a representation and warranty relating to a particular Mortgage Loan),
such Seller shall use its best efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, such Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the applicable Seller of any breach of the
representations or warranties set forth in Paragraph (zz), (aaa), (bbb), (ccc),
(jjj), (kkk), (lll), (mmm), (ooo) and (ppp) of Subsection 9.02, such Seller
shall repurchase such Mortgage Loan at the Repurchase Price. In the event that a
breach shall involve any representation or warranty set forth in Subsection
9.01, and such breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the applicable Seller of such breach, all of the
Mortgage Loans affected by such breach shall, at the Purchaser's option, be
repurchased by such Seller at the Repurchase Price. However, if the breach shall
involve a representation or warranty set forth in Subsection 9.02 (except as
provided in the second sentence of this paragraph with respect to certain
breaches for which no substitution is permitted) and the applicable Seller
discovers or receives notice of any such breach within 120 days of the related
Closing Date, such Seller shall, at such Seller's option and provided that such
Seller has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted Mortgage
Loan") and substitute in its place a Qualified Substitute Mortgage Loan or
Loans, provided that any such substitution shall be effected not later than 120
days after the related Closing Date. If such Seller has no Qualified Substitute
Mortgage Loan, it shall repurchase the deficient Mortgage Loan at the Repurchase
Price. Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing
provisions of this Subsection 9.03 shall be accomplished by direct remittance of
the Repurchase Price to the Purchaser or its designee in accordance with the
Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
applicable Seller shall arrange for the reassignment of the Deleted Mortgage
Loan to such Seller and the Purchaser shall reassign the Mortgage Loan affected
and any right it may have in the relevant Mortgaged Property to such Seller free
and clear of all liens, encumbrances, claims, or interest of any person or
entity claiming by, through, or under the Purchaser without recourse and shall
execute and deliver to such Seller in recordable form an assignment of the
Purchaser's beneficial interest in the affected Mortgage, as well as other
documents necessary to reflect the reassignment of any title protection and
insurance policies, and the delivery to such Seller of any documents held by the
Custodian relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the applicable Seller shall, simultaneously with such
reassignment, give written notice to the Purchaser that such repurchase or
substitution has taken place, amend the Mortgage Loan Schedule to reflect the
withdrawal of the Deleted Mortgage Loan from this Agreement, and, in the case of
substitution, identify a Qualified Substitute Mortgage Loan and amend the
related Mortgage Loan Schedule to reflect the addition of such Qualified
Substitute Mortgage Loan to this Agreement. In connection with any such
substitution, the applicable Seller shall be deemed to have made as to such
Qualified Substitute Mortgage Loan the representations and warranties set forth
in this Agreement except that all such representations and warranties set forth
in this Agreement shall be deemed made as of the date of such substitution. The
applicable Seller shall effect such substitution by delivering to the Custodian
or to such other party as the Purchaser may designate in writing for such
Qualified Substitute Mortgage Loan the documents required by Subsection 6.03 and
the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The applicable
Seller shall remit directly to the Purchaser, or its designee in accordance with
the Purchaser's instructions the Monthly Payment due, if any, on such Qualified
Substitute Mortgage Loan or Loans in the month following the date of such
substitution. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution shall be retained by the applicable Seller.
For the month of substitution, distributions to the Purchaser shall include the
Monthly Payment due on any Deleted Mortgage Loan in the month of substitution,
and the applicable Seller shall thereafter be entitled to retain all amounts
subsequently received by such Seller in respect of such Deleted Mortgage Loan.
For any month in which either Seller substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, such Seller shall
determine the amount (if any) by which the aggregate principal balance of all
Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the applicable Seller
directly to the Purchaser or its designee in accordance with the Purchaser's
instructions within two (2) Business Days of such substitution.
As to each Mortgage Loan, on and after the date servicing is
transferred from the Sellers to the Purchaser and until such time as the
servicing for such Mortgage Loan in reassigned to Sellers, the Purchaser or its
designee shall service such Mortgage Loan in conformance and accordance with the
servicing practices that Purchaser or its designee would follow in servicing
residential mortgage loans held for its own account, giving due consideration to
those mortgage servicing practices of prudent mortgage lending institutions that
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
In addition to such repurchase or substitution obligation, WFI,
jointly and severally, and AIG, severally but not jointly, shall each indemnify
the Purchaser and its present and former directors, officers, employees and
agents and any Successor Servicer and its present and former directors,
officers, employees and agents and hold such parties harmless against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of WFI's or AIG's representations and warranties contained in this
Agreement or any Reconstitution Agreement. It is understood and agreed that the
obligations of the Sellers set forth in this Subsection 9.03 to cure, substitute
for or repurchase a defective Mortgage Loan and to indemnify the Purchaser and
Successor Servicer as provided in this Subsection 9.03 and in Subsection 14.01
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties. For purposes of this paragraph
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against either Seller relating to or arising out
of the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by either Seller to the Purchaser, (ii) failure
by the applicable Seller to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the applicable Seller by the Purchaser
for compliance with this Agreement.
Notwithstanding the above, in no event shall the indemnifying party
be liable to the indemnified party for any punitive, special, incidental,
indirect or consequential damages, including but not limited to, lost profits.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan is not paid by the related Mortgagor to the then current
mortgagee, or (ii) after the related Closing Date is not paid by the related
Mortgagor to the Purchaser within thirty (30) days of such related Due Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage Loan from the
Purchaser at a price equal to the related Purchase Price Percentage multiplied
by the then outstanding principal balance of such Mortgage Loan, plus accrued
and unpaid interest thereon from the date to which interest was last paid
through the day prior to the repurchase date at the applicable Mortgage Interest
Rate, plus any outstanding advances owed to any servicer in connection with such
Mortgage Loan. Notwithstanding the foregoing, with respect to the first
scheduled payment of principal and interest due following the related Closing
Date, such payment shall not be considered a "First Payment Default" for
purposes of this provision until the payment has not been received by the
Purchaser within forty-five (45) days of the related Due Date. The Purchaser
shall have ninety (90) days following such forty-five (45) day period to notify
the Seller and request a repurchase and the Seller shall repurchase such
delinquent Mortgage Loan within thirty (30) days of receipt of such notice.
Notwithstanding the foregoing, the Purchaser reserves the right to request a
repurchase following such ninety (90) day timeframe in the event of a NSF return
of the related first payment.
Subsection 9.05 [Reserved].
Subsection 9.06 Premium Recapture. With respect to any Mortgage Loan
without prepayment penalties that prepays in full during the first six months
following the related Closing Date, the applicable Seller shall pay the
Purchaser, within seven (7) Business Days after Purchaser notifies such Seller
in writing (with backup documentation) of such prepayment, such prepayment in
full, an amount equal to the excess of the Purchase Price Percentage for such
Mortgage Loan over par, multiplied by the outstanding principal balance of such
Mortgage Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Sellers shall deliver to the Purchaser a magnetic diskette, or
transmit by modem, a listing on a loan-level basis of the necessary
information to compute the Purchase Price of the Mortgage Loans delivered
on such Closing Date (including accrued interest), and prepare a Mortgage
Loan Schedule;
(ii) all of the representations and warranties of the Sellers 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;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Sellers shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Sellers on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Sellers.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) with respect to the initial Closing Date, the
Custodial Agreement, dated as of the initial Cut-off Date;
(3) the related Mortgage Loan Schedule (one copy to be
attached to the Custodian's counterpart of the Custodial
Agreement in connection with the initial Closing Date, and one
copy to be attached to the related Assignment and Conveyance
as the Mortgage Loan Schedule thereto);
(4) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(5) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Sellers, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(6) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(7) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(8) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by
either Seller by merger or acquired or originated by either
Seller while conducting business under a name other than its
present name, if applicable;
(9) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto; and
(10) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance.
The Sellers shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Sellers' attorney's fees, shall be paid by the Sellers.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Sellers and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Sellers agree to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Sellers among the Purchaser, the Sellers and any servicer in connection with
a Whole Loan Transfer, a sellers' warranties and servicing agreement or a
participation and servicing agreement in form and substance reasonably
acceptable to the parties, and in connection with a Securitization Transfer, an
Assignment and Recognition Agreement substantially in the form attached hereto
as Exhibit I (each, a "Reconstitution Agreement").
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Sellers agree (1) to reasonably
cooperate with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform a Reconstitution Agreement as required by the Purchaser; (3) to restate
the representations and warranties set forth in Subsection 9.01 of this
Agreement as of the applicable Reconstitution Date and restate the
representations and warranties set forth in Subsection 9.02 of this Agreement as
of the applicable Closing Date; provided, however, that the Sellers shall
restate the Servicing Representations and Warranties set forth in Subsection
9.02 of this Agreement as of the applicable Transfer Date. The Sellers shall
provide to such servicer or issuer, as the case may be, and any other
participants or purchasers in such Reconstitution: (i) any and all reasonable
information and appropriate verification of information which may be reasonably
available to the Sellers or their affiliates, whether through letters of its
auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request; (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Sellers as are reasonably believed necessary
by the Purchaser or any such other participant; and (iii) to execute, deliver
and satisfy all conditions set forth in any indemnity agreement reasonably
required by the Purchaser or any such participant. Moreover, the Sellers agree
to cooperate with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreement. The Sellers shall indemnify the Purchaser, each
affiliate of the Purchaser participating in the Reconstitution, each underwriter
or placement agent participating in the Reconstitution and each Person who
controls the Purchaser, such affiliate, underwriter or placement agent and their
respective present and former directors, officers, employees and agents, and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that each of them may sustain arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the information provided by or on behalf of either Seller
regarding either Seller, the Mortgage Loans or the Underwriting Guidelines set
forth in any offering document (including, without limitation, structural term
sheets, collateral term sheets and computational materials) prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement.
In the event the Purchaser has elected to have the Sellers hold
record title to the Mortgages, prior to the Reconstitution Date, the Sellers
shall prepare an assignment of mortgage in blank from the Sellers, acceptable to
the prospective purchaser or trustee, as applicable, for each Mortgage Loan that
is part of the Reconstitution and shall pay all preparation and recording costs
associated therewith. In connection with the Reconstitution, the Sellers shall
execute each assignment of mortgage.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Sellers.
