EXHIBIT 10.6
MORTGAGE LOAN SUBSERVICING AGREEMENT
This MORTGAGE LOAN SUBSERVICING AGREEMENT (the same, as amended or
supplemented from time to time, being this "AGREEMENT"), made and entered
into by and between REMODELERS NATIONAL FUNDING CORP., as servicer (together
with its successors and assigns, being referred to herein as "SERVICER"), and
[NAME OF SUBSERVICER], as subservicer (together with its successors and
assigns, being referred to herein as "SUBSERVICER").
WITNESSETH:
WHEREAS, Subservicer is engaged in the business of servicing mortgage loans
for investors, and Subservicer desires to service certain Loans owned by Owner
and serviced by Servicer; and
WHEREAS, Servicer and Subservicer desire to execute this Agreement to
define each party's rights, duties and obligations relating to the servicing of
Loans.
NOW, THEREFORE, in consideration of these premises and of the mutual
agreements herein set forth, Servicer and Subservicer each agree as follows:
ARTICLE I
DEFINITIONS
Except as otherwise expressly provided herein or unless the context
otherwise requires, the following terms shall have the respective meanings
specified in this Article I for all purposes of this Agreement, and the
definitions of such terms are equally applicable to the singular and plural
forms of such terms and to the masculine, feminine and neuter genders of such
terms.
AGREEMENT: This Subservicing Agreement, including all amendments or
supplements hereto; provided that the foregoing may be deemed to be divided into
separate Agreements with respect to specific Loans.
BUSINESS DAY: Any day other than a Saturday, Sunday or other day on which
banking or thrift institutions located in each of the cities specified in
Servicer's and Subservicer's notice addresses set forth on the execution page
hereof are authorized or obligated by Law to be closed.
COLLECTION ACCOUNT: A deposit account or accounts established and
maintained by Subservicer pursuant to this Agreement, into which all Revenues
shall be deposited. Each Collection Account shall be an Eligible Account and
shall be captioned in a manner to reflect the interest of Owner therein or in
accordance with the instructions of the Servicer pursuant to Section 3.01(b).
CONVENTIONAL MORTGAGE LOAN: Any fixed rate, fully amortizing property
improvement and/or home equity loan, which is not insured or guaranteed by the
FHA or VA, and which is secured by a Mortgage.
DEBTOR RELIEF LAWS: Any applicable liquidation, bankruptcy,
conservatorship, insolvency, rearrangement, moratorium, reorganization, or
similar Laws affecting the rights of creditors generally from time to time in
effect.
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ELIGIBLE ACCOUNT: At any time, an account which is any of the following:
(i) an account maintained with a depository institution (A) the long-term debt
obligations of which are at such time rated by each Rating Agency in one of its
two highest long-term rating categories, or (B) the short-term debt obligations
of which are then rated by each Rating Agency in its highest short-term rating
category; (ii) an account or accounts the deposits in which are fully insured by
either the Bank Insurance Fund or the Savings Association Insurance Fund of the
FDIC; (iii) a trust account (which shall be a "segregated trust account")
maintained with the corporate trust department of a federal or state chartered
depository institution or trust company with trust powers and acting in its
fiduciary capacity for the benefit of the Owner or its designee hereunder, which
depository institution or trust company shall have capital and surplus of not
less than $50,000,000; or (iv) another account that is approved by the Servicer
and, with respect to any Pooled Loans, consented to by each Rating Agency in
writing.
EXPENSE ADVANCES: Subject to SECTION 4.01(b), all reasonable and customary
"out of pocket" costs and expenses advanced or paid by the Subservicer with
respect to the Loans in accordance with the performance by the Subservicer of
its servicing obligations hereunder, including, but not limited to, the costs
and expenses for (i) the preservation, restoration and protection of the
Mortgage Property, including without limitation advances in respect of real
estate taxes and assessments, (ii) any collection, enforcement or judicial
proceedings, including without limitation foreclosures, collections and
liquidations pursuant to SECTION 4.02, (iii) the conservation, management and
sale or other disposition of an REO Property pursuant to SECTION 4.07, and (iv)
the preservation of the security for a Loan if a Superior Lien has accelerated
or intends to accelerate its obligations pursuant to SECTION 4.09; provided that
such Expense Advances are reimbursable to the Subservicer to the extent provided
in SUBSECTION 4.01(b).
FHLMC: Federal Home Loan Mortgage Corporation, or any successor thereto.
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
FHA: The Federal Housing Administration.
FHA CLAIM: With respect to a Title I Mortgage Loan, a claim for
reimbursement of loss properly filed with the FHA under the FHA Insurance
applicable to such Title I Mortgage Loan.
FHA CLAIMS ADMINISTRATION AGREEMENT: With respect to the Title I Mortgage
Loans, an agreement between the Owner and each FHA Claims Administrator relating
to the administration of FHA Claims.
FHA CLAIMS ADMINISTRATOR: With respect to the Title I Mortgage Loans,
initially, the Servicer, who shall serve as such and as agent and attorney-in-
fact for the Owner for purposes of handling all aspects of administering,
processing and submitting FHA Claims, pursuant to an FHA Claims Administration
Agreement; and thereafter, any Person that (i) holds a valid FHA Title I
contract of insurance with and is approved by the FHA to originate, purchase,
service and sell loans insured under the FHA Regulations and (ii) is appointed
as a successor FHA Claims Administrator to the Servicer by the Owner or the
Master Servicer. Notwithstanding the above, the Subservicer shall act as
Servicer's agent in preparing all HUD claim files, analyses, submission reports
and submission forms.
FHA INSURANCE: The mortgage insurance provided by the Federal Housing
Administration pursuant to Title I of the National Housing Act of 1934, as
amended.
FHA REGULATIONS: Section 2 of Title I of the National Housing Act and the
rules, regulations and procedures promulgated thereunder relating to Title I
property improvement loans and loans pertaining to
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 2
manufactured homes and related real property, as the same may be amended and
supplemented from time to time, including without limitation the regulations
at 24 C.F.R. Parts 201 and 202, the HUD Title I Handbook and the HUD "TI
Letters"; provided that with respect to the origination or servicing of a
Title I Mortgage Loan, such rules, regulations and procedures that were in
effect at the time the relevant origination or servicing actions occurred.
FLOOD INSURANCE POLICY: With respect to a Loan, a policy of insurance that
conforms to the Servicing Guidelines in providing coverage against loss
sustained by flood.
HUD. The United States Department of Housing and Urban Development.
INSURANCE PROCEEDS: Payments received with respect to a Loan under any
insurance policy or bond maintained in connection with such Loan, including but
not limited to the FHA Insurance, the Flood Insurance Policy and any other
insurance policies or bonds related to such Loan.
INTERNAL REVENUE SERVICE: The Internal Revenue Service of the United
States.
LAW: Any applicable statute, law, ordinance, regulation, order, writ,
injunction or decree of the United States of America or any agency thereof or
any state or political subdivision or agency thereof or any court of competent
jurisdiction.
LIQUIDATED LOAN: Any defaulted Loan or REO Property as to which the
Subservicer has determined pursuant to SECTIONS 4.01(a), 4.02 AND 4.07, as
applicable, that all amounts which it reasonably and in good faith expects to
recover have been recovered from or on account of such Loan or REO Property,
including a determination that the FHA has paid all FHA Insurance proceeds that
can reasonably and in good faith be expected to be paid in respect of the
related FHA Claim.
LIQUIDATION DATE: With respect to a defaulted Loan or a Loan that has been
foreclosed and as reasonably determined by Subservicer in good faith, the date
of the final receipt of Insurance Proceeds, Liquidation Proceeds or other
payments with respect to such Loan. If the determination of the Liquidation
Date with respect to a Loan is dependent upon the receipt of proceeds from the
related FHA Insurance, then Owner or FHA Claims Administrator will notify
Subservicer of the occurrence of such Liquidation Date following the receipt of
such FHA Insurance proceeds, including proper allocation of principal and
interest.
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds, received in
connection with the liquidation of a defaulted Loan or REO Property, whether
through trustee's sale, foreclosure sale, condemnation, taking under power of
eminent domain, conveyance in lieu of foreclosure or condemnation, judgment or
otherwise.
LOAN: Any Conventional Mortgage Loan or Title I Mortgage Loan, serviced
pursuant to this Agreement, together with the rights and obligations of a holder
thereof and payments thereon and proceeds therefrom. As applicable, Loan shall
be deemed to refer to the related Note, Mortgage, if any, and any related REO
Property acquired through foreclosure of a related Mortgage. With respect to a
Title I Mortgage Loan, the term "Loan" shall include and encompass the FHA
Insurance applicable thereto, the right to file an FHA Claim thereunder and the
right to receive any FHA Insurance proceeds in respect thereof.
LOAN INTEREST RATE: The fixed annual rate of interest borne by a Note.
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MASTER SERVICER: With respect to a Loan, the Person designated in writing
by Owner to act on behalf of Owner in matters relating to the servicing of such
Loan; or, if such designation has not been made, or has been withdrawn by
written notice to Subservicer, then the Servicer.
MONTHLY ACCOUNTING PACKAGE: The group of monthly accounting reports (as
specified in the Servicing Guidelines) to be delivered by Subservicer to
Servicer pursuant to SECTION 4.11.
MONTHLY PAYMENT: The scheduled monthly payment of principal, interest and
any tax and insurance escrow payments required to be made by the Obligor on a
Loan, including with respect to a Title I Mortgage Loan any Title I program
insurance premium.
MONTHLY SERVICING PACKAGE: The group of monthly servicing reports (as
specified in the Servicing Guidelines) to be delivered by Subservicer to
Servicer pursuant to SECTION 4.11.
MORTGAGE: With respect to a Loan, the mortgage, deed of trust or other
instrument securing the related Note which creates a lien or security interest
on the related Mortgage Property, which may be subordinate or junior to any
existing lien, including Superior Liens.
MORTGAGE PROPERTY: With respect to a Loan, the real property, together
with improvements thereon, subject to the lien of the related Mortgage.
NOTE: With respect to a Loan, the promissory note, retail installment
contract or other evidence of indebtedness of the related Obligor.
OBLIGOR: With respect to a Loan, the obligor(s) on the related Note; and
if previously assigned or assumed, the obligor and any other Person responsible
for making payments on the Note.
OFFICER: Any duly authorized officer of Subservicer involved in, or
responsible for, the servicing of Loans.
OWNER: Separately, and with respect to each Loan owned by it, Remodelers
and its successors and assigns.
PERMITTED INSTRUMENTS: Each of the following:
(i) obligations of, or guaranteed as to principal and
interest by, the United States or any agency or instrumentality
thereof when such obligations are backed by the full faith and
credit of the United States;
(ii) repurchase agreements on obligations of, or
guaranteed as to principal and interest by, the United States or
any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States, provided
that the unsecured obligations of the party agreeing to repurchase
such obligations are at the time of purchase rated by each Rating
Agency in one of its two highest long-term rating categories;
(iii) certificates of deposit, time deposits and bankers
acceptances of any United States depository institution or trust
company incorporated under the laws of the United States or any
state; provided that the debt obligations of such depository
institution or trust company at the date of the acquisition thereof
have been rated by each Rating Agency in one of its two highest
long-term rating categories;
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(iv) deposits which are fully insured by the Bank
Insurance Fund or the Savings Association Insurance Fund of the
FDIC, as the case may be;
(v) commercial paper of any corporation incorporated
under the laws of the United States or any state thereof which at
the date of acquisition is rated by each Rating Agency in its
highest short-term rating category and which has an original
maturity of not more than 365 days;
(vi) debt obligations rated by each Rating Agency at the
time at which the investment is made in its highest long-term
rating category (or those investments specified in (iii) above with
depositary institutions which have debt obligations rated by each
Rating Agency in one of its two highest long-term rating
categories);
(vii) money market funds which are rated by each Rating
Agency at the time at which the investment is made in its highest
short-term rating category, any such money market funds which
provide for demand withdrawals being conclusively deemed to satisfy
any maturity requirements for Permitted Instruments set forth
herein; or
(viii) any other demand, money market or time deposit
obligation, security or investment as may be acceptable to the
Servicer or Owner at the time at which the investment is made,
provided that with respect to any Pooled Loans the Servicer or
Owner substantiates that each Rating Agency has consented in
writing to such type of investment;
provided that no instrument described in the foregoing subparagraphs 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 where the
interest and principal payments with respect to such instrument provided a
yield to maturity at par greater than 120% of the yield to maturity at par of
the underlying obligations; and provided, further, that no instrument
described in the foregoing subparagraphs may be purchased at a price greater
than par if such instrument may be prepaid or called at a price less than its
purchase price prior to stated maturity.
PERSON: An individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization or joint venture, or
a court or a government or any agency or political subdivision thereof.
POOLED LOANS: As defined in SECTION 3.01(b).
PRINCIPAL PREPAYMENT: Any Obligor payment of principal or other
recovery of principal on a Loan which is not to be applied to any past or
current Monthly Payment under the Loan, and the portion of any Insurance
Proceeds, Liquidation Proceeds or other collections representing similar
payments of principal.
PURCHASE PRICE PERCENTAGE: With respect to a Loan, the price,
expressed as a percentage of the outstanding principal balance of such Loan,
as paid by Remodelers for such Loan at the time of purchase thereof, but not
including any additions or deductions related to accrued interest or fees.
RATING AGENCY: Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and with respect to any Pooled Loans, any other rating agency as
designated by Servicer in writing.
REMITTANCE DATE: The eighth (8th) Business Day of each month.
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REMITTANCE RECONCILIATION REPORT: The remittance reconciliation
report, in the form prescribed by the Servicing Guidelines, to be provided by
Subservicer to Servicer as a part of the Monthly Accounting Package.
REMODELERS: Remodelers National Funding Corp.
REO PROPERTY: As defined in SECTION 4.07.
REPORTING DATE: With respect to any Remittance Date, the seventh
(7th) Business Day of the month in which such Remittance Date occurs.
REPURCHASE PRICE: With respect to a Loan, the sum of (A) the
greater of 100% or the Purchase Price Percentage multiplied by the
outstanding principal balance of such Loan as of the date of repurchase, plus
(B) accrued and unpaid Monthly Payments other than principal payments, plus
(C) the portion of any Title I Program insurance premium paid by Remodelers
to purchase such Loan or paid subsequent to such purchase and not reimbursed
by the related Obligor.
REVENUES: With respect to a Loan, all moneys received by Subservicer
on behalf of Owner representing (i) payments of principal, interest and tax
and insurance escrow amounts, including any FHA Title I program insurance
premiums, (ii) Insurance Proceeds and Liquidation Proceeds, and (iii)
prepayment penalties and refunds of purchase premiums.
SERVICING FEE: As to each Loan, the fee payable monthly to the
Servicer on each Remittance Date, which shall be the amount equal to (A) the
product of 1.00% times the outstanding principal balance of such Loan as of
the first day of the calendar month immediately preceding such Remittance
Date, (B) divided by 12. The Servicing Fee shall be calculated and payable
monthly only from the amounts received in respect of interest on the Loans
and shall be computed on the basis of the same principal amount and for the
same period respecting which any related interest payment on a given Loan is
computed. The Servicing Fee is payable solely from the interest portion of
(i) Monthly Payments, (ii) Liquidation Proceeds, (iii) Insurance Proceeds or
(iv) proceeds from the repurchase of Loans (other than repurchases by
Subservicer hereunder) collected by the Subservicer.
SERVICING CUT-OFF DATE: With respect to a Loan, the last day of the
month preceding the month in which such Loan is first serviced hereunder.
SERVICING COMPENSATION: The Servicing Fee and any other amounts to
which Subservicer is entitled pursuant to SECTION 4.14.
SERVICING GUIDELINES: The guidelines established by Servicer for the
servicing of Loans hereunder, the same as may be amended in writing from time
to time by Servicer pursuant to SECTION 4.01(e).
SUPERIOR LIEN: With respect to a Loan, the mortgage loan(s) relating
to the corresponding Mortgage Property having a superior priority lien.
TITLE I MORTGAGE LOAN: Any fixed rate, fully amortizing, property
improvement loan partially insured by the FHA under the Title I Program (or
eligible for such insurance, if not yet acknowledged by FHA), which is
secured by a Mortgage.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 6
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SERVICER.
The following representations, warranties and covenants of Servicer to
Subservicer shall be ongoing and in effect throughout the term of this
Agreement:
(a) Servicer is duly organized, validly existing and in good
standing under the Laws governing its formation and existence, has all
licenses necessary to carry on its business as now being conducted, and is
licensed, qualified and in good standing in each state if the laws of such
state require licensing or qualification to conduct business of the type
conducted by the Servicer and perform its obligations as Servicer hereunder
(except where the failure to be so licensed or authorized and qualified does
not have a materially adverse effect upon its ability to conduct its
business); the Servicer has the power and authority to execute and deliver
this Agreement and to perform in accordance herewith; the execution, delivery
and performance of this Agreement by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action of the Servicer; this Agreement evidences the valid, binding
and enforceable obligation of the Servicer; and all requisite action has been
taken by the Servicer to make this Agreement valid, binding and enforceable
upon the Servicer in accordance with its terms, except as enforcement hereof
may be limited by applicable Debtor Relief Laws and general principles of
equity.
(b) The Servicer holds a valid FHA Title I contract of insurance,
is approved by the FHA to originate, purchase, service and sell loans insured
under the FHA Regulations and is not subject to any administrative action,
probation, suspension, withdrawal or termination of its FHA Title I contract
of insurance under the FHA Regulations.
(c) Any necessary approval of the transactions contemplated by
this Agreement from each federal or state regulatory authority having
jurisdiction over Servicer has been obtained; there are no actions or
proceedings pending or affecting Servicer which would adversely affect its
ability to perform hereunder.
(d) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of Servicer and will not
result in (i) the breach of any term or provision of the charter or bylaws of
Servicer, (ii) the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any obligation
under, any agreement, indenture or loan or credit agreement or other
instrument to which either the Servicer or its properties are subject or
(iii) the violation of any Law to which either the Servicer or its properties
are subject.
Section 2.02. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SUBSERVICER. The following representations, warranties and covenants of
Subservicer to Servicer shall be ongoing and in effect throughout the term of
this Agreement:
(a) Subservicer is duly organized, validly existing and in good
standing under the Laws governing its formation and existence, has all
licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state if the laws of such
state require licensing or qualification to conduct business of the type
conducted by the Subservicer and perform its obligations as Subservicer
hereunder (except where the failure to be so licensed or authorized and
qualified does not have a materially adverse effect upon its ability to
conduct its business); the Subservicer has the power and authority to execute
and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement by the Subservicer and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action of the
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 7
Subservicer; this Agreement evidences the valid, binding and enforceable
obligation of the Subservicer; and all requisite action has been taken by the
Subservicer to make this Agreement valid, binding and enforceable upon the
Subservicer in accordance with its terms, except as enforcement hereof may be
limited by applicable Debtor Relief Laws and general principles of equity.
(b) The Subservicer holds a valid FHA Title I contract of
insurance, is approved by the FHA to originate, purchase, service and sell
loans insured under the FHA Regulations and is not subject to any
administrative action, probation, suspension, withdrawal or termination of
its FHA Title I contract of insurance under the FHA Regulations.