Subsection 14.01 Additional Indemnification by the Sellers; Third
Party Claims.
(a) WFI, jointly and severally, and AIG, severally but not jointly,
shall each indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents, and hold such parties harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees and expenses (including legal fees and expenses incurred in
connection with the enforcement of WFI's or AIG's indemnification obligations
under this Subsection 14.01) and related costs, judgments, and any other costs,
fees and expenses that such parties may sustain in any way related to the
failure of WFI or AIG, as the case may be, to perform its duties and to service
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13 or any breach of
WFI's or AIG's representations, warranties and covenants set forth in this
Agreement. For purposes of this paragraph "Purchaser" shall mean the Person then
acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer" shall
mean any Person designated as the Successor Servicer pursuant to this Agreement
and any and all Persons who previously were "Successor Servicers" pursuant to
this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02 Merger or Consolidation of the Sellers.
The Sellers will keep in full effect their existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which either Seller may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which either Seller shall be a party, or any Person succeeding to the business
of either Seller, shall be the successor of such Seller 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 have a net worth of at
least $25,000,000.
SECTION 15. Financial Statements.
The Sellers understand that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Sellers for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Sellers at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Sellers shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Sellers
(and are available upon request to members or stockholders of the Sellers or the
public at large). The Sellers, if they have not already done so, agree to
furnish promptly to the Purchaser copies of the statements specified above.
The Sellers also agree to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Sellers or
the financial statements of the Sellers.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of either Seller's failure to deliver (i) each of
the related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser
on or before the related Closing Date. The Sellers hereby grant to the Purchaser
a lien on and a continuing security interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Sellers of their obligations under the related Purchase Price
and Terms Agreement, and the Sellers agree that they shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to either Seller:
Wilmington Finance Inc.
AIG Federal Savings Bank (through its Wilmington Finance
division)
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Meeting, Pennsylvania 19462
Attention: Xxxx Xxxxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. 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 (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
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 nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. 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 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser 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 substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Sellers are selling the Mortgage Loans and not a debt instrument of
either Seller or another security. Accordingly, the parties hereto each intend
to treat the transaction for Federal income tax purposes as a sale by the
Sellers, and a purchase by the Purchaser, of the Mortgage Loans. Moreover, the
arrangement under which the Mortgage Loans are held shall be consistent with
classification of such arrangement as a grantor trust in the event it is not
found to represent direct ownership of the Mortgage Loans. The Purchaser shall
have the right to review the Mortgage Loans and the related Mortgage Loan Files
to determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Sellers
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Sellers and the Purchaser and the respective permitted
successors and assigns of each Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Sellers to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Sellers. There shall be no limitation on the number of
assignments or transfers allowable by the Purchaser with respect to the Mortgage
Loans and this Agreement. In the event the Purchaser assigns this Agreement, and
the assignee assumes any of the Purchaser's obligations hereunder, the Sellers
acknowledge and agree to look solely to such assignee, and not to the Purchaser,
for performance of the obligations so assumed and the Purchaser shall be
relieved from any liability to the Sellers with respect thereto.
SECTION 23. 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 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. 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) 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 without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Sellers and the Purchaser 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 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Sellers' expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Sellers agree that they
will not take any action or permit or cause any action to be taken by any of
their agents or affiliates, or by any independent contractors on either Seller's
behalf, to personally, by telephone or mail (via electronic means or otherwise),
solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed that the
Sellers, or any of their respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in their portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Sellers and any of their affiliates (those it owns as well as those
serviced for others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact them about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Sellers or by any affiliate of either
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLERS AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Governing Law Jurisdiction; Consent to Service of
Process.THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLERS
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
SECTION 32. Obligations Joint and Several.OBLIGATIONS OF SELLERS.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, (A) WFI HEREBY
AGREES TO BE JOINTLY AND SEVERALLY LIABLE FOR ALL REPRESENTATIONS, WARRANTIES,
COVENANTS, OBLIGATIONS AND INDEMNITIES OF THE SELLERS HEREUNDER, AND (B)
PURCHASER ACKNOWLEDGES AND AGREES THAT AIG SHALL ONLY BE LIABLE FOR ITS OWN
BREACHES, ACTS OR OMISSIONS HEREUNDER AND IN NO EVENT OR UNDER ANY CIRCUMSTANCE
SHALL AIG BE LIABLE (WHETHER JOINTLY AND SEVERALLY OR OTHERWISE) FOR THE
BREACHES, ACTS OR OMISSIONS OF WFI, INCLUDING, WITHOUT LIMITATION, BREACHES OF
REPRESENTATIONS, WARRANTIES, COVENANTS, OBLIGATIONS OR INDEMNITIES OF WFI
HEREUNDER.
[Signature Page Follows]
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
WILMINGTON FINANCE INC.
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
AIG FEDERAL SAVINGS BANK (through its
Wilmington Finance division)
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Amended and Restated Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Sellers that
state law so allows. If the Mortgage Loan was acquired by either Seller in
a merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the applicable Seller cannot deliver or
cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, such Seller shall
deliver or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of such Seller (or certified by
the title company, escrow agent, or closing attorney) stating that such
Mortgage has been dispatched to the appropriate public recording office
for recordation and that the original recorded Mortgage or a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered
to the Custodian upon receipt thereof by such Seller; or (ii) in the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or on
direction of the Purchaser as provided in this Agreement. If the
Assignment of Mortgage is to be recorded, the Mortgage shall be assigned
to the Purchaser. If the Assignment of Mortgage is not to be recorded, the
Assignment of Mortgage shall be delivered in blank. If the Mortgage Loan
was acquired by either Seller in a merger, the Assignment of Mortgage must
be made by "[Seller], successor by merger to [name of predecessor]". If
the Mortgage Loan was acquired or originated by either Seller while doing
business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the applicable Seller
to the Last Endorsee with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the
original recorded assignments of mortgage, such Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of such Seller (or certified by
the title company, escrow agent, or closing attorney) stating that such
intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the applicable Seller; or (ii) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the applicable Seller to be a true and correct copy of the
original.
In the event an Officer's Certificate of either Seller is delivered
to the Purchaser because of a delay caused by the public recording office in
returning any recorded document, such Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian; provided, however, that any recorded document shall
in no event be delivered later than one year following the related Closing Date.
An extension of the date specified in clause (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT B
[RESERVED]
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________ [COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
(i) Attached hereto as Exhibit 1 is a true, correct and complete
copy of the charter of the Company which is in full force and effect on
the date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
(ii) Attached hereto as Exhibit 2 is a true, correct and complete
copy of the bylaws of the Company which are in effect on the date hereof
and which have been in effect without amendment, waiver, rescission or
modification since ___________.
(iii) Attached hereto as Exhibit 3 is an original certificate of
good standing of the Company issued within ten days of the date hereof,
and no event has occurred since the date thereof which would impair such
standing.
(iv) Attached hereto as Exhibit 4 is a true, correct and complete
copy of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver (a) the Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of June
1, 2005 (the "Purchase Agreement"), by and between Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser") and the Company and (b) the Custodial
Agreement, dated as of August 1, 2004 (the "Custodial Agreement"), by and
among the Purchaser, the Company, and [CUSTODIAN] (the "Custodian"), [and
to endorse the Mortgage Notes and execute the Assignments of Mortgages by
original [or facsimile] signature], and such resolutions are in effect on
the date hereof and have been in effect without amendment, waiver,
rescission or modification since ____________.
(v) Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, [the sale of the mortgage loans] or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
(vi) Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of the Purchase Agreement conflicts or
will conflict with or results or will result in a breach of or constitutes
or will constitute a default under the charter or by-laws of the Company
or, to the best of my knowledge, the terms of any indenture or other
agreement or instrument to which the Company is a party or by which it is
bound or to which it is subject, or any statute or order, rule,
regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which
it is bound.
(vii) To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Purchase Agreement, or the mortgage loans or of any action taken or to
be taken in connection with the transactions contemplated hereby, or which
would be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
(viii) Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
(ix) The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: By:
-------------------- ----------------------------
Name:
-------------------------
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________ [COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
-------------------- ----------------------------
Name:
-------------------------
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
----------------------- --------------------------- ----------------------------
----------------------- --------------------------- ----------------------------
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EXHIBIT D
[RESERVED]
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______ (the "Association")]
-------------------------------
-------------------------------
-------------------------------
Attention:
---------------------------
---------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________ [COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Amended and Restated Mortgage Loan
Purchase and Warranties Agreement. The Company warrants that the mortgage loans
to be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond
any collateral required to secure advances made by the Association to the
Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
------------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
------------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of June 1, 2005, and
certifies that all notes, mortgages, assignments and other documents in its
possession relating to such Mortgage Loans have been delivered and released to
the Company or its designees, as of the date and time of the sale of such
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. Such release shall be
effective automatically without any further action by any party upon payment in
one or more installments, in immediately available funds, of $_____________, in
accordance with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
--------------------------------
--------------------------------
--------------------------------
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
-----------------------------
By:
-----------------------------
Title:
--------------------------
Date:
---------------------------
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of ____________, ________, Wilmington Finance Inc.
and AIG Federal Savings Bank (through its Wilmington Finance division)
("Sellers"), as the Sellers under (i) that certain Purchase Price and Terms
Agreement, dated as of ________, 200_ (the "PPTA"), and (ii) that certain
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of June 1, 2005 (the "Purchase Agreement"), do hereby sell, transfer, assign,
set over and convey to Xxxxxx Xxxxxxx Mortgage Capital, Inc. ("Purchaser") as
the Purchaser under the Agreements (as defined below) without recourse, but
subject to the terms of the Agreements, all right, title and interest of, in and
to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit A (the "Mortgage Loans"), together with the Mortgage Files and the
related Servicing Rights and all rights and obligations arising under the
documents contained therein. Each Mortgage Loan subject to the Agreements was
underwritten in accordance with, and conforms to, the Underwriting Guidelines
attached hereto as Exhibit C. Pursuant to Section 6 of the Purchase Agreement,
the Sellers have delivered to the Custodian the documents for each Mortgage Loan
to be purchased as set forth in the Purchase Agreement. The ownership of each
Mortgage Note, Mortgage and the contents of the Mortgage File and Servicing File
is vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or which come into the
possession of the Sellers shall immediately vest in the Purchaser and shall be
retained and maintained, in trust, by the Sellers at the will of the Purchaser
in a custodial capacity only. The PPTA and the Purchase Agreement shall
collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
WILMINGTON FINANCE INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
AIG FEDERAL SAVINGS BANK (through its
Wilmington Finance division)
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
---------------------------------
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a CLTV of greater than ____%; (4) a FICO Score of less than ___; or (5) a
debt-to-income ratio of more than ___%. Each Mortgage Loan has a Mortgage
Interest Rate of at least ___% per annum and an outstanding principal balance of
less than $______. Each Adjustable Rate Mortgage Loan has an Index of [______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT H
UNDERWRITING GUIDELINES
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLERS] (the "Company"):
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:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Amended and
Restated Mortgage Loan Purchase and Warranties Agreement (the "Purchase
Agreement"), dated as of June 1, 2005, between the Assignor, as purchaser (the
"Purchaser"), and the Company, as seller, solely insofar as the Purchase
Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the applicable Closing Date; provided,
however, that the Seller shall restate the representations and warranties set
forth on Exhibit B that match the Servicing Representations and Warranties as
set forth in Subsection 9.02 of the Purchase Agreement as of the applicable
Transfer Date unless otherwise specifically stated in such representations and
warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. 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, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. 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.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
WILMINGTON FINANCE INC.