(c) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or from any
federal, state or other governmental authority or agency (other than any such
actions, approvals, etc., under any state securities laws real estate
syndication or "Blue Sky" statutes, as to which the Subservicer makes no such
representation or warranty), that are necessary in connection with the
execution and deliver by the Subservicer of this Agreement and the other
related documents to which it is a party, have been duly taken, given or
obtained, as the case may be, are in full force and effect, are not subject
to any pending proceedings or appeals (administrative, judicial or otherwise)
and either the time within which any appeal therefrom may be taken or review
thereof may be obtained has expired or no review thereof may be obtained or
appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and such other documents on the
part of the Subservicer and the performance by the Subservicer of its
obligations as Subservicer under this Agreement and such other documents to
which it is a party.
(d) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Subservicer and will
not result in (i) the breach of any terms or provisions of the charter or
by-laws of the Subservicer, (ii) the breach of any term or provision of, or
conflict with or constitute a default under or result in the acceleration of
any obligation under, any agreement, indenture or loan or credit agreement or
other instrument to which either Subservicer or its properties are subject,
or (iii) the violation of any Law to which either the Subservicer or its
properties are subject.
(e) To the best of the Subservicer's knowledge, neither this
Agreement nor any statement, report or other document prepared by the
Subservicer and furnished pursuant to this Agreement contains any untrue
statement of material fact or omits to state a material fact necessary to
make the statements contained herein or therein not misleading.
(f) There is no action, suit, proceeding or investigation pending
or, to the best of the Subservicer's knowledge, threatened against the
Subservicer 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 Subservicer or in any material
impairment of the right or ability of the Subservicer to carry on its
business substantially as now conducted, or which would draw into question
the validity of this Agreement, or which would be likely to impair materially
the ability of the Subservicer to perform under the terms of this Agreement.
(g) The Subservicer 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 other governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Subservicer or its properties or
might have consequences that would materially and adversely affect its
performance hereunder.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 8
(h) The Subservicer shall comply with any net worth and capital
requirements under applicable Law and shall not be subject to any regulatory
action involving a cease and desist order with respect to its net worth or
capital requirements.
(i) The Subservicer shall not sell, transfer, assign or otherwise
dispose of a customer or similar list comprised of the names of the Obligors
under the Loans to any third party.
(j) From time to time Subservicer will report, as more fully set
forth in this Agreement, information relating to the Loans to Servicer,
Master Servicer and Owner, and will do every act and thing which may be
reasonably necessary or required to perform its duties under this Agreement.
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS RELATING TO
LOANS. With respect to each Loan, the following representations, warranties
and covenants of Subservicer to Servicer (except as noted below) shall be
deemed to have been made during the time that such Loan is serviced by
Subservicer subsequent to the Servicing Cut-Off Date pursuant to this
Agreement (commencing with the Servicing Cut-Off Date and not with respect to
any prior time period), and shall be ongoing and in effect with respect to
each Loan for so long as such Loan is being serviced pursuant to this
Agreement:
(a) Unless consented to in writing by Servicer and Master
Servicer or as permitted under SECTION 4.01(c) hereof, the terms, covenants
and conditions of the Loan will not be waived, altered, impaired or modified
by Subservicer in any respect which materially affects the value, validity or
enforceability of the Loan, prompt payment of the Loan or the security of the
lien securing the Loan.
(b) There have not been and will not be outstanding any advances
of funds by Subservicer, to or on behalf of the Obligor to be used by the
Obligor for the payment of any monthly principal and interest installment or
other charges payable under the Loan, except as contemplated by the
Subservicing Guidelines.
(c) Subservicer has not done any act or omitted to do any act,
and will not do or omit to do any act, which creates or would create an
offset, defense or counterclaim to the Loan, including the obligation of the
Obligor to pay the unpaid principal of and interest on the Loan.
(d) Unless Owner, Master Servicer or Servicer has otherwise
consented in writing or as contemplated under SECTIONS 4.02(a), 4.07 or 4.16,
to the best knowledge of Subservicer, the Obligor has not conveyed such
Obligor's right, title or interest to or in the Mortgage Property to any
Person.
(e) Any fees charged and retained by Subservicer in servicing the
Loan, including Servicing Fees, are in compliance with the Loan documents,
this Agreement and all Laws and in the case of a Title I Mortgage Loan, the
FHA Regulations.
(f) Subservicer has complied with federal disclosure laws, the
fair credit reporting act and other Laws which impose requirements,
restrictions or conditions on Subservicer in connection with the servicing of
Loans hereunder, and in the case of a Title I Mortgage Loan, with the
applicable provisions of the FHA Regulations, except those which are modified
by, waived by or otherwise inconsistent with the terms of this Agreement or
the Servicing Guidelines.
Section 2.04. BREACHES OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
Upon discovery by either Servicer or Subservicer of a breach of any of the
representations, warranties or covenants set forth in SECTIONS 2.02 OR 2.03,
the party discovering such breach shall give written notice to the other.
Within sixty (60) days of its discovery or its receipt of notice of such a
breach, Subservicer shall promptly cure such breach in all material respects
with respect to each Loan affected by such breach. If Subservicer fails to
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 9
cure such breach in all material respects after the expiration of such sixty
(60) day period or if Servicer determines in good faith that Subservicer
cannot cure such breach within the unexpired portion of such sixty (60) day
period, then, upon at least five (5) days prior written notice to Subservicer
of the date of repurchase as determined by Servicer, the Subservicer shall
repurchase each Loan serviced under this Agreement which, in the reasonable
judgment of Servicer, is materially adversely affected by such breach, at the
related Repurchase Price for such Loan.
SECTION 2.05. INDEMNIFICATION. IN ADDITION TO ANY CURE OR
REPURCHASE OBLIGATION PURSUANT TO SECTION 2.04, SUBSERVICER SHALL INDEMNIFY
SERVICER AND OWNER AND HOLD THEM HARMLESS AGAINST ANY LOSS, DAMAGES,
PENALTIES, FINES, FORFEITURES, REASONABLE LEGAL FEES AND RELATED COSTS,
JUDGMENTS AND OTHER COSTS AND EXPENSES RESULTING FROM ANY CLAIM, DEMAND,
DEFENSE OR ASSERTION BASED ON OR GROUNDED UPON, OR RESULTING FROM, A BREACH
OF THE REPRESENTATIONS, WARRANTIES AND COVENANTS SET FORTH IN SECTIONS 2.02
AND 2.03, EXCEPT TO THE EXTENT THAT SUCH BREACH WAS CAUSED BY THE NEGLIGENCE
OR WILLFUL MISCONDUCT OF SERVICER.
Section 2.06. TERMINATION OF SUBSERVICER. If Subservicer fails to
comply with the requirements of SECTION 2.04 OR 2.05, Servicer may terminate
all of Subservicer's rights pursuant to this Agreement as provided in SECTION
5.02 and shall have all other rights and remedies provided in this Agreement
or by Law.
ARTICLE III
ASSIGNMENT OF AGREEMENT
Section 3.01. ASSIGNMENT OF OWNER'S RIGHTS.
(a) Subservicer acknowledges and agrees that, from time to time,
Owner may assign, in writing, its right, title and interest with respect to
one or more whole Loans serviced by Subservicer pursuant to this Agreement,
and Subservicer hereby consents to each such assignment. Owner shall only
provide Subservicer with written notice of any such assignment if the
assignee is not affiliated with Owner; in such event, Subservicer shall take
such actions as may be reasonably requested by Owner or the applicable
assignee to protect the interests of such assignee. Upon request from
Subservicer, Servicer will identify the name of the Owner of any Loan
serviced by Subservicer.
(b) Without limiting the generality of paragraph (a) above, Owner
contemplates that Owner or an affiliate of Owner from time to time will make
assignments of its right, title and interest with respect to certain Loans
serviced by Subservicer pursuant to this Agreement, to trustees under various
pooling agreements and/or to investors pursuant to whole loan sale
transactions. Such pooling agreements will relate to pass-through
certificates or mortgage-backed securities representing ownership interests
in pools of mortgage loans which include one or more of the Loans ("MBS").
Notwithstanding any provision to the contrary herein, in connection with a
group of one or more Loans that either back an MBS, are retained by Owner or
are sold to another investor in a whole loan sale (each such group, the
"POOLED LOANS"), Servicer by written notice: (i) may require Subservicer to
establish a separate Collection Account for the Revenues associated with the
Pooled Loans and designate the caption for such Collection Account; (ii) may
require Subservicer to remit Revenues separately with respect to the Pooled
Loans; (iii) may require Subservicer to report separately with respect to the
Pooled Loans;(iv) may change the requirements for any Collection Account,
Eligible Account, Permitted Instrument, Remittance Date or Reporting Date;
and (v) may modify any other provision herein in a manner that is necessary
or appropriate as a result of the requirements of the MBS or sale involving
the Pooled Loans. Upon receipt of such written notice, Subservicer agrees to
comply with such requirements of the Servicer pursuant to this Section.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 10
Section 3.02. ASSIGNMENT OF SERVICER'S RIGHTS. Subservicer
acknowledges and agrees that, from time to time, Servicer may assign, in
writing, its right, title and interest in this Agreement with respect to one
or more whole Loans, and Subservicer hereby consents to each such assignment.
Servicer shall only provide Subservicer with written notice of any such
assignment if the assignee is not affiliated with Servicer; in such event,
Subservicer shall take such actions as may be reasonably requested by
Servicer or the applicable assignee to protect the interest of such assignee.
Section 3.03. DELEGATION OF OWNER'S RIGHTS AND DUTIES. Owner may
assign, from time to time to the extent permitted by Law, all or a portion of
the authority, rights and/or duties of Owner with respect to certain Loans
serviced by Subservicer pursuant to this Agreement to its duly appointed
agents, including consultants or other Persons retained by Owner. Upon
notice to Subservicer of the taking of any action pursuant to this SECTION
3.03, Subservicer shall treat any such assignee as if it were Owner in
accordance with the terms set forth in such assignment, until notice to
Subservicer of any modification or termination of such assignment.
Subservicer acknowledges and consents to such actions, waives any further
notice thereof and agrees to be bound thereby.
Section 3.04. ASSIGNMENT OF SUBSERVICING OBLIGATIONS. Except as
provided in SECTION 5.01(b), Subservicer may not assign any of its rights or
privileges hereunder or make or enter into any delegation, subcontract,
authorization or appointment with respect to any of its duties, liabilities
or obligations hereunder without the prior written consent of Servicer;
provided, however, that Subservicer shall not be required to obtain the
consent of Servicer and shall have the right to delegate its duties and
obligations to make inspections of any Mortgaged Property, to conduct face to
face interviews and to perform other miscellaneous and incidental duties in
servicing the Loans. Servicer's consent to an assignment as referred to in
the preceding sentence shall not be unreasonably withheld or delayed,
provided that the assignee meets Servicer's qualification requirements to
service Loans on behalf of Owner. Any agreement to assign servicing rights
and obligations shall provide that the assignee must assume the servicing
obligations so assigned. Without the prior written consent of Servicer, no
such assignment by Subservicer shall relieve Subservicer of liability arising
from events, actions or omissions by Subservicer prior to such assignment,
and Servicer shall retain all remedies provided by this Agreement or by Law
with respect thereto. Subservicer may not pledge or encumber its rights or
privileges hereunder without the prior written consent of Servicer.
ARTICLE IV
SERVICING DUTIES OF SERVICER
Section 4.01. SERVICING OF LOANS.
(a) SERVICING STANDARD. The Subservicer, as independent contract
servicer, shall service and administer the Loans and shall have full power
and authority, acting alone, to do any and all things in connection with such
servicing and administration which the Subservicer may deem necessary or
desirable and consistent with the terms of this Agreement and the Servicing
Guidelines. Notwithstanding any provision to the contrary herein, the
Subservicer, in servicing and administering the Loans, shall employ or cause
to be employed procedures (including collection, foreclosure, liquidation and
REO Property management procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering loans of the
same type as the Loans for its own account, all in accordance with the Law
and the accepted servicing practices of prudent lending institutions and
servicers of loans of the same type as the Loans and giving due consideration
to the Owner's reliance on the Subservicer. With respect to the Title I
Mortgage Loans, Subservicer shall comply with FHA Regulations in servicing
such Loans so that the FHA Insurance remains in full force and effect with
respect to such Loans, except for good faith disputes relating to FHA
Regulations or such FHA Insurance, unless such disputes would result in the
termination or suspension of such FHA Insurance. The Subservicer has and
shall maintain the facilities, procedures and experienced personnel necessary
to comply with the servicing standard set forth in this
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 11
subsection (a) and the duties of the Subservicer set forth in this Agreement
relating to the servicing of the Loans.
(b) EXPENSE ADVANCES. In accordance with the preceding general
servicing standard, the Subservicer shall make all reasonable and necessary
Expense Advances in connection with the servicing of each Loan hereunder.
Notwithstanding any provision to the contrary herein, Subservicer shall not
have any obligation to advance its own funds for any delinquent scheduled
payments of principal and interest on any Loan. No costs incurred by
Subservicer in respect of Expense Advances shall for the purposes of
distributions to the Owner be added to the amount owing under the related
Loan. Notwithstanding any obligation by Subservicer to make an Expense
Advance hereunder with respect to a Loan, before making any Expense Advance,
that is material in relation to the outstanding principal balance thereof,
the Subservicer shall assess the reasonable likelihood of (i) recovering such
Expense Advance and any prior Expense Advances for such Loan, and (ii)
recovering any amounts attributable to outstanding interest and principal
owing on such Loan for the benefit of the Owner in excess of the costs,
expenses and other deductions to obtain such recovery, including without
limitation any Expense Advances therefor and, if applicable, the outstanding
indebtedness of all Superior Liens. Subservicer shall only make an Expense
Advance with respect to a Loan to the extent that Subservicer determines in
its reasonable, good faith judgment that such Expense Advance would likely be
recovered pursuant to the preceding sentence; provided that if the aggregate
amount of Expense Advances exceed $500.00 for a Loan, such Expense Advance is
approved by Servicer.
(c) WAIVERS, MODIFICATIONS AND EXTENSIONS. The Subservicer shall
not waive, modify or vary any term of any Loan or consent to the postponement
of strict compliance with any such term or in any manner grant indulgence to
any Obligor, unless Subservicer obtains the prior written approval of the
Servicer or unless permitted under the Servicing Guidelines, but in any event
such waiver, modification or variance shall be subject to the terms of this
Agreement, including subsection (a) above and in the case of a Title I
Mortgage Loan, the FHA Regulations. Notwithstanding the preceding sentence,
the Subservicer shall not permit any modification with respect to any Loan
that would change the Loan Rate, defer or forgive the payment of any
principal or interest (unless in connection with the liquidation of the
related Loan) or extend the final maturity date on the Loan, unless the
Obligor is in default with respect to the Loan, or such default is, in the
judgment of the Subservicer, reasonably foreseeable and the Servicer
expressly approves such modification in writing.
The Subservicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of each Loan and the related Note
and Mortgage, if applicable. Consistent with the foregoing, the Subservicer
may in its discretion waive or permit to be waived any late payment charge or
assumption fee or any other fee or charge which the Subservicer would be
entitled to retain hereunder as Servicing Compensation.
(d) INSTRUMENTS OF SATISFACTION OR RELEASE. Without limiting the
generality of the foregoing, consistent with the servicing duties and
responsibilities hereunder and as required by the documents relating to such
Loan, the Subservicer is hereby authorized and empowered to execute and
deliver on behalf of the Servicer and Owner, all instruments of satisfaction
or cancellation, or of partial or full release, discharge and all other
comparable instruments, with respect to the Loans and with respect to the
Mortgage Properties. If reasonably required by the Subservicer, the Servicer
or Owner shall furnish the Subservicer with any powers of attorney and other
documents necessary or appropriate to enable the Subservicer to carry out its
servicing and administrative duties under this Agreement, including without
limitation the form of Special and Limited Power of Attorney attached as
EXHIBIT B hereto.
(e) SERVICING GUIDELINES. Subservicer agrees that Owner, Master
Servicer or Servicer may modify and supplement the Servicing Guidelines from
time to time, provided that such modifications and
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 12
supplement (i) are not imposed retroactively and (ii) are necessary or
appropriate as a result of the requirements or the current industry practices
relating to any Pooled Loans or are necessary or appropriate to update,
clarify or specify certain matters relating to servicing of the Loans or to
comply with the FHA Regulations or any Law. After Subservicer receives at
least thirty (30) days prior written notice of any such modification and
supplement, Subservicer agrees to comply with the Servicing Guidelines as
modified and supplemented.
Section 4.02 LIQUIDATION OF LOANS.
(a) In the event that any payment due under any Loan, and not
postponed pursuant to SECTION 4.01(c), is not paid when the same becomes due
and payable, or in the event the Obligor fails to perform any other covenant
or obligation under the Loan and such failure continues beyond any applicable
grace period, the Subservicer shall take such actions as are in conformity
with the servicing standard hereunder and in the case of a Title I Mortgage
Loan, the FHA Regulations. If any Loan becomes more than ninety (90) days
past due from any Monthly Payment due date under the Loan, then Subservicer
shall prepare and submit to Servicer an analysis of the expected recovery
from each available method of liquidating such Loan, including, if available,
any recovery from the submission of an FHA Claim and the liquidation of the
related Mortgaged Property through foreclosure or other means. The Servicer
shall then have the right to direct the Subservicer to perform, in accordance
with the standard of care specified in SECTION 4.01, any of the following
actions: (i) in the case of a Title I Mortgage Loan, prepare an FHA Claim for
submission by the Servicer or FHA Claims Administrator; (ii) foreclose upon
or otherwise comparably effect the ownership, in the name of and for the
benefit of the Owner, of the Mortgaged Property relating to such defaulted
Loan, and take other necessary steps to collect amounts not satisfied through
the acquisition of such Mortgaged Property through foreclosure or other
means; or (iii) take such other action as the Servicer shall deem to be in
the best interests of the Owner.
(b) After a Loan has become a Liquidated Loan, the Subservicer
shall at month end prepare and forward to the Servicer and any FHA Claims
Administrator a Liquidation Report, in the form prescribed by the Servicing
Guidelines, detailing the Liquidation Proceeds received from the Liquidated
Loan, expenses incurred with respect thereto, and any loss incurred in
connection therewith. Subservicer may record on its servicing records a
charge-off or write-off of the amount of such loss incurred from such
Liquidated Loan, subject to the prior approval of Servicer of such charge-off
amount. After the recordation of the charge-off amount for a Liquidated
Loan, the servicing obligations of Subservicer hereunder shall terminate with
respect to such Loan.
Section 4.03 ESTABLISHMENT OF COLLECTION ACCOUNTS; DEPOSITS IN
COLLECTION ACCOUNTS.
The Subservicer shall cause to be established and maintained one or
more Collection Accounts, which shall be Eligible Accounts, which may be
interest-bearing and which may be transferred from one institution to another
so long as such transfer is to an Eligible Account and prior written notice
is delivered to Servicer. The Subservicer shall use its best efforts to
deposit or cause to be deposited (without duplication) within one (1)
Business Day, and shall in any event deposit within two (2) Business Days, of
receipt thereof in the Collection Account and retain therein:
(i) all Revenues with respect to the Loans;
(ii) any amounts payable in connection with the
repurchase of any Loan;
(iii) any amount required to be deposited in the
Collection Account pursuant to SECTION 4.06 OR 4.07 that is not
otherwise included in the Revenues; and
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 13
(iv) interest and investment income on funds held in the
Collection Account.
The foregoing requirements for deposit in the Collection Account
shall be exclusive.
Section 4.04 PERMITTED WITHDRAWALS FROM THE COLLECTION ACCOUNT.