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
AIG FEDERAL SAVINGS BANK (through its
Wilmington Finance division)
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
[--------------------------]
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties
Regarding Individual Mortgage Loans
EXECUTION COPY
AMENDMENT TO MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This AMENDMENT TO MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
(the "Amendment"), dated January 27, 2005 but effective as of August 1, 2004, by
and among Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation, having
an office at 1221 Avenue of the Americas, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Purchaser"), WILMINGTON FINANCE INC. ("WFI"), a Delaware corporation,
having an office at 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx
00000 and AIG FEDERAL SAVINGS BANK (through its Wilmington Finance division)
("AIG"), a federally chartered savings bank, having an office at 000 Xxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxx Meeting, Pennsylvania 19462 (each a "Seller" and,
together, the "Sellers"), amends (solely in certain respects as specifically set
forth in this Amendment) the Agreement (as defined below).
WHEREAS, the Purchaser and each Seller are parties to that certain
Mortgage Loan Purchase and Warranties Agreement dated as of August 1, 2004 (the
"Agreement"); and
WHEREAS, the Purchaser and each Seller desires to amend the
Agreement pursuant to Section 23 of the Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and each
of the Sellers agree to amend the Agreement as follows:
SECTION 1. The last sentence of Section 7 of the Agreement is hereby
amended and restated in its entirety as follows:
WFI, jointly and severally, and AIG, severally but not
jointly, shall each indemnify and hold harmless the Purchaser
from and against any and all losses, claims or causes of
actions resulting from the breach by WFI or AIG of any of
their covenants set forth herein.
SECTION 2. The first sentence of the sixth paragraph of Subsection
9.03 of the Agreement is hereby amended and restated in its entirety as follows:
In addition to such repurchase or substitution obligation,
WFI, jointly and severally, and AIG, severally but not
jointly, shall each indemnify the Purchaser and its present
and former directors, officers, employees and agents and any
Successor Servicer and its present and former directors,
officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and
other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting
from, a breach of WFI's or AIG's representations and
warranties contained in this Agreement or any Reconstitution
Agreement.
SECTION 3. The first sentence of Subsection 14.01(a) of the
Agreement is hereby amended and restated in its entirety as follows:
WFI, jointly and severally, and AIG, severally but not
jointly, shall each indemnify the Purchaser and its present
and former directors, officers, employees and agents and any
Successor Servicer and its present and former directors,
officers, employees and agents, and hold such parties harmless
against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses (including legal fees and
expenses incurred in connection with the enforcement of WFI's
or AIG's indemnification obligations under this Subsection
14.01) and related costs, judgments, and any other costs, fees
and expenses that such parties may sustain in any way related
to the failure of WFI or AIG, as the case may be, to perform
its duties and to service the Mortgage Loans in strict
compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13
or any breach of WFI's or AIG's representations, warranties
and covenants set forth in this Agreement.
SECTION 4. Section 32 of the Agreement is hereby amended and
restated in its entirety as follows:
OBLIGATIONS OF SELLERS. NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT, (A) WFI HEREBY AGREES TO BE
JOINTLY AND SEVERALLY LIABLE FOR ALL REPRESENTATIONS,
WARRANTIES, COVENANTS, OBLIGATIONS AND INDEMNITIES OF THE
SELLERS HEREUNDER, AND (B) PURCHASER ACKNOWLEDGES AND AGREES
THAT AIG SHALL ONLY BE LIABLE FOR ITS OWN BREACHES, ACTS OR
OMISSIONS HEREUNDER AND IN NO EVENT OR UNDER ANY CIRCUMSTANCE
SHALL AIG BE LIABLE (WHETHER JOINTLY AND SEVERALLY OR
OTHERWISE) FOR THE BREACHES, ACTS OR OMISSIONS OF WFI,
INCLUDING, WITHOUT LIMITATION, BREACHES OF REPRESENTATIONS,
WARRANTIES, COVENANTS, OBLIGATIONS OR INDEMNITIES OF WFI
HEREUNDER.
SECTION 5. This Amendment may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 6. Except as expressly amended hereby, the Agreement remains
in full force and effect. For purposes of this Amendment and the avoidance of
any doubt, capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Agreement.
[Remainder of Page Intentionally Blank]
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
WILMINGTON FINANCE INC.
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
AIG FEDERAL SAVINGS BANK (through its
Wilmington Finance division)
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of February 4, 2005 ("Amendment"), to the
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2004, as
amended by Amendment to Mortgage Loan Purchase and Warranties Agreement, dated
as of January 27, 2005 (the "Purchase Agreement"), each between XXXXXX XXXXXXX
MORTGAGE CAPITAL, INC, a New York corporation ("Xxxxxx Xxxxxxx"), and WILMINGTON
FINANCE INC. AND WILMINGTON FINANCE, a division of AIG Federal Savings Bank
(each, a "Seller").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
a. Section 1 is hereby amended by deleting the definition of
"Balloon Mortgage Loan" in its entirety and replacing it with
the following:
"Balloon Mortgage Loan: Any Mortgage Loan (a) that requires
only payments of interest until the stated maturity date of the
Mortgage Loan or (b) for which Monthly Payments of principal (not
including the payment due on its stated maturity date) are based on
an amortization schedule that would be insufficient to fully
amortize the principal thereof by the stated maturity date of the
Mortgage Loan."
b. Section 1 is hereby amended by deleting the definition of
"High Cost Loan" in its entirety and replacing it with the
following:
"High Cost Loan: A Mortgage Loan (a) covered by the Home
Ownership and Equity Protection Act of 1994, (b) classified as a
"high cost home," "threshold," "covered," (excluding New Jersey
"Covered Home Loans" as that term is defined in clause (1) of the
definition of that term in the New Jersey Home Ownership Security
Act of 2002 that were originated between November 26, 2003 and July
7, 2004) "high risk home," or "predatory" loan under any other
applicable federal, state or local law (or a similarly classified
loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees) or
(c) categorized as High Cost pursuant to Appendix E of Standard &
Poor's Glossary. For avoidance of doubt, the parties agree that this
definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review
or litigation.
c. Subsection 9.02 (f) is hereby amended by deleting the last
sentence in its entirety and replacing it with the following:
"Neither the Seller nor the related Mortgagor has engaged in
any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either including, without limitation,
no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the
Seller."
d. Subsection 9.02 (g) is hereby amended by adding the following
language in the first sentence after the words, "any
provisions relating to", and before the words "prepayment
penalties":
"the Illinois Interest Act and"
e. Subsection 9.02 (dd) is hereby amended by deleting the
following words:
"to the best of the Seller's knowledge,"
f. Subsection 9.02 (ll) is hereby amended by deleting the words
"To the best of the Seller's knowledge, there" and replacing
them with the following:
"There"
g. Subsection (mmm) is hereby amended by deleting the section in
its entirety and replacing it with the following:
"Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, disability,
property, accident, unemployment or health insurance product) or
debt cancellation agreement as a condition of obtaining the
extension of credit. No Mortgagor obtained a prepaid single premium
credit insurance policy (e.g., life, disability, property, accident,
unemployment, mortgage or health insurance) in connection with the
origination of the Mortgage Loan. No proceeds from any Mortgage Loan
were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such
Mortgage Loan;"
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
WILMINGTON FINANCE INC.
By:
--------------------------------------
Name:
Title:
WILMINGTON FINANCE, a division of AIG
Federal Savings Bank
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of April 28, 2005 ("Amendment"), to the
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2004, as
amended by Amendment No. 1, dated as of January 27, 2005 and Amendment No. 2,
dated as of February 4, 2005 (the "Purchase Agreement"), each between XXXXXX
XXXXXXX MORTGAGE CAPITAL, INC, a New York corporation ("Xxxxxx Xxxxxxx"), and
WILMINGTON FINANCE INC. AND WILMINGTON FINANCE, a division of AIG Federal
Savings Bank (each, a "Seller").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
a. Subsection 9.04 is hereby deleted in its entirety and replaced
by the following language:
Repurchase of Mortgage Loans with First Payment Defaults. With
respect to any Mortgage Loan, in the event that the first scheduled
payment of principal and interest due either (i) after origination
of such Mortgage Loan is not paid by the related Mortgagor to the
then current mortgagee, or (ii) after the related Closing Date is
not paid by the related Mortgagor to the Purchaser within thirty
(30) days of such related Due Date, the Seller, at the Purchaser's
option, shall repurchase such Mortgage Loan from the Purchaser at a
price equal to the related Purchase Price Percentage multiplied by
the then outstanding principal balance of such Mortgage Loan, plus
accrued and unpaid interest thereon from the date to which interest
and last paid through the day prior to the repurchase date at the
applicable Mortgage Interest Rate, plus any outstanding advances
owed to any servicer in connection with such Mortgage Loan.