(a) The Subservicer shall withdraw or cause to be withdrawn funds
from the Collection Account for the following purposes:
(i) to effect the Remittance to the Servicer
on or before 1:00 p.m. Dallas, Texas time on the Remittance Date of
(A) all Revenues received by Subservicer during the preceding
calendar month, plus any amounts then on deposit in the Collection
Account that are attributable to the repurchase of any Loan
pursuant to SUBSECTION 4.03(ii), any amounts deposited pursuant to
SUBSECTION 4.03(iii) and any interest and investment income earned
during the preceding calendar month pursuant to SUBSECTION
4.03(iv), plus (B) any amount which would exceed the twelve (12)
month time limit in subsection (b) below, less (c) the amounts set
forth in clauses (ii) through (vi) below;
(ii) to pay itself any Servicing Fees and additional
Servicing Compensation earned hereunder;
(iii) to pay itself any unreimbursed Expense
Advances to the extent that the collections from the related Loan,
for which such Expense Advances were made, have been received by
Subservicer, including any collections from Insurance Proceeds,
Liquidation Proceeds and such other amounts received from the
related Obligor in repayment of such Expense Advances, but
excluding any Monthly Payments;
(iv) to withdraw any amount received from an
Obligor that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code in accordance with a final,
nonappealable order of a court having competent jurisdiction;
(v) to withdraw any funds deposited in the
Collection Account that were not required to be deposited therein
(such as Servicing Compensation) or were deposited therein in error
or that constituted Insurance Proceeds the FHA seeks to reclaim on
the grounds that a Loan that was the subject of an FHA Claim is
found not to conform to FHA Regulations; and
(vi) to clear and terminate the Collection
Account upon the termination of this Agreement with any
amounts on deposit therein being paid as directed by the
Servicer.
(b) All remittances of funds by Subservicer to Servicer pursuant
to this Agreement shall be made by wire transfer of immediately available
funds. The Subservicer shall not retain any cash or investment in the
Collection Account for a period in excess of twelve (12) months and cash
deposited therein shall be considered withdrawn pursuant to subsection (a)
above to the Servicer on a first-in, first-out basis.
(c) The funds held in the Collection Account may be invested (to
the extent practicable) in Permitted Instruments, as directed in writing to
the Subservicer by the Servicer. In any case, funds in the Collection
Account must be available for withdrawal without penalty, and any Permitted
Instruments must mature or otherwise be available for withdrawal not later
than one Business Day immediately preceding the Remittance Date next
following the date of such investment and shall not be sold or disposed of
prior
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 14
to its maturity. All Permitted Instruments in which funds in the Collection
Account are invested must be held by or registered in the name of Servicer or
such other name or names as designated by Servicer.
(d) The amount remitted to Servicer shall agree with the amount
in the Remittance Reconciliation Report submitted by Subservicer with respect
to such Remittance Date. Every effort will be made by Servicer and
Subservicer to resolve discrepancies prior to the subsequent Remittance Date;
however, in such cases where this is not possible, Servicer and Subservicer
will diligently continue to work to identify any remaining discrepancies. In
the case of a Subservicer error, Subservicer shall submit an amended
Remittance Reconciliation Report that accurately reflects the amounts which
should have been remitted on the related Remittance Date, and remit any
discrepancy in cash to Servicer in accordance with Servicer's request as soon
as possible following identification of such discrepancy. In the case of a
Servicer error, Servicer will correct the error on or before the Remittance
Date in the month following the month in which such discrepancy is identified.
Section 4.05 [Reserved]
Section 4.06 FIDELITY BOND; ERRORS AND OMISSION INSURANCE.
The Subservicer shall maintain with a responsible company, and at its
own expense, a blanket fidelity bond and an errors and omissions insurance
policy in such amounts as required by, and satisfying any other requirements
of, FHA and FHLMC, with broad coverage on all officers, employees or other
persons acting in any capacity requiring such persons to handle funds, money,
documents or papers relating to the Loans ("SUBSERVICER EMPLOYEES"). Any
such fidelity bond and errors and omissions insurance shall protect and
insure the Subservicer against losses, including losses resulting from
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts
(including acts relating to the origination and servicing of loans of the
same type as the Loans) of such Subservicer Employees. Such fidelity bond
shall also protect and insure the Subservicer against losses in connection
with the release or satisfaction of a Loan without having obtained payment in
full of the indebtedness secured thereby. In the event of any loss of
principal or interest on a Loan for which reimbursement is received from
Subservicer's fidelity bond or errors and omissions insurance, the proceeds
from any such insurance will be deposited in the Collection Account. No
provision of this SECTION 4.06 requiring such fidelity bond and errors and
omissions insurance shall diminish or relieve the Subservicer from its duties
and obligations as set forth in this Agreement. Upon the request of the
Servicer, the Subservicer shall cause to be delivered to the Servicer a
certified true copy of such fidelity bond and insurance policy. Within thirty
(30 days of the date hereof, Subservicer shall notify Servicer of the
insurance company that has provided such fidelity bond and errors and
omissions insurance.
Section 4.07 TITLE, MANAGEMENT AND DISPOSITION OF REO
PROPERTY.
Subservicer shall not institute a foreclosure action with respect to
a defaulted Loan without the written direction of Servicer pursuant to
SECTION 4.02. Upon the direction of Servicer to institute a foreclosure
action, such foreclosure shall be conducted by Subservicer in accordance with
Subservicer's customary and prudent internal procedures (as modified by
Servicer under the Servicing Guidelines or upon thirty (30) days advance
written notice) and the requirements of this Agreement, any Law and all
requirements of any insurer providing insurance on such Loan. In the event
that title to any Mortgaged Property is acquired in foreclosure or by deed in
lieu of foreclosure (an "REO PROPERTY"), the deed or certificate of sale
shall be taken in the name of the Owner.
The Subservicer shall manage, conserve, protect and operate each REO
Property for the Owner solely for the purpose of its prudent and prompt
disposition and sale. The Subservicer shall, either itself or through an
agent selected by the Subservicer, manage, conserve, protect and operate the
REO Property
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 15
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. Subject to
Servicer's written approval, the Subservicer shall attempt to sell or dispose
of such REO Property (and may temporarily rent the same) on such terms and
conditions as the Subservicer deems to be in the best interest of the Owner.
Any out-of-pocket expenses incurred by the Subservicer pursuant to this
SECTION 4.07 shall be considered Expense Advances. The Subservicer shall
cause to be deposited in the Collection Account, all revenues received with
respect to the conservation and disposition of the related REO Property, as
Liquidation Proceeds, and shall retain, or withdraw therefrom, less the
amounts retained and withdrawn by the Subservicer for any related
unreimbursed Expense Advances and any other funds necessary for the proper
operation, management and maintenance of the related REO Property and the
fees of any managing agent acting on behalf of the Subservicer.
Section 4.08 ACCESS TO CERTAIN DOCUMENTATION AND
INFORMATION REGARDING THE LOANS.
The Subservicer shall provide to the Owner, the Servicer, the Master
Servicer and the supervisory agents and examiners of each of the foregoing
access to the documentation regarding the servicing of the Loans, such access
being afforded without charge but only upon reasonable request and during
normal business hours at the offices of the Subservicer designated by it.
Section 4.09 SUPERIOR LIENS.
(a) The Subservicer shall file (or cause to be filed) of record a
request for notice of any action by a superior lienholder under a Superior
Lien for the protection of the Owner's interest, where permitted by local law
and whenever applicable state law does not require that a junior lienholder
be named as a party defendant in foreclosure proceedings in order to
foreclose such junior lienholder's equity of redemption.
(b) If the Subservicer is notified that any superior lienholder
has accelerated or intends to accelerate the obligations secured by a
Superior Lien, or has declared or intends to declare a default under the
mortgage or the promissory note secured thereby, or has filed or intends to
file an election to have any Mortgage Property sold or foreclosed, the
Subservicer shall take, on behalf of the Owner, all reasonable actions that
are necessary to protect the interests of the Owner, and/or to preserve the
security of the related Loan, including making any Expense Advances that are
necessary to cure the default or reinstate the Superior Lien. The
Subservicer shall immediately notify the Servicer and Master Servicer of any
such action or circumstances. Any Expense Advances by the Subservicer
pursuant to this SECTION 4.09 shall comply with the requirements of SECTION
4.01(b) hereof.
Section 4.10 FHA INSURANCE MATTERS.
(a) The Owner may, at its option, enter into an FHA Claims
Administration Agreement whereby an FHA Claims Administrator may act as agent
and attorney-in-fact for the Owner to submit any FHA Claim to the FHA, in
which case the Subservicer shall cooperate with and assist the FHA Claims
Administrator and furnish to the FHA Claims Administrator any and all
documents, if any, necessary to file an FHA Claim. Notwithstanding the above,
the Subservicer shall act as Servicer's agent in preparing all HUD claim
files, analyses, submission reports and submission forms. The Subservicer
shall not be responsible for the payment of any fees of any FHA Claims
Administrator.
(b) The Owner and any FHA Claims Administrator shall comply with
FHA Regulations and take all other actions so that the FHA Insurance remains
in full force and effect with respect to the Title I Mortgage Loans, except
for good faith disputes relating to the FHA Regulations or such FHA
Insurance, unless such disputes would result in the termination or suspension
of such FHA Insurance.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 16
Section 4.11. REPORTS. On or before the Reporting Date
with respect to a Remittance Date of each month (or such other date as is
specified in the Servicing Guidelines), Subservicer shall submit to Servicer
a Monthly Accounting Package and a Monthly Servicing Package with respect to
the monthly period ending on the last day of such calendar month. In
addition, Subservicer shall submit to Servicer the other reports required by
the Servicing Guidelines at the time specified in the Servicing Guidelines.
In addition, in connection with any funds remitted on a date other than a
Remittance Date, Subservicer shall furnish a report in connection with such
remittance specifying the Loan or Loans to which such funds relate and a
description of such funds on a loan-by-loan basis (i.e., whether such funds
constitute principal, interest, principal prepayments, Insurance Proceeds,
Liquidation Proceeds, etc.). As required by Law, Subservicer shall report
information related to the Loans as necessary to the Obligors and the
Internal Revenue Service. Subservicer shall also provide to Servicer, Master
Servicer and Owner such other reports or information regarding the Loans as
may be reasonably requested by them.
Section 4.12. QUARTERLY COMPLIANCE STATEMENTS; ANNUAL
INDEPENDENT ACCOUNTANTS' REPORT.
(a) Not later than the last day of the second month following the
end of each quarter of Subservicer's fiscal year beginning with the fiscal
quarter ending after the date hereof, Subservicer will deliver to Servicer
and Owner, an Officer's certificate stating that (i) Subservicer has fully
complied with the provisions of Articles IV, (ii) a review of the activities
of Subservicer during the preceding quarter and of performance under this
Agreement has been made under such Officer's supervision, and (iii) to the
best of such Officer's knowledge, based on such review, Subservicer has
fulfilled all its obligations under this Agreement throughout such quarter,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such Officer and the nature and status
thereof and the action being taken by Subservicer to cure such default.
(b) On or before 120 days after the end of each of Subservicer's
fiscal years elapsing during the term of its appointment under this
Agreement, beginning with the first fiscal year ending after the date hereof,
Subservicer, at its expense, shall furnish to Servicer and Owner (i) an
opinion by a firm of independent certified public accountants on the
financial position of Subservicer at the end of the relevant fiscal year and
the results of operations and changes in financial position of Subservicer
for such year then ended on the basis of an examination conducted in
accordance with generally accepted auditing standards, and (ii) if
Subservicer is then servicing any Loans, a statement from such independent
certified public accountants to the effect that based on an examination of
certain specified documents and records relating to the servicing of
Subservicer's mortgage loan portfolio conducted substantially in compliance
with the audit program for mortgages serviced for the United States
Department of Housing and Urban Development Mortgage Audit Standards, or the
Uniform Single Audit Program for Mortgage Bankers (the "APPLICABLE ACCOUNTING
STANDARDS"), such firm is of the opinion that such servicing has been
conducted in compliance with the Applicable Accounting Standards except for
(a) such exceptions as such firm shall believe to be immaterial and (b) such
other exceptions as shall be set forth in such statement.
Section 4.13. LIABILITY OF SUBSERVICER FOR EXPENSES. Servicer shall
be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for herein. Subservicer agrees to
pay, without reimbursement therefor, (i) all reasonable costs or expenses
incurred by Owner, Master Servicer or Servicer resulting from failure by
Subservicer to timely file claims for losses relating to Loans (including the
failure to timely file claims under the insurance policies or bonds referred
to in SECTION 4.06), (ii) all reasonable costs and expenses resulting from
failure by Subservicer to foreclose Mortgages relating to delinquent Loans in
a manner consistent with this Agreement and the Servicing Guidelines, (iii)
all reasonable costs and expenses incurred by Servicer, Master Servicer or
Owner in investigating Subservicer's activities hereunder, if such
investigation proves that Subservicer has not complied in any
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 17
material respect with this Agreement or the Servicing Guidelines, and (iv)
all reasonable costs and expenses incurred by Servicer, Master Servicer or
Owner in connection with replacing Subservicer in the event the Subservicer
resigns pursuant to SECTION 5.01 or this Agreement is terminated with cause
pursuant to SECTION 5.02 hereof,.
Section 4.14. SERVICING FEE. As compensation for its servicing
activities hereunder, Subservicer shall retain the Servicing Fee earned by it
hereunder. Additional servicing compensation shall include only (i) any late
payment and non-sufficient fund charges and any other similar charges
received and owing under the Note, and (ii) assumption fees received by
Subservicer pursuant to SECTION 4.16.
Section 4.15. NO SOLICITATION. Subservicer shall not solicit any
refinancing of any of the Loans, except if Subservicer obtains the prior
written consent to solicit a Obligor from Owner, then Subservicer may solicit
such Obligor for refinancing of such Loan; provided, that this covenant shall
not prevent Subservicer from making general solicitations, by mail,
advertisement or otherwise, of the general public or persons on a targeted
list, so long as the list was not generated from lists of Obligors whose
Loans were sold hereunder. An Obligor's unsolicited request to refinance
shall not be deemed to be a solicitation on the part of Subservicer.
Section 4.16. ASSUMPTION AGREEMENTS. When a Mortgage Property has
been or is about to be conveyed by the Obligor, Subservicer shall, to the
extent it has knowledge of such conveyance or prospective conveyance,
exercise its rights to accelerate the maturity of the related Loan under any
"due-on-sale" clause contained in the related Mortgage or Note; provided,
however, that the Subservicer shall not exercise any such right if the
"due-on-sale" clause, in the reasonable belief of the Subservicer, is not
enforceable under applicable law. In such event, the Subservicer shall enter
into an assumption and modification agreement with the person to whom such
property has been or is about to be conveyed, pursuant to which such person
becomes liable under the Note and, unless prohibited by applicable law or the
Mortgage documents, the Obligor remains liable thereon. Subject to Section
4.01(a), Subservicer is also authorized to enter into a substitution of
liability agreement with such person, pursuant to which the original Obligor
is released from liability and such person is substituted as Obligor and
becomes liable under the Note. The Subservicer shall notify Servicer that
any such substitution or assumption agreement has been completed by
forwarding to Servicer the original of such substitution or assumption
agreement. In connection with any assumption or substitution agreement
entered into pursuant to this Section, Subservicer shall not change the Loan
Interest Rate or the Monthly Payment, defer or forgive the payment of
principal or interest, reduce the outstanding principal amount or extend the
final maturity date on such Loan. Any fee collected by Subservicer for
consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to Subservicer as
additional Servicing Compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, Subservicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption
of a Loan by operation of law or any assumption which Subservicer may be
restricted by law from preventing, for any reason whatsoever.
Section 4.17 SATISFACTION OF MORTGAGES AND RELEASE OF LOAN FILES.
Subject to the provisions of SECTIONS 4.01, 4.02 AND 4.07, as
applicable, Subservicer shall not grant a satisfaction or release of a
Mortgage without having obtained payment in full of the indebtedness secured
by the Mortgage or otherwise prejudice any right Owner may have under the
mortgage instruments. Subservicer shall maintain the fidelity bond and errors
and omissions insurance as provided for in SECTION 4.06 insuring Subservicer
against any loss it may sustain with respect to any Loan not satisfied in
accordance with the procedures set forth herein.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 18
Upon the payment in full of any Title I Mortgage Loan, or the receipt
by Subservicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, Subservicer will immediately notify (and
forward a copy of such notice to any FHA Claims Administrator) Servicer and
Owner by an Officer's Certificate (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
Collection Account pursuant to SECTION 4.03 have been or will be so
deposited) and shall request delivery to it of the Owner's Loan File. Upon
receipt of such certification and request, the Owner shall promptly release
the related Owner's Loan File to the Subservicer. Expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall
be payable only from and to the extent of Servicing Compensation and shall
not be chargeable to the Collection Account.
The Owner shall execute and deliver to the Subservicer any court
pleadings, requests for trustee's sale or other documents necessary to the
foreclosure or trustee's sale in respect of a Mortgage Property or to any
legal action brought to obtain judgment against any Obligor on the Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies
or rights provided by the Note or Mortgage or otherwise available at law or
in equity. Together with such documents or pleadings, Subservicer shall
deliver to Owner an Officer's certificate requesting that such pleadings or
documents be executed by Owner and certifying as to the reason such documents
or pleadings are required and that the execution and delivery thereof by
Owner 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. Owner shall, upon receipt of a written request from an
Officer of Subservicer, execute any document provided to Owner by the
Subservicer or take any other action requested in such request that is, in
the opinion of Subservicer as evidenced by such request, required by any
state or other jurisdiction to discharge the lien of a Mortgage upon the
satisfaction thereof and Owner will sign and post, but will not guarantee
receipt of, any such documents to Subservicer, or such other party as
Subservicer may direct, within five Business Days, or more promptly if
needed, of Owner's receipt of such certificate or documents. Such
certificate or documents shall establish to Owner's satisfaction that the
related Loan has been paid in full by or on behalf of the Obligor and that
such payment has been deposited in the Collection Account.
ARTICLE V
TERMINATION AND LIABILITIES
Section 5.01. SUBSERVICER RESIGNATION OR MERGER.
(a) Upon sixty (60) days prior written notice, Subservicer may
resign from the obligations and duties hereby imposed on it under this
Agreement; provided that Subservicer shall reimburse Servicer for all costs
and expenses incurred by Servicer in connection with such resignation and the
transfer of the servicing of the Loans.
(b) Subservicer agrees that so long as it shall continue to serve
in the capacity contemplated under the terms of this Agreement, Subservicer
(i) will not dissolve or otherwise dispose of all or substantially all of its
assets, and (ii) will not voluntarily consolidate with or merge into any
other entity or permit one or more other entities to consolidate with or
merge into it; provided, however, that Subservicer may dispose of its assets,
consolidate with or merge into any other entity or permit one or more other
entities to consolidate with or merge into it if (A) the Subservicer obtains
the prior written consent of Servicer for such disposition, consolidation or
merger, (B) the transferee or surviving entity expressly assumes, in a form
approved by Servicer, all obligations of Subservicer under this Agreement
(including any accrued liabilities thereunder), and (C) such transferee or
surviving entity would not then be in default under any material provision of
this Agreement. In the event that Subservicer breaches or violates the
preceding sentence of this subsection (b), then Servicer shall have the right
to immediately
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 19
terminate with cause all of Subservicer's rights pursuant to this Agreement
with respect to all Loans in accordance with SECTION 5.02 below.