Notwithstanding the foregoing, with respect to the first scheduled
payment of principal and interest due following the related Closing
Date, such payment shall not be considered a "First Payment Default"
for purposes of this provision until the payment has not been
received by the Purchaser within forty-five (45) days of the related
Due Date. The Purchaser shall have ninety (90) days following such
forty-five (45) day period to notify the Seller and request a
repurchase and the Seller shall repurchase such delinquent Mortgage
Loan within thirty (30) days of receipt of such notice.
Notwithstanding the foregoing, the Purchaser reserves the right to
request a repurchase following such ninety (90) day timeframe in the
event of a NSF return of the related first payment.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
WILMINGTON FINANCE INC.
By:
--------------------------------------
Name:
Title:
WILMINGTON FINANCE, a division of AIG
Federal Savings Bank
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
==============================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
Purchaser
WILMINGTON FINANCE INC.,
Seller
WILMINGTON FINANCE, a division of AIG Federal Savings Bank,
Seller
------------------------------------------------
Dated as of August 1, 2004
Conventional,
Fixed and Adjustable Rate, Subprime Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................
SECTION 2. AGREEMENT TO PURCHASE.......................................
SECTION 3. MORTGAGE SCHEDULES..........................................
SECTION 4. PURCHASE PRICE..............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES...............................
SECTION 6. CONVEYANCE FROM SELLERS TO PURCHASER........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS.............................
SECTION 8. TRANSFER OF SERVICING.......................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS;
REMEDIES FOR BREACH.........................................
SECTION 10. CLOSING.....................................................
SECTION 11. CLOSING DOCUMENTS...........................................
SECTION 12. COSTS.......................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION.................
SECTION 14. THE SELLERS.................................................
SECTION 15. FINANCIAL STATEMENTS........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST..............
SECTION 17. NOTICES.....................................................
SECTION 18. SEVERABILITY CLAUSE.........................................
SECTION 19. COUNTERPARTS................................................
SECTION 20. GOVERNING LAW...............................................
SECTION 21. INTENTION OF THE PARTIES....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT....
SECTION 23. WAIVERS.....................................................
SECTION 24. EXHIBITS....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES.............................
SECTION 26. REPRODUCTION OF DOCUMENTS...................................
SECTION 27. FURTHER AGREEMENTS..........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE......................
SECTION 29. NO SOLICITATION.............................................
SECTION 30. WAIVER OF TRIAL BY JURY.....................................
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS...
SECTION 32. OBLIGATIONS JOINT AND SEVERAL...............................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D [RESERVED]
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of August 1, 2004, by and among Xxxxxx Xxxxxxx Mortgage
Capital Inc., a New York corporation, having an office at 1221 Avenue of the
Americas, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), WILMINGTON
FINANCE INC., a Delaware corporation, having an office at 000 Xxxxxxxx Xxxx,
Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000 and WILMINGTON FINANCE, a
division of AIG Federal Savings Bank, a federally chartered savings bank, having
an office at having an office at 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Meeting,
Pennsylvania 19462 (each a "Seller" and, together, the "Sellers").
W I T N E S S E T H:
WHEREAS, the Sellers desire to sell, from time to time, to the
Purchaser on a nonexclusive basis, and the Purchaser desires to purchase, from
time to time, from the Sellers, without recourse to the Sellers but subject to
the terms of this Agreement, certain first and second lien, adjustable-rate and
fixed-rate subprime residential mortgage loans (the "Mortgage Loans") on a
servicing released basis as described herein, and which shall be delivered in
pools of whole loans (each, a "Mortgage Loan Package") on various dates as
provided herein (each, a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Sellers wish to prescribe the manner
of the conveyance, servicing by the Sellers and control of the Mortgage Loans;
and
WHEREAS, following its purchase of the Mortgage Loans from the
Sellers, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and each
of the Sellers agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
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 Loan in the
jurisdiction where the related Mortgaged Property is located.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
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 and Conveyance Agreement: As defined in Subsection 6.01.
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 sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which either Seller's servicing operations are located or (iii)
the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Sellers from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
applicable Seller in accordance with the terms of this Agreement.
Determination Date: The second Business Day of the month in which
the related Remittance Date occurs.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Eligible Account: Any of (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by Standard & Poor's or
Prime-1 by Moody's (or a comparable rating if another Rating Agency is specified
by the Purchaser by written notice to the Sellers) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC, or (iii) a trust account or accounts maintained with
a federal or state chartered depository institution or trust company acting in
its fiduciary capacity.
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.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Mae Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 or (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002) "high risk home," or "predatory" loan under any
other applicable federal, state or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees). For avoidance of doubt, the parties agree
that this definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
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 Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Sellers from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the applicable Seller's Mortgage Loan identifying
number; (2) the Mortgagor's name; (3) the street address of the Mortgaged
Property including the city, state and zip code; (4) a code indicating whether
the Mortgagor is self-employed; (5) a code indicating whether the Mortgaged
Property is owner-occupied; (6) the number and type of residential units
constituting the Mortgaged Property; (7) the original months to maturity or the
remaining months to maturity from the related Cut-off Date, in any case based on
the original amortization schedule and, if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (8) with respect
to each First Lien Loan, the Loan-to-Value Ratio at origination, and with
respect to each Second Lien Loan, the CLTV at origination; (9) the Mortgage
Interest Rate as of the related Cut-off Date; (10) the date on which the Monthly
Payment was due on the Mortgage Loan and, if such date is not consistent with
the Due Date currently in effect, such Due Date; (11) the stated maturity date;
(12) the first payment date; (13) the amount of the Monthly Payment as of the
related Cut-off Date; (14) the last payment date on which a payment was actually
applied to the outstanding principal balance; (15) the original principal amount
of the Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the
close of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, a code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (24) a code indicating the documentation style
(i.e., full, alternative or reduced); (25) asset verification (Y/N); (26) the
loan credit classification (as described in the Underwriting Guidelines); (27)
whether such Mortgage Loan provides for a Prepayment Penalty and, if applicable,
the Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a Home Loan; (39) a code indicating whether the
Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percentage of coverage, if applicable; (43)
Appraised Value; (44) appraisal type; (45) automated valuation model (AVM); (46)
appraisal date; and (47) with respect to the related Mortgagor, the
debt-to-income ratio. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the applicable Cut-off Date; and (6) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of each Seller, and delivered to the Purchaser as required
by this Agreement.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Sellers in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and among the Sellers and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, accepted by the Sellers, who had
no interest, direct or indirect, in the Mortgaged Property or in any loan made
on the security thereof, and whose compensation was not affected by the approval
or disapproval of the Mortgage Loan, and such appraiser and the appraisal made
by such appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the applicable Seller for a Deleted Mortgage Loan which must, on
the date of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in the
case of a substitution of more than one mortgage loan for a Deleted Mortgage
Loan, an aggregate principal balance), not in excess of the outstanding
principal balance of the Deleted Mortgage Loan (the amount of any shortfall will
be remitted to the Purchaser by the applicable Seller in accordance with the
terms of this Agreement in the month of substitution); (ii) have a Mortgage
Interest Rate not less than and not more than 1% greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreement: As defined in Section 13.
Reconstitution Date: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The fifth Business Day of any month, beginning with
the first Remittance Date after the related Closing Date.
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Sellers: As defined in the initial paragraph of the Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Seller consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Representations and Warranties: The representations and
warranties set forth in Subsection 9.02(a), (f), (h), (ii), (ll), (mm) and (qq).
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 Sellers 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 Sellers
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Sellers 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.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Sellers shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Sellers in the related
Purchase Price and Terms Agreement.
Underwriting Guidelines: The underwriting guidelines of the Sellers,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Sellers agree to sell from time to time on a nonexclusive basis,
and the Purchaser agrees to purchase from time to time without recourse to the
Sellers but subject to the representations and warranties and terms contained in
this Agreement, Mortgage Loans having an aggregate principal balance on the
related Cut-off Date in an amount as set forth in the related Purchase Price and
Terms Agreement, or in such other amount as agreed by the Purchaser and the
Sellers as evidenced by the actual aggregate principal balance of the Mortgage
Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Sellers from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The applicable Seller shall deliver the related Mortgage Loan
Schedule for the Mortgage Loans to be purchased on a particular Closing Date to
the Purchaser at least five (5) Business Days prior to the related Closing Date.
The related Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with those Mortgage Loans which have not been funded prior to the
related Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Sellers, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Sellers by wire transfer of immediately available funds to an
account designated by the Sellers in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans (minus that portion of any such payment which is allocable to the
period prior to the related Cut-off Date). The outstanding principal balance of
each Mortgage Loan as of the related Cut-off Date is determined after
application of payments of principal due on or before the related Cut-off Date,
to the extent actually collected, together with any unscheduled principal
prepayments collected prior to such Cut-off Date; provided, however, that
payments of scheduled principal and interest paid prior to such Cut-off date,
but to be applied on a Due Date beyond the related Cut-off Date shall not be
applied to the principal balance as of the related Cut-off Date. Such prepaid
amounts shall be the property of the Purchaser and shall be remitted by the
Sellers to the Purchaser on the next Remittance Date.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Sellers shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at the Sellers' place of business in Plymouth Meeting,
Pennsylvania. Such examination may be made by the Purchaser or its designee at
any reasonable time before or after the related Closing Date. If the Purchaser
makes such examination prior to the related Closing Date and reasonably
determines, in good faith, that any Mortgage Loans are unacceptable to the
Purchaser for any reason, such Mortgage Loans shall be deleted from the related
Mortgage Loan Schedule, and may be replaced, at the applicable Seller's option,
by a Qualified Substitute Mortgage Loan (or Loans) acceptable to the Purchaser.
The Purchaser may, at its option and without notice to the Sellers, purchase
some or all of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the Purchaser's (or any of its successor's) rights to demand
repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Sellers to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Sellers shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Sellers shall cause the Servicing File retained by
the Sellers pursuant to this Agreement to be appropriately identified in the
Sellers' computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Sellers
shall release from their custody the contents of any Servicing File retained by
it only in accordance with this Agreement.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the applicable Seller, an Affiliate of the applicable Seller,
the Purchaser or one or more designees of the Purchaser, as the Purchaser shall
select. Notwithstanding the foregoing, each Mortgage and related Mortgage Note
shall be possessed solely by the Purchaser or the appropriate designee of the
Purchaser, as the case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Sellers after the
related Cut-off Date on or in connection with a Mortgage Loan shall be vested in
the Purchaser or one or more designees of the Purchaser; provided, however, that
all funds received on or in connection with a Mortgage Loan shall be received
and held by the Sellers in trust for the benefit of the Purchaser or the
appropriate designee of the Purchaser, as the case may be, as the owner of the
Mortgage Loans pursuant to the terms of this Agreement.