Section 5.02. TERMINATION WITH CAUSE. Servicer may terminate all of
Subservicer's rights pursuant to this Agreement with respect to all Loans
upon the happening of any one or more of the following events:
(a) Failure of Subservicer to (1) deposit in the Collection
Account in accordance with SECTION 4.03 hereof any payments in respect of the
Loans received by Subservicer no later than the fourth Business Day following
the day on which such payments were received or (2) remit to Servicer any
amount as required under SUBSECTION 4.04(a)(i) hereof, which failure is not
remedied on the first Business Day following the date upon which written
notice of such failure shall have been given to Subservicer (each, a "DEFAULT
NOTICE");
(b) Four (4) Default Notices (each in respect of a separate
failure to remit) have been properly given in any consecutive twelve (12)
month period or ten (10) Default Notices (each in respect of a separate
failure to remit) have been properly given at any time during the term of
this Agreement;
(c) Failure of Subservicer to repurchase any Loan as required
pursuant to SECTION 2.04 immediately upon receipt by Subservicer of written
notice of such failure, requiring the same to be remedied;
(d) Failure of Subservicer to duly observe or perform in any
material respect any other covenant, condition or agreement in this Agreement
to be observed or performed by Subservicer, other than as referred to in
paragraph (a) above, for a period of thirty (30) days after receipt of
written notice to Subservicer from Owner, Master Servicer or Servicer
specifying such failure and requesting that it be remedied; provided,
however, if the failure stated in such notice cannot be corrected within such
period and if corrective action is instituted by Subservicer within such
period and is diligently pursued until fully corrected, then this Agreement
shall not be terminated as a result of such failure; provided further, that
if Subservicer cannot correct such failure within thirty (30) days after the
end of the initial thirty (30) day period, Servicer may forthwith terminate
Subservicer pursuant to this SECTION 5.02;
(e) Issuance or entry of a decree or order of a court, agency or
supervisory authority having jurisdiction in the premises appointing a
conservator, receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceeding affecting Subservicer or substantially all of its properties, or
for the winding-up or liquidation of its affairs, if such decree or order
shall have remained in force undischarged or unstayed for a period of sixty
(60) days;
(f) Consent by Subservicer to the appointment of a conservator,
receiver or liquidator in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding affecting
Subservicer or substantially all of its properties;
(g) Admission in writing by Subservicer of its inability to pay
debts generally as they mature, or the filing of a petition to take advantage
of any applicable bankruptcy or insolvency statute or the making of an
assignment for the benefit of creditors.
(h) There shall be a material adverse change in the financial
condition, business or operations of the Subservicer that would materially
impair the ability of the Subservicer to perform its obligations hereunder,
including without limitation any failure by Subservicer to comply with any
net worth or capital requirements under applicable Law or any regulatory
action involving a cease and desist order with respect to the net worth or
capital requirements of Subservicer is issued to Subservicer.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 20
(i) The breach or violation by Subservicer of SECTION 5.01(b).
If any of the events specified in (e), (f), (g), (h) or (i) above shall
occur, Subservicer shall give written notice of such occurrence to Owner,
Master Servicer and Servicer within two (2) Business Days of the happening of
such event. Notwithstanding any provision in this Agreement to the contrary,
neither Owner nor Master Servicer nor Servicer shall be liable in any respect
for the termination of Subservicer pursuant to this SECTION 5.02 or owe any
duty or compensation to Subservicer if Subservicer is terminated pursuant to
this SECTION 5.02.
Section 5.03. TERMINATION WITHOUT CAUSE. With respect to all or any
portion of the Loans hereunder, Servicer, in its sole discretion, may
terminate this Agreement without cause upon written notice to Subservicer
which specifies the Loans for which the servicing hereunder is being
terminated pursuant to this Section. Upon such termination, unless an event
listed in SECTION 5.02 shall have occurred and be continuing, Servicer will
pay to Subservicer, as compensation for termination of Subservicer's rights
hereunder, an aggregate amount calculated with respect to each of the Loans
for which this Agreement is terminated without cause that is equal to (i) if
such terminations occurs within two years of the date the Loan was
originated, 1.0% of the outstanding principal balance of such Loan, (ii) if
such termination occurs after two years but within four years of the date the
Loan was originated, 0.5% of the outstanding principal balance of such Loan,
and (iii) if such termination occurs after four years of the date the Loan
was originated, 0.0% of the outstanding principal balance of such Loan. On
or before sixty (60) days after Subservicer has received written notice of
termination pursuant to this Section with respect to all or any portion of
the Loans, Subservicer shall transfer the servicing in accordance with
SECTION 5.04 hereof for such Loans, and Servicer shall remit to Subservicer
the compensation provided in the preceding sentence.
Section 5.04. TRANSFER OF TERMINATED SUBSERVICER'S SERVICING. Upon
termination of this Agreement with respect to Subservicer pursuant to either
SECTION 5.02 OR 5.03, Subservicer shall cooperate fully with Owner, Master
Servicer and Servicer in effecting the termination of Subservicer's
responsibilities and rights hereunder and Subservicer shall, in accordance
with the Servicing Guidelines and applicable Law, immediately deliver or
cause to be delivered to a servicer designated by Servicer (hereafter,
"DESIGNEE SERVICER") all moneys held in each applicable Collection Account
with respect to the Loans for which this Agreement has been terminated,
together with an assignment of this Agreement from Subservicer to Designee
Servicer, and immediately shall deliver as directed by Servicer all other
Revenues and amounts from such Loans at any time received by Subservicer not
theretofore remitted in accordance with this Agreement. In addition, within
thirty (30) days of any such termination, Subservicer shall deliver or cause
to be delivered to Designee Servicer all files, other than proprietary
computer software (however, printouts of payment histories shall be delivered
to Designee Servicer), of Subservicer relating to such Loans for which the
servicing hereunder has been terminated. Subservicer agrees to indemnify and
hold Servicer, Designee Servicer and Master Servicer harmless from any and
all loss, damage and expenses (including reasonable attorneys' fees) that any
of them may incur in securing the delivery of all files, the transfer of all
funds, and the remittance of all Revenues and amounts received by Subservicer
with respect to any Loan for which the servicing is being transferred
pursuant to this Section.
Section 5.05. SUBSERVICER'S DUTIES UPON TERMINATION WITH CAUSE.
Upon receipt by Subservicer of written notice of termination from Servicer
pursuant to SECTION 5.02, all authority and power of Subservicer under this
Agreement shall pass to and be vested in Servicer pursuant to and under this
SECTION 5.05; and, without limiting the foregoing, Servicer is hereby
authorized and empowered to execute and deliver, on behalf of Subservicer, 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.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 21
Section 5.06. ACCESS TO SUBSERVICER'S RECORDS AND AGREEMENT TO PAY
ATTORNEYS' FEES. Owner, Master Servicer, Servicer and their respective agents
may, from time to time, request Subservicer to allow the inspection of any of
Subservicer's books and records pertaining to this Agreement, and Subservicer
shall allow such inspections and access to such books and records at
reasonable times during Subservicer's normal business hours and upon
reasonable terms. If it is determined by Master Servicer, Servicer or Owner
that Subservicer has breached or failed to perform under any provision of
this Agreement, and Owner, Master Servicer or Servicer shall employ attorneys
or incur other expenses for the enforcement, performance, or observance of
the terms of the Agreement on the part of Subservicer, then Owner, Master
Servicer or Servicer, as the case may be, to the extent permitted by Law,
shall be reimbursed by Subservicer, on demand, for reasonable attorneys' fees
and other out-of-pocket expenses; in the event any such actions cause
Subservicer to incur expenses in defense of its performance hereunder and it
is determined that Subservicer has not breached or failed to perform under
any provision of this Agreement, then Subservicer, to the extent permitted by
Law, shall be reimbursed by Servicer, on demand, for reasonable attorneys'
fees and other out-of-pocket expenses related to such defense.
Section 5.07. NO REMEDY EXCLUSIVE. No remedy herein conferred upon
or reserved to Servicer is intended to be exclusive of any other available
remedy, but each remedy shall be cumulative and shall be in addition to other
remedies of Servicer given under this Agreement or existing at Law or in
equity. No delay or omission to exercise any right or power of Servicer
accruing under this Agreement shall impair any such right or power, or shall
be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.
ARTICLE VI
GENERAL PROVISIONS
Section 6.01. AMENDMENTS, CHANGES AND MODIFICATIONS. This Agreement
may be amended, changed, modified, or altered only by an instrument in
writing executed by Servicer and Subservicer. Notwithstanding the foregoing,
Subservicer agrees to comply with the Servicing Guidelines, the same as may
be modified from time to time by Owner, Master Servicer or Servicer pursuant
to SECTION 4.01(d) hereof.
Section 6.02. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS. NOTWITHSTANDING THE PRECEDING SENTENCE, IT IS UNDERSTOOD AND
AGREED THAT SUBSERVICER WILL SERVICE EACH LOAN IN ACCORDANCE WITH THE LAW.
Section 6.03. NOTICES. All notices, certificates or other
communications hereunder shall be in writing and be deemed given when
delivered (which delivery may be made by electronic facsimile transmission)
to the appropriate party at the address identified on the execution page
hereof or in the Servicing Guidelines. Notices to the Master Servicer shall
be delivered to the address specified in the Servicing Guidelines. Each
party may, by notice given hereunder, designate any further or different
address to which subsequent notices, certificates and other communications to
such party shall be sent.
Section 6.04. SEVERABILITY. In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate nor render unenforceable any
other provision hereof. Such invalid or unenforceable provision shall be
amended, if possible, in accordance with SECTION 6.01 in order to accomplish
the purposes of this Agreement.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 22
Section 6.05. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. To the
extent permitted by Law, Servicer and Subservicer agree that each will, from
time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further
instruments as may reasonably be required or appropriate to further express
the intention or to facilitate the performance, of this Agreement.
Section 6.06. TERM OF AGREEMENT. With respect to each Loan, the
term of this Agreement shall end upon the earliest to occur of (i)
termination of all of Subservicer's rights pursuant to this Agreement with
respect to such Loan as provided in SECTION 5.02 or SECTION 5.03 or (ii)
remittance of the final payment of such Loan to Servicer.
Section 6.07. SURVIVAL OF OBLIGATIONS AND COVENANTS. After
termination of this Agreement and transfer of the servicing rights to the
Loans to Designee Servicer, Subservicer shall continue to be liable for any
failure to fulfill its obligations during the time that it acted as
Subservicer of the Loans hereunder, and Subservicer shall not be released
from its obligations pursuant to SECTION 2.04.
Section 6.08. FORMS AND REPORTS. All forms or reports required by
this Agreement will be prescribed by Owner, Master Servicer or Servicer from
time to time and may be amended, supplemented, or replaced as Owner, Master
Servicer or Servicer shall deem appropriate.
Section 6.09. INDEMNIFICATION. SUBSERVICER AGREES TO, AND DOES
HEREBY, INDEMNIFY AND HOLD HARMLESS SERVICER AND OWNER AND THEIR SUCCESSORS
AND ASSIGNS AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSS, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES AND
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON,
INCURRED BY OR ASSERTED AGAINST ANY OF SUCH INDEMNIFIED PARTIES, IN ANY WAY
RELATED TO, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, TO THE EXTENT THAT ANY OF THE SAME RESULTS FROM OR
ARISES OUT OF ANY BREACH OF ANY REPRESENTATION OR WARRANTY MADE BY
SUBSERVICER IN THIS AGREEMENT OR FROM ANY BREACH BY SUBSERVICER OF ANY
COVENANT OR OBLIGATION OF SUBSERVICER UNDER THIS AGREEMENT, EXCEPT TO THE
EXTENT THAT SUCH BREACH WAS CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
SERVICER. THE INDEMNITIES CONTAINED IN THIS SECTION 6.09 SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
Section 6.10. BOARD RESOLUTIONS. With this Agreement, Subservicer
shall provide a resolution from its Board of Directors authorizing the
individual signing this Agreement to execute and deliver, on behalf of
Subservicer, this Agreement and authorizing the individuals specified therein
to take actions and deliver documents in the name of and on behalf of
Subservicer in connection with its performance of its obligations under this
Agreement.
Section 6.11. TERMINATION OF PRIOR AGREEMENTS. This Agreement
terminates any prior agreement between Servicer and Subservicer with respect
to the servicing of mortgage loans. Each mortgage loan serviced by
Subservicer under any such agreement shall be a Loan subject to this
Agreement.
Section 6.12. CONSENT TO JURISDICTION AND ARBITRATION.
(a) The parties hereto irrevocably agree to submit to the
personal jurisdiction of the United States District Court for the Northern
District of Texas and that the exclusive venue for all actions and
proceedings, except a proceeding for enforcement of a judgment, shall be in
the United States District Court for the Northern District of Texas, the
parties irrevocably waiving any objection thereto. If for any reason federal
jurisdiction is not available, the parties irrevocably agree to submit to the
personal jurisdiction of the Courts of the State of Texas and that the
exclusive venue for all actions and proceedings,
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 23
except a proceeding for enforcement of a judgment, shall be in the Courts of
the State of Texas, Dallas County, the parties irrevocably waiving any
objection thereto.
(b) Notwithstanding the foregoing subsection (a), at Servicer's
option exercisable at any time not later than sixty (60) days after an action
or proceeding has been commenced hereunder, the parties agree that the matter
may be submitted to binding arbitration in accordance with the rules of the
American Arbitration Association then in effect in the State of Texas, and
any judgment upon any award rendered by the arbitrator may be entered in any
court having jurisdiction thereof within the City of Dallas, Dallas County
and the State of Texas; provided, however, that the arbitrator shall not
amend, supplement, or reform in any regard this Agreement, the rights or
obligations of any party hereunder, or the enforceability of any of the terms
hereof. Any arbitration shall be conducted in the City of Dallas, Texas, or
Dallas County, Texas, before a single arbitrator who shall be reasonably
familiar with residential mortgage loan servicing and the mortgage banking
industry. IN THE EVENT ARBITRATION IS ELECTED, SUBSERVICER EXPRESSLY WAIVES
ANY AND ALL RIGHTS IT MAY HAVE TO INJUNCTIVE RELIEF UNDER TEXAS LAW IN
CONNECTION WITH A MANDATORY ARBITRABLE CONTROVERSY.
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 24
IN WITNESS WHEREOF, Servicer, Subservicer and Owner have caused this
Agreement to be executed as of this ___ day of __________, 1995.
SERVICER AND OWNER:
REMODELERS NATIONAL FUNDING CORP.
By:________________________
Name:______________________
Title:_____________________
STATE OF INCORPORATION: Texas
NOTICE ADDRESS: 00000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxx
Title: Vice President
Fax: (000) 000-0000
SUBSERVICER:
[NAME OF SUBSERVICER]
By:________________________
Name:______________________
Title:_____________________
STATE OF ORGANIZATION: ______________________
NOTICE ADDRESS: ______________________
______________________
______________________
Attn:_________________
Fax:__________________
Phone:________________
MORTGAGE LOAN SUBSERVICING AGREEMENT - Page 25
EXHIBIT B
SPECIAL AND LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
In connection with the servicing of certain property improvement
loans (as defined in the Subservicing Agreement, each a "Loan", or
collectively, the "Loans") under the Mortgage Loan Subservicing Agreement
dated as of ____________, 1995 (the "Subservicing Agreement") between
[NAME OF SUBSERVICER]("Subservicer"), as Subservicer and REMODELERS NATIONAL
FUNDING CORP., as Servicer, the undersigned, [NAME OF OFFICER], as the
______________________ of and on behalf of Remodelers National Funding Corp.
as Servicer under the Subservicing Agreement (hereinafter referred to as
"Principal"), does hereby constitute and appoint the Servicing Officers of
Subservicer as designated in the Subservicing Agreement (hereinafter referred
to collectively as "Attorneys" and individually as an "Attorney"), and each
of them individually, a true and lawful attorney for Principal (but only for
the purpose set forth herein) and pursuant to Section 4.01 of the
Subservicing Agreement hereby authorizes and empowers each such Attorney, for
and in the name and stead of Principal to endorse, execute or deliver any and
all documents or instruments of satisfaction or cancellation, or of partial
or full release or discharge, or of subordination, and all other comparable
instruments, with respect to the Loans and any related Mortgage Properties,
all in accordance with the terms of the Subservicing Agreement, including,
without limitation, the recording or filing with the appropriate public
officials of such documents or instruments and the endorsement and deposit of
any instrument in connection with the foreclosure of any Loan or the
bankruptcy or receivership of the Borrower of any Loan. Capitalized terms
used and not otherwise defined herein have the meanings ascribed to such
terms in the Subservicing Agreement.
Principal covenants and agrees that it shall, from time to time after
the date hereof, at the request of Subservicer, as Subservicer, execute
instruments confirming all of the foregoing authority of any of the Attorneys
or substitute Attorneys. The foregoing shall not be deemed to be breached by
reason of any action or omission of any of the Attorneys or such substitute
Attorneys as may be appointed hereunder.
Principal understands that such Attorneys are employees of
Subservicer, and each Attorney shall have the power to name, by written
instrument, such substitute attorneys, with all powers hereunder, as such
Attorneys shall deem proper, provided that such substitute attorneys are
Servicing Officers under the Subservicing Agreement.
This power of attorney is revocable by the Principal.
IN WITNESS WHEREOF, Principal has caused this SPECIAL AND LIMITED
POWER OF ATTORNEY AND COVENANTS to be signed by its duly authorized officer
on this _____ day of _________________, 1995.
REMODELERS NATIONAL FUNDING CORP.
___________________________ By:_________________________________
Witness Name: [NAME OF OFFICER]
Title:______________________________
STATE OF TEXAS )
)
COUNTY OF _________ )
On the ____ day of _____________________, 1995, before me
personally appeared the above-named [NAME OF OFFICER], on behalf of
REMODELERS NATIONAL FUNDING CORP., to me known and known by me to be the
__________________________ of said corporation and acknowledged said
instrument so executed to be his free act and deed in said capacity and the
free act and deed of said corporation.
____________________________________
Notary Public
My commission expires:
_______________________
EXHIBIT C
QUARTERLY COMPLIANCE CERTIFICATE
OF [NAME OF SUBSERVICER]
___________, 1995
This QUARTERLY COMPLIANCE CERTIFICATE is being delivered pursuant to
the Mortgage Loan Subservicing Agreement dated as of ____________, 1995
between [NAME OF SUBSERVICER], as Servicer (the "SERVICER"), and REMODELERS
NATIONAL FUNDING CORP., as Owner (the "OWNER") (as may be amended from time
to time, the "AGREEMENT"). The terms used in this certificate, if not
defined herein, have the meanings specified in the Agreement.
As of the date hereof, the undersigned certifies that he/she is the
_________________________ of the Servicer and that, as such officer, is
authorized to execute and deliver this certificate in the name and on behalf
of the Servicer, and further certifies that:
(1) a review of the activities of Servicer during the
preceding fiscal quarter with respect to performance under the
Agreement has been made under the undersigned's supervision for the
purpose of determining whether the Servicer has fulfilled its
obligations under the Agreement and whether the Servicer is in
compliance with the provisions of Article IV; and
(2) to the best of the undersigned's knowledge, based
on such review, Servicer has fulfilled all of its obligations under
the Agreement and there is no default by Servicer in the
fulfillment of any of its obligations under the Agreement, except
with respect to the following defaults: ______ none of which have
occurred; or _____ as described on ATTACHMENT I hereto.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
QUARTERLY COMPLIANCE CERTIFICATE on this _____ day of ___________________,
1995.
By:_________________________________
Name:____________________________
Title:___________________________
QUARTERLY COMPLIANCE CERTIFICATE - Page 1