The Sellers shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which shall
be marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Sellers shall maintain in their possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of prudent mortgage lenders who
originate mortgage loans similar to the Mortgage Loans in the jurisdiction where
the Mortgaged Property is located, including but not limited to documentation as
to the method used in determining the applicability of the provisions of the
National Flood Insurance Act of 1968, as amended, to the Mortgaged Property and
documentation evidencing insurance coverage. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Sellers may be in the form of
microfilm or microfiche so long as the Sellers comply with the requirements of
the Xxxxxx Xxx Guides or prudent mortgage lenders who originate mortgage loans
similar to the Mortgage Loans in the jurisdiction where the Mortgaged Property
is located.
The sale of each Mortgage Loan shall be reflected on the applicable
Seller's balance sheet and other financial statements as a sale of assets by the
applicable Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Sellers shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Sellers shall comply with
the terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Sellers shall forward to the Custodian, or after the related
Closing Date, to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Sellers shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office or title closing agent to
be a true and complete copy of the original within ninety days of its submission
for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the applicable Seller does not cure such failure within 30
days of discovery or receipt of written notification of such failure from the
Purchaser, the related Mortgage Loan shall, upon the request of the Purchaser,
be repurchased by such Seller at the price and in the manner specified in
Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that such Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that such Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of a servicing officer of such Seller, confirming that
such documents have been accepted for recording; provided that, upon request of
the Purchaser and delivery by the Purchaser to the Seller of a schedule of the
related Mortgage Loans, such Seller shall reissue and deliver to the Purchaser
or its designee said officer's certificate.
The Sellers shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Sellers for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Sellers shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
shall include evaluating and monitoring the overall quality of the Sellers' loan
production and servicing activities. The program is to ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors and
omissions by officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Sellers to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement, the Sellers hereby sell, transfer, assign, convey and deliver to
the Purchaser the Servicing Rights.
The Purchaser shall retain the Sellers as contract servicers of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions set forth in this section provided that if the related
Transfer Date has not occurred on or prior to the date which is 60 days after
the related Closing Date, the Purchaser and the Sellers hereby agree to
negotiate in good faith and enter into a more detailed interim servicing
agreement mutually acceptable to the parties. The Sellers shall service the
Mortgage Loans on an "actual/actual" basis and otherwise in accordance with the
Accepted Servicing Practices and the following provisions of this section. The
Sellers shall not be entitled to a servicing fee in connection with the
servicing of any Mortgage Loan hereunder.
In servicing the Mortgage Loans, the Sellers shall comply with all
applicable laws, rules and regulations with respect thereto. The Sellers shall
take no action with respect to any Mortgage Loan, including entering into any
litigation, or any agreement with the related Mortgagor, without the prior
written consent of the Purchaser. The Sellers shall promptly notify the
Purchaser in writing of any action which should be taken with respect to any
Mortgage Loan in accordance with Accepted Servicing Practices. The Sellers shall
take no action, and shall not refrain from taking action, which, in either case,
(a) would impair the ability of the Purchaser to realize on or enforce the
Mortgage Note or the lien of the Mortgage or any other document related thereto
or (b) would jeopardize the rights or remedies available to the Purchaser with
respect to any Mortgage Loan or otherwise impair the ability of the Purchaser to
realize on the Mortgaged Property with respect to such Mortgage Loan.
The Sellers shall be obligated to make all advances on the Mortgage
Loans with respect to taxes and insurance premiums due and owing (the "T&I
Servicing Advances"). Any other servicing advances in excess of $500 shall be
made with the prior written consent of the Purchaser. The Sellers shall be
required to notify the Purchaser in writing of all advances in excess of $500
required to be made in order to further protect and preserve the Purchaser's
interest in the Mortgage Loans and the underlying Mortgaged Property (the "Other
Servicing Advances," together with the T&I Servicing Advances, the "Servicing
Advances"), and shall make such Other Servicing Advances in a timely fashion
unless otherwise instructed by the Purchaser. The Sellers shall be entitled to
reimbursement for all Servicing Advances from the Purchaser within 15 Business
Days following the Transfer Date.
The Sellers shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans, including Escrow Payments, separate and
apart from any of their own funds and general assets in one or more Eligible
Accounts.
The Sellers shall remit to the Purchaser on each Remittance Date all
amounts received from any source with respect to the Mortgage Loans. On or prior
to each Remittance Date the Sellers shall deliver to the Purchaser a remittance
advice in electronic format acceptable to the Purchaser as to the accompanying
remittance and the period ending on the related Determination Date and shall
additionally specify the number of days which each Mortgage Loan is delinquent,
and shall contain an explanation of all Servicing Advances made, the status of
all Mortgage Loans in foreclosure or otherwise the subject of litigation, and
the status of all other collection efforts with respect to each Mortgage Loan.
Each Seller, both jointly and severally, shall indemnify and hold
harmless the Purchaser from and against any and all losses, claims or causes of
actions resulting from the breach by either Seller of any of the covenants set
forth herein.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Sellers shall
cease all servicing responsibilities related to, the related Mortgage Loans
subject to such Transfer Date. The Transfer Date shall be the date determined in
accordance with Section 7 herein.
On or prior to the applicable Transfer Date, the Sellers shall, at
their sole cost and expense, take such steps as may be necessary or appropriate
to effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Sellers shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Sellers shall provide the Purchaser with copies
of all such related notices no later than the Transfer Date.
(b) Notice to Insurance Companies. The Sellers shall transmit to the
applicable insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Sellers shall provide the
Purchaser with copies of all such notices no later than the Transfer Date.
(c) Delivery of Servicing Records. The Sellers shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Sellers' possession relating to each related Mortgage Loan.
(d) Escrow Payments. The Sellers shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Sellers shall provide the Purchaser with an
accounting statement, in electronic format acceptable to the Purchaser in its
sole discretion, of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Sellers shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Sellers.
(e) Payoffs and Assumptions. The Sellers shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Sellers on the related Mortgage Loans from the related Cut-off
Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Sellers on each related Mortgage Loan
shall be properly applied by the Sellers to the account of the particular
Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Sellers after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the Business Day
following the date of receipt. The Sellers shall notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied if
the Sellers forward with their payment sufficient information to permit
appropriate processing of the payment by the Purchaser. The Sellers shall assume
full responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Sellers after the Transfer Date with respect to
related Mortgage Loans then in foreclosure or bankruptcy; provided, for purposes
of this Agreement, necessary and appropriate legal application of such Monthly
Payments shall include, but not be limited to, endorsement of a Monthly Payment
to the Purchaser with the particulars of the payment such as the account number,
dollar amount, date received and any special Mortgagor application instructions
and the Sellers shall comply with the foregoing requirements with respect to all
Monthly Payments received by the Sellers after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer
Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage, the Sellers shall be liable for the amount of such shortage. The
Sellers shall reimburse the Purchaser for the amount of such shortage
within thirty (30) days after receipt of written demand therefor from the
Purchaser;
(iv) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party
shorted by the improper payment application within seven (7) Business Days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h) shall
be accompanied by a statement indicating the corresponding Seller and/or
the Purchaser Mortgage Loan identification number and an explanation of
the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Sellers with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Sellers shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Sellers and the Purchaser as appropriate.
(k) IRS Forms. The Sellers shall file all IRS forms 1099, 1099A,
1098 or 1041 and K-1 which are required to be filed on or before the Transfer
Date in relation to the servicing and ownership of the related Mortgage Loans.
The Sellers shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to either Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Sellers;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
Each Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. Wilmington Finance Inc. is a
Delaware corporation, validly existing, and in good standing under the laws of
its jurisdiction of incorporation. Wilmington Finance, a division of AIG Federal
Savings Bank, is a federally chartered savings bank, validly existing, and in
good standing under the laws of its jurisdiction of formation. The Seller has
all licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in the states where the 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 Seller. The Seller has
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement has been duly
executed and delivered and constitutes the valid, legal, binding and enforceable
obligation of the Seller, except as enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or
other similar laws affecting the enforcement of the rights of creditors and (ii)
general principles of equity, whether enforcement is sought in a proceeding in
equity or at law. All requisite action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of 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 Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller 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 Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or 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 Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws, including with respect to the legitimacy of
the applicable Mortgagor and the origin of the assets used by the said Mortgagor
to purchase the property in question, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. There has been no change in the
business, operations, financial condition, properties or assets of the Seller
since the date of the Seller's financial statements that would have a material
adverse effect on its ability to perform its obligations under this Agreement.
The Seller has completed any forms reasonably requested by the Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished by or on behalf of the Seller pursuant to this
Agreement or any Reconstitution Agreement or in connection with the transactions
contemplated hereby (including any Securitization Transfer or Whole Loan
Transfer) contains or (up to the applicable Transfer Date) will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans to the Purchaser pursuant to this
Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan; and
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
Each Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within thirty
(30) days thereafter, all in accordance with the terms of the related Mortgage
Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac or those of prudent mortgage lenders who originate mortgage loans
similar to the Mortgage Loans in the jurisdiction where the related Mortgaged
Property is located. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac requirements or
those of prudent mortgage lenders who originate mortgage loans similar to the
Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located. All individual insurance policies contain a standard mortgagee clause
naming the Seller and its successors and assigns as mortgagee, and all premiums
thereon have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain the hazard insurance policy at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. No portion of the Mortgaged Property is used for
commercial purposes, and since the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law) and
perfected, first lien (with respect to a First Lien Loan) or second lien (with
respect to a Second Lien Loan) on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(A) with respect to a Second Lien Loan only, the lien of
the first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and
assessments not yet due and payable;
(C) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in equity or
at law), and perfected first lien (with respect to a First Lien Loan) or second
lien (with respect to a Second Lien Loan) and first priority (with respect to a
First Lien Loan) or second priority (with respect to a Second Lien Loan)
security interest on the property described therein and the Seller has full
right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties) except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law). All parties
to the Mortgage Note, the Mortgage and any other such related agreement had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage other than any amounts
placed in a tax or insurance escrow account pursuant to the Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement except for any warehouse liens that will be released
simultaneously with the sale of the Mortgage Loan to the Purchaser, and
following the sale of each Mortgage Loan, the Purchaser will own such Mortgage
Loan free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest. The Seller intends to relinquish all
rights to possess, control and monitor the Mortgage Loan. After the related
Closing Date, the Seller will have no right to modify or alter the terms of the
sale of the Mortgage Loan and the Seller will have no obligation or right to
repurchase the Mortgage Loan or substitute another Mortgage Loan, except as
provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Propert, except for deminimis encroachments acceptable to a
prudent mortgage lender that originates mortgage loans similar to the Mortgage
Loan in the jurisdiction where the Mortgaged Property is located that will have
no adverse affect on the value of the property, provided that any such
encroaching improvements are stated in the applicable title insurance policy and
affirmatively insured over. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. Principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as set forth on
the related Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. The Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Xxx and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause prudent private institutional investors who invest in mortgage loans
similar to the Mortgage Loan to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, or cause the Mortgage Loans to prepay
during any period materially faster or slower than the mortgage loans originated
by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Mae and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller
executed and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest
Rate and the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. To the best of the Seller's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, accepted by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, if applicable to the Seller, where required or customary in
the jurisdiction in which the Mortgaged Property is located, the original lender
has filed for record a request for notice of any action by the related senior
lienholder, and the Seller has notified the senior lienholder in writing of the
existence of the Second Lien Loan and requested notification of any action to be
taken against the Mortgagor by the senior lienholder. Either (a) no consent for
the Second Lien Loan is required by the holder of the related first lien or (b)
such consent has been obtained and is contained in the Mortgage File;
(rr) [Reserved];
(ss) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground lease
will not terminate earlier than five years after the maturity date of the
Mortgage Loan; (3) the ground lease does not provide for termination of the
lease in the event of lessee's default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default; (4)
the ground lease permits the mortgaging of the related Mortgaged Property; (5)
the ground lease protects the mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Either (x) each Mortgage Loan is covered
by a paid in full, life of loan, tax service contract, and such contract is
transferable, or (y) on the related Closing Date the Purchaser shall net $75.00
per Mortgage Loan from the related Purchase Price to cover the cost of such a
tax service contract;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded, or has been
sent for recording, and all subsequent assignments of the original Mortgage
(other than the assignment to the Purchaser) have been recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or is in the process of being
recorded;
(ggg) Mortgagor Bankruptcy. On or prior to the related Closing Date,
the Mortgagor has not filed and will not file a bankruptcy petition or has not
become the subject and will not become the subject of involuntary bankruptcy
proceedings or has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect of
the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not previously been
offered for sale to and been rejected by another investor for material reasons
of credit compliance or valuation;
(iii) [Reserved];
(jjj) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Originator or any Affiliate of the Originator. If, at the
time of loan application, the Mortgagor may have qualified for a lower-cost
credit product then offered by any mortgage lending Affiliate of the Originator,
the Originator referred the related Mortgagor's application to such Affiliate
for underwriting consideration;
(kkk) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(lll) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) Seller has
non-prepayment programs available to Mortgagors, (iii) the prepayment premium is
disclosed to the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state or federal
law to the contrary, the Originator, as servicer, shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the related Mortgagor's default in making the Mortgage Loan payments;
(mmm) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(nnn) [Reserved];
(ooo) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(ppp) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either Seller or by the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other; however, in any event, such
notice by Purchaser must be made to the applicable Seller within sixty (60) days
of the Purchaser's discovery of such breach. In the event that the Purchaser
does not deliver such notice within the sixty (60) day timeframe then the
Purchaser shall forfeit its right to require such Seller to repurchase the
applicable Mortgage Loan.
Within 60 days of the earlier of either discovery by or notice to
the applicable Seller of any such breach of a representation or warranty, which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Purchaser therein (or which materially and adversely affects the value of
the applicable Mortgage Loan or the interest of the Purchaser therein in the
case of a representation and warranty relating to a particular Mortgage Loan),
such Seller shall use its best efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, such Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the applicable Seller of any breach of the
representations or warranties set forth in Paragraph (zz), (aaa), (bbb), (ccc),
(jjj), (kkk), (lll), (mmm), (ooo) and (ppp) of Subsection 9.02, such Seller
shall repurchase such Mortgage Loan at the Repurchase Price. In the event that a
breach shall involve any representation or warranty set forth in Subsection
9.01, and such breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the applicable Seller of such breach, all of the
Mortgage Loans affected by such breach shall, at the Purchaser's option, be
repurchased by such Seller at the Repurchase Price. However, if the breach shall
involve a representation or warranty set forth in Subsection 9.02 (except as
provided in the second sentence of this paragraph with respect to certain
breaches for which no substitution is permitted) and the applicable Seller
discovers or receives notice of any such breach within 120 days of the related
Closing Date, such Seller shall, at such Seller's option and provided that such
Seller has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted Mortgage
Loan") and substitute in its place a Qualified Substitute Mortgage Loan or
Loans, provided that any such substitution shall be effected not later than 120
days after the related Closing Date. If such Seller has no Qualified Substitute
Mortgage Loan, it shall repurchase the deficient Mortgage Loan at the Repurchase
Price. Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing
provisions of this Subsection 9.03 shall be accomplished by direct remittance of
the Repurchase Price to the Purchaser or its designee in accordance with the
Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
applicable Seller shall arrange for the reassignment of the Deleted Mortgage
Loan to such Seller and the Purchaser shall reassign the Mortgage Loan affected
and any right it may have in the relevant Mortgaged Property to such Seller free
and clear of all liens, encumbrances, claims, or interest of any person or
entity claiming by, through, or under the Purchaser without recourse and shall
execute and deliver to such Seller in recordable form an assignment of the
Purchaser's beneficial interest in the affected Mortgage, as well as other
documents necessary to reflect the reassignment of any title protection and
insurance policies, and the delivery to such Seller of any documents held by the
Custodian relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the applicable Seller shall, simultaneously with such
reassignment, give written notice to the Purchaser that such repurchase or
substitution has taken place, amend the Mortgage Loan Schedule to reflect the
withdrawal of the Deleted Mortgage Loan from this Agreement, and, in the case of
substitution, identify a Qualified Substitute Mortgage Loan and amend the
related Mortgage Loan Schedule to reflect the addition of such Qualified
Substitute Mortgage Loan to this Agreement. In connection with any such
substitution, the applicable Seller shall be deemed to have made as to such
Qualified Substitute Mortgage Loan the representations and warranties set forth
in this Agreement except that all such representations and warranties set forth
in this Agreement shall be deemed made as of the date of such substitution. The
applicable Seller shall effect such substitution by delivering to the Custodian
or to such other party as the Purchaser may designate in writing for such
Qualified Substitute Mortgage Loan the documents required by Subsection 6.03 and
the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The applicable
Seller shall remit directly to the Purchaser, or its designee in accordance with
the Purchaser's instructions the Monthly Payment due, if any, on such Qualified
Substitute Mortgage Loan or Loans in the month following the date of such
substitution. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution shall be retained by the applicable Seller.
For the month of substitution, distributions to the Purchaser shall include the
Monthly Payment due on any Deleted Mortgage Loan in the month of substitution,
and the applicable Seller shall thereafter be entitled to retain all amounts
subsequently received by such Seller in respect of such Deleted Mortgage Loan.
For any month in which either Seller substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, such Seller shall
determine the amount (if any) by which the aggregate principal balance of all
Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the applicable Seller
directly to the Purchaser or its designee in accordance with the Purchaser's
instructions within two (2) Business Days of such substitution.
As to each Mortgage Loan, on and after the date servicing is
transferred from the Sellers to the Purchaser and until such time as the
servicing for such Mortgage Loan in reassigned to Sellers, the Purchaser or its
designee shall service such Mortgage Loan in conformance and accordance with the
servicing practices that Purchaser or its designee would follow in servicing
residential mortgage loans held for its own account, giving due consideration to
those mortgage servicing practices of prudent mortgage lending institutions that
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
In addition to such repurchase or substitution obligation, each of
the Sellers, both jointly and severally, shall indemnify the Purchaser and its
present and former directors, officers, employees and agents and any Successor
Servicer and its present and former directors, officers, employees and agents
and hold such parties harmless against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of either Seller's
representations and warranties contained in this Agreement or any Reconstitution
Agreement. It is understood and agreed that the obligations of the Sellers set
forth in this Subsection 9.03 to cure, substitute for or repurchase a defective
Mortgage Loan and to indemnify the Purchaser and Successor Servicer as provided
in this Subsection 9.03 and in Subsection 14.01 constitute the sole remedies of
the Purchaser respecting a breach of the foregoing representations and
warranties. For purposes of this paragraph "Purchaser" shall mean the Person
then acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer" shall
mean any Person designated as the Successor Servicer pursuant to this Agreement
and any and all Persons who previously were "Successor Servicers" pursuant to
this Agreement.
Any cause of action against either Seller relating to or arising out
of the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by either Seller to the Purchaser, (ii) failure
by the applicable Seller to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the applicable Seller by the Purchaser
for compliance with this Agreement.
Notwithstanding the above, in no event shall the indemnifying party
be liable to the indemnified party for any punitive, special, incidental,
indirect or consequential damages, including but not limited to, lost profits.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan, or (ii) after the related Closing Date is not paid to the
Purchaser within thirty (30) days of such Due Date, the applicable Seller, at
the Purchaser's option, shall repurchase such Mortgage Loan within thirty (30)
days thereafter at a price equal to the Repurchase Price, as further described
in the related Purchase Price and Terms Agreement; provided, however, that the
Purchaser shall give such Seller notice of any such default within ninety (90)
days of the related Due Date.
Subsection 9.05 [Reserved].
Subsection 9.06 Premium Recapture. With respect to any Mortgage Loan
without prepayment penalties that prepays in full during the first six months
following the related Closing Date, the applicable Seller shall pay the
Purchaser, within seven (7) Business Days after Purchaser notifies such Seller
in writing (with backup documentation) of such prepayment, such prepayment in
full, an amount equal to the excess of the Purchase Price Percentage for such
Mortgage Loan over par, multiplied by the outstanding principal balance of such
Mortgage Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Sellers shall deliver to the Purchaser a magnetic diskette, or
transmit by modem, a listing on a loan-level basis of the necessary
information to compute the Purchase Price of the Mortgage Loans delivered
on such Closing Date (including accrued interest), and prepare a Mortgage
Loan Schedule;
(ii) all of the representations and warranties of the Sellers 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;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Sellers shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Sellers on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Sellers.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) with respect to the initial Closing Date, the
Custodial Agreement, dated as of the initial Cut-off Date;
(3) the related Mortgage Loan Schedule (one copy to be
attached to the Custodian's counterpart of the Custodial
Agreement in connection with the initial Closing Date, and one
copy to be attached to the related Assignment and Conveyance
as the Mortgage Loan Schedule thereto);
(4) a Custodian's Certification, as required under the
Custodial Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
(5) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Sellers, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(6) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(7) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(8) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by
either Seller by merger or acquired or originated by either
Seller while conducting business under a name other than its
present name, if applicable;
(9) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto; and
(10) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance.
The Sellers shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Sellers' attorney's fees, shall be paid by the Sellers.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Sellers and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Sellers agree to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Sellers among the Purchaser, the Sellers and any servicer in connection with
a Whole Loan Transfer, a sellers' warranties and servicing agreement or a
participation and servicing agreement in form and substance reasonably
acceptable to the parties, and in connection with a Securitization Transfer, an
Assignment and Recognition Agreement substantially in the form attached hereto
as Exhibit I (each, a "Reconstitution Agreement").
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Sellers agree (1) to reasonably
cooperate with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform a Reconstitution Agreement as required by the Purchaser; (3) to restate
the representations and warranties set forth in Subsection 9.01 of this
Agreement as of the applicable Reconstitution Date and restate the
representations and warranties set forth in Subsection 9.02 of this Agreement as
of the applicable Closing Date; provided, however, that the Sellers shall
restate the Servicing Representations and Warranties set forth in Subsection
9.02 of this Agreement as of the applicable Transfer Date. The Sellers shall
provide to such servicer or issuer, as the case may be, and any other
participants or purchasers in such Reconstitution: (i) any and all reasonable
information and appropriate verification of information which may be reasonably
available to the Sellers or their affiliates, whether through letters of its
auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request; (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Sellers as are reasonably believed necessary
by the Purchaser or any such other participant; and (iii) to execute, deliver
and satisfy all conditions set forth in any indemnity agreement reasonably
required by the Purchaser or any such participant. Moreover, the Sellers agree
to cooperate with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreement. The Sellers shall indemnify the Purchaser, each
affiliate of the Purchaser participating in the Reconstitution, each underwriter
or placement agent participating in the Reconstitution and each Person who
controls the Purchaser, such affiliate, underwriter or placement agent and their
respective present and former directors, officers, employees and agents, and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that each of them may sustain arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the information provided by or on behalf of either Seller
regarding either Seller, the Mortgage Loans or the Underwriting Guidelines set
forth in any offering document (including, without limitation, structural term
sheets, collateral term sheets and computational materials) prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement.
In the event the Purchaser has elected to have the Sellers hold
record title to the Mortgages, prior to the Reconstitution Date, the Sellers
shall prepare an assignment of mortgage in blank from the Sellers, acceptable to
the prospective purchaser or trustee, as applicable, for each Mortgage Loan that
is part of the Reconstitution and shall pay all preparation and recording costs
associated therewith. In connection with the Reconstitution, the Sellers shall
execute each assignment of mortgage.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Sellers.
Subsection 14.01 Additional Indemnification by the Sellers; Third
Party Claims.
(a) The Sellers, both jointly and severally, shall indemnify the
Purchaser and its present and former directors, officers, employees and agents
and any Successor Servicer and its present and former directors, officers,
employees and agents, and hold such parties harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, legal fees and expenses
(including legal fees and expenses incurred in connection with the enforcement
of the Sellers' indemnification obligation under this Subsection 14.01) and
related costs, judgments, and any other costs, fees and expenses that such
parties may sustain in any way related to the failure of either Seller to
perform its duties and to service the Mortgage Loans in strict compliance with
the terms of this Agreement or any Reconstitution Agreement entered into
pursuant to Section 13 or any breach of any of either Seller's representations,
warranties and covenants set forth in this Agreement (provided that such costs
shall not include any lost profits). For purposes of this paragraph "Purchaser"
shall mean the Person then acting as the Purchaser under this Agreement and any
and all Persons who previously were "Purchasers" under this Agreement and
"Successor Servicer" shall mean any Person designated as the Successor Servicer
pursuant to this Agreement and any and all Persons who previously were
"Successor Servicers" pursuant to this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02 Merger or Consolidation of the Sellers.
The Sellers will keep in full effect their existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which either Seller may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which either Seller shall be a party, or any Person succeeding to the business
of either Seller, shall be the successor of such Seller 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 have a net worth of at
least $25,000,000.
SECTION 15. Financial Statements.
The Sellers understand that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Sellers for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Sellers at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Sellers shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Sellers
(and are available upon request to members or stockholders of the Sellers or the
public at large). The Sellers, if they have not already done so, agree to
furnish promptly to the Purchaser copies of the statements specified above.
The Sellers also agree to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Sellers or
the financial statements of the Sellers.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of either Seller's failure to deliver (i) each of
the related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser
on or before the related Closing Date. The Sellers hereby grant to the Purchaser
a lien on and a continuing security interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Sellers of their obligations under the related Purchase Price
and Terms Agreement, and the Sellers agree that they shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to either Seller:
Wilmington Finance Inc.
Wilmington Finance, a division of AIG Federal Savings Bank
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. 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 (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
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 nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. 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 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser 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 substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Sellers are selling the Mortgage Loans and not a debt instrument of
either Seller or another security. Accordingly, the parties hereto each intend
to treat the transaction for Federal income tax purposes as a sale by the
Sellers, and a purchase by the Purchaser, of the Mortgage Loans. Moreover, the
arrangement under which the Mortgage Loans are held shall be consistent with
classification of such arrangement as a grantor trust in the event it is not
found to represent direct ownership of the Mortgage Loans. The Purchaser shall
have the right to review the Mortgage Loans and the related Mortgage Loan Files
to determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Sellers
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Sellers and the Purchaser and the respective permitted
successors and assigns of each Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Sellers to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Sellers. There shall be no limitation on the number of
assignments or transfers allowable by the Purchaser with respect to the Mortgage
Loans and this Agreement. In the event the Purchaser assigns this Agreement, and
the assignee assumes any of the Purchaser's obligations hereunder, the Sellers
acknowledge and agree to look solely to such assignee, and not to the Purchaser,
for performance of the obligations so assumed and the Purchaser shall be
relieved from any liability to the Sellers with respect thereto.
SECTION 23. 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 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. 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) 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 without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Sellers and the Purchaser 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 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Sellers' expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Sellers agree that they
will not take any action or permit or cause any action to be taken by any of
their agents or affiliates, or by any independent contractors on either Seller's
behalf, to personally, by telephone or mail (via electronic means or otherwise),
solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed that the
Sellers, or any of their respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in their portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Sellers and any of their affiliates (those it owns as well as those
serviced for others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact them about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Sellers or by any affiliate of either
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLERS AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Governing Law Jurisdiction; Consent to Service of
Process.THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLERS
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
SECTION 32. Obligations Joint and Several.Each Seller hereby
acknowledges and agrees that it shall be jointly and severally liable to the
Purchaser for all representations, warranties, covenants, obligations and
indemnities of the Sellers hereunder.
[Signature Page Follows]
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
WILMINGTON FINANCE INC.
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
WILMINGTON FINANCE, a division of AIG
Federal Savings Bank
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Sellers that
state law so allows. If the Mortgage Loan was acquired by either Seller in
a merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the applicable Seller cannot deliver or
cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, such Seller shall
deliver or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of such Seller (or certified by
the title company, escrow agent, or closing attorney) stating that such
Mortgage has been dispatched to the appropriate public recording office
for recordation and that the original recorded Mortgage or a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered
to the Custodian upon receipt thereof by such Seller; or (ii) in the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage
must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage
investors in the area where the Mortgaged Property is located or on
direction of the Purchaser as provided in this Agreement. If the
Assignment of Mortgage is to be recorded, the Mortgage shall be assigned
to the Purchaser. If the Assignment of Mortgage is not to be recorded, the
Assignment of Mortgage shall be delivered in blank. If the Mortgage Loan
was acquired by either Seller in a merger, the Assignment of Mortgage must
be made by "[Seller], successor by merger to [name of predecessor]". If
the Mortgage Loan was acquired or originated by either Seller while doing
business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the applicable Seller
to the Last Endorsee with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the
original recorded assignments of mortgage, such Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of such Seller (or certified by
the title company, escrow agent, or closing attorney) stating that such
intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the applicable Seller; or (ii) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be true and
complete by the title insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the applicable Seller to be a true and correct copy of the
original.
In the event an Officer's Certificate of either Seller is delivered
to the Purchaser because of a delay caused by the public recording office in
returning any recorded document, such Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian; provided, however, that any recorded document shall
in no event be delivered later than one year following the related Closing Date.
An extension of the date specified in clause (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT B
[RESERVED]
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________ [COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
(i) Attached hereto as Exhibit 1 is a true, correct and complete
copy of the charter of the Company which is in full force and effect on
the date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
(ii) Attached hereto as Exhibit 2 is a true, correct and complete
copy of the bylaws of the Company which are in effect on the date hereof
and which have been in effect without amendment, waiver, rescission or
modification since ___________.
(iii) Attached hereto as Exhibit 3 is an original certificate of
good standing of the Company issued within ten days of the date hereof,
and no event has occurred since the date thereof which would impair such
standing.
(iv) Attached hereto as Exhibit 4 is a true, correct and complete
copy of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver (a) the Mortgage Loan
Purchase and Warranties Agreement, dated as of August 1, 2004 (the
"Purchase Agreement"), by and between Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Purchaser") and the Company and (b) the Custodial Agreement, dated
as of August 1, 2004 (the "Custodial Agreement"), by and among the
Purchaser, the Company, and [CUSTODIAN] (the "Custodian"), [and to endorse
the Mortgage Notes and execute the Assignments of Mortgages by original
[or facsimile] signature], and such resolutions are in effect on the date
hereof and have been in effect without amendment, waiver, rescission or
modification since ____________.
(v) Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, [the sale of the mortgage loans] or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
(vi) Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of the Purchase Agreement conflicts or
will conflict with or results or will result in a breach of or constitutes
or will constitute a default under the charter or by-laws of the Company
or, to the best of my knowledge, the terms of any indenture or other
agreement or instrument to which the Company is a party or by which it is
bound or to which it is subject, or any statute or order, rule,
regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which
it is bound.
(vii) To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Purchase Agreement, or the mortgage loans or of any action taken or to
be taken in connection with the transactions contemplated hereby, or which
would be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
(viii) Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
(ix) The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: By:
-------------------- ---------------------------
Name:
------------------------
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________ [COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
-------------------- ---------------------------
Name:
------------------------
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
------------------------ ---------------------------- ------------------------
------------------------ ---------------------------- ------------------------
------------------------ ---------------------------- ------------------------
------------------------ ---------------------------- ------------------------
------------------------ ---------------------------- ------------------------
------------------------ ---------------------------- ------------------------
------------------------ ---------------------------- ------------------------
EXHIBIT D
[RESERVED]
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______ (the "Association")]
--------------------------
--------------------------
--------------------------
Attention:
-------------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________ [COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Mortgage Loan Purchase and
Warranties Agreement. The Company warrants that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
----------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
--------------------------
----------------------------
By:
---------------------------
Name:
-------------------------
Title:
-------------------------
Date:
--------------------------
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Mortgage Loan Purchase
and Warranties Agreement, dated as of August 1, 2004, and certifies that all
notes, mortgages, assignments and other documents in its possession relating to
such Mortgage Loans have been delivered and released to the Company or its
designees, as of the date and time of the sale of such Mortgage Loans to Xxxxxx
Xxxxxxx Mortgage Capital Inc. Such release shall be effective automatically
without any further action by any party upon payment in one or more
installments, in immediately available funds, of $_____________, in accordance
with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
--------------------------------
--------------------------------
--------------------------------
By:
-----------------------------
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
-----------------------------
By:
-----------------------------
Title:
-------------------------
Date:
---------------------------
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of ____________, ________, Wilmington Finance Inc.
and Wilmington Finance, a division of AIG Federal Savings Bank ("Sellers"), as
the Sellers under (i) that certain Purchase Price and Terms Agreement, dated as
of ________, 200_ (the "PPTA"), and (ii) that certain Mortgage Loan Purchase and
Warranties Agreement, dated as of August 1, 2004 (the "Purchase Agreement"), do
hereby sell, transfer, assign, set over and convey to Xxxxxx Xxxxxxx Mortgage
Capital, Inc. ("Purchaser") as the Purchaser under the Agreements (as defined
below) without recourse, but subject to the terms of the Agreements, all right,
title and interest of, in and to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as Exhibit A (the "Mortgage Loans"), together with the
Mortgage Files and the related Servicing Rights and all rights and obligations
arising under the documents contained therein. Each Mortgage Loan subject to the
Agreements was underwritten in accordance with, and conforms to, the
Underwriting Guidelines attached hereto as Exhibit C. Pursuant to Section 6 of
the Purchase Agreement, the Sellers have delivered to the Custodian the
documents for each Mortgage Loan to be purchased as set forth in the Purchase
Agreement. The ownership of each Mortgage Note, Mortgage and the contents of the
Mortgage File and Servicing File is vested in the Purchaser and the ownership of
all records and documents with respect to the related Mortgage Loan prepared by
or which come into the possession of the Sellers shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Sellers at the
will of the Purchaser in a custodial capacity only. The PPTA and the Purchase
Agreement shall collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
WILMINGTON FINANCE INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
WILMINGTON FINANCE, a division of AIG
Federal Savings Bank
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
---------------------------------
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a CLTV of greater than ____%; (4) a FICO Score of less than ___; or (5) a
debt-to-income ratio of more than ___%. Each Mortgage Loan has a Mortgage
Interest Rate of at least ___% per annum and an outstanding principal balance of
less than $______. Each Adjustable Rate Mortgage Loan has an Index of [______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT H
UNDERWRITING GUIDELINES
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLERS] (the "Company"):
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:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase and Warranties Agreement (the "Purchase Agreement"), dated as of August
1, 2004, between the Assignor, as purchaser (the "Purchaser"), and the Company,
as seller, solely insofar as the Purchase Agreement relates to the Mortgage
Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the applicable Closing Date; provided,
however, that the Seller shall restate the representations and warranties set
forth on Exhibit B that match the Servicing Representations and Warranties as
set forth in Subsection 9.02 of the Purchase Agreement as of the applicable
Transfer Date unless otherwise specifically stated in such representations and
warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. 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, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. 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.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
WILMINGTON FINANCE INC.
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
WILMINGTON FINANCE, a division of AIG
Federal Savings Bank
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
[--------------------------]
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties
Regarding Individual Mortgage Loans
##
EXHIBIT R
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC
00000 Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company, a
national banking association organized and existing under the laws of the United
States, and having its principal place of business at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx, 00000, as Trustee pursuant to that Xxxxxx Xxxxxxx
Home Equity Loan Trust 2005-4 Pooling and Servicing Agreement, dated as of
November 1, 2005, among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, First
NLC Financial Services, LLC, as Responsible Party, JPMorgan Chase Bank, National
Association, as a Servicer, HomEq Servicing Corporation, as a Servicer, LaSalle
Bank National Association, as Custodian, and Deutsche Bank National Trust
Company, as Trustee, hereby constitutes and appoints [JPMorgan] [HomEq], by and
through [HomEq's] [JPMorgan's] officers, the Trustee's true and lawful
Attorney-in-fact, in the Trustee's name, place and stead and for the Trustee's
benefit, in connection with all mortgage loans serviced by [JPMorgan] [HomEq]
pursuant to the Agreement solely for the purpose of performing such acts and
executing such documents in the name of the Trustee necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust"
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which [JPMorgan] [HomEq] is acting as
servicer.
This Appointment shall apply only to the following enumerated transactions and
nothing herein or in the Agreement shall be construed to the contrary:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recording is solely for the purpose
of correcting the Mortgage or Deed of Trust to conform same to
the original intent of the parties thereto or to correct title
errors discovered after such title insurance was issued; provided
that (i) said modification or re-recording, in either instance,
does not adversely affect the lien of the Mortgage or Deed of
Trust as insured and (ii) otherwise conforms to the provisions of
the Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust to
an easement in favor of a public utility company of a government
agency or unit with powers of eminent domain; this section shall
include, without limitation, the execution of partial
satisfactions/releases, partial reconveyances or the execution or
requests to trustees to accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real
estate owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or
full conveyance upon payment and discharge of all sums secured
thereby, including, without limitation, cancellation of the
related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage
loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment
and discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the
assignment of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of
judicial or non-judicial foreclosure or termination, cancellation
or rescission of any such foreclosure, including, without
limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of
Trust, in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary
under the terms of the Mortgage, Deed of Trust or state
law to expeditiously complete said transactions in
paragraphs 8.a. through 8.e. above.
9. With respect to the sale of property acquired through a
foreclosure or deed-in lieu of foreclosure, including, without
limitation, the execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
x. xxxxx/warranty/quit claim deeds or any other deed causing
the transfer of title of the property to a party
contracted to purchase same;
d. escrow instructions; and
e. any and all documents necessary to effect the transfer of
property.
10. The modification or amendment of escrow agreements established
for repairs to the mortgaged property or reserves for replacement
of personal property.
The undersigned gives said Attorney-in-fact full power and
authority to execute such instruments and to do and perform all and every act
and thing necessary and proper to carry into effect the power or powers granted
by or under this Limited Power of Attorney as fully as the undersigned might or
could do, and hereby does ratify and confirm to all that said Attorney-in-fact
shall be effective as of November 29, 2005.
This appointment is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by [JPMorgan] [HomEq] to the Trustee under the
Agreement, or (ii) be construed to grant [JPMorgan] [HomEq] the power to
initiate or defend any suit, litigation or proceeding in the name of Deutsche
Bank National Trust Company except as specifically provided for herein. If
[JPMorgan] [HomEq] receives any notice of suit, litigation or proceeding in the
name of Deutsche Bank National Trust Company or Bankers Trust Company of
California, N.A., then [JPMorgan] [HomEq] shall promptly forward a copy of same
to the Trustee.
This limited power of attorney is not intended to extend the
powers granted to [JPMorgan] [HomEq] under the Agreement or to allow [JPMorgan]
[HomEq] to take any action with respect to Mortgages, Deeds of Trust or Mortgage
Notes not authorized by the Agreement.
[JPMorgan] [HomEq] hereby agrees to indemnify and hold the
Trustee and its directors, officers, employees and agents harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever incurred by reason or result of or in connection with the
exercise by [JPMorgan] [HomEq] of the powers granted to it hereunder. The
foregoing indemnity shall survive the termination of this Limited Power of
Attorney and the Agreement or the earlier resignation or removal of the Trustee
under the Agreement.
This Limited Power of Attorney is entered into and shall be
governed by the laws of the State of New York, without regard to conflicts of
law principles of such state.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as
Trustee has caused its corporate seal to be hereto affixed and these presents to
be signed and acknowledged in its name and behalf by a duly elected and
authorized signatory this ___________ day of ____________.
Deutsche Bank National Trust Company, as Trustee
By:________________________________________________
Name:
Title:
Acknowledged and Agreed
[HomEq Servicing Corporation]
[JPMorgan Chase Bank, National Association]
By: ________________________
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared __________________________ of
Deutsche Bank National Trust Company, as Trustee for Xxxxxx Xxxxxxx Home Equity
Loan Trust 2005-4, personally known to me to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
that same in his/her authorized capacity, and that by his/her signature on the
instrument the entity upon behalf of which the person acted and executed the
instrument.
WITNESS my hand and official seal.
(SEAL)
__________________________________________
Notary Public, State of California
