Execution
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the
1st day of July, 1998, by and between XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and AURORA
LOAN SERVICES INC., a Delaware corporation ("the Servicer"), recites and
provides as follows:
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans
identified on Schedule I hereto (the "Serviced Mortgage Loans") on a
servicing-retained basis to Structured Asset Securities Corporation ("SASCO"),
which in turn has conveyed the Serviced Mortgage Loans to The Chase Manhattan
Bank, as trustee (the "Trustee") under a trust agreement dated as of July 1,
1998 (the "Trust Agreement"), among the Trustee, Norwest Bank Minnesota,
National Association, as master servicer ("Norwest," and, together with any
successor Master Servicer appointed pursuant to the provisions of the Trust
Agreement, the "Master Servicer") and SASCO.
WHEREAS, Xxxxxx Capital continues to own the servicing rights to the
Serviced Mortgage Loans, and may freely transfer such rights, subject to the
terms hereof.
WHEREAS, Xxxxxx Capital desires that the Servicer service the
Serviced Mortgage Loans, and the Servicer has agreed to do so, subject to the
right of Xxxxxx Capital to terminate the rights and obligations of the
Servicer hereunder at any time and to the other conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be
obligated, among other things, to supervise the servicing of the Serviced
Mortgage Loans on behalf of the Trustee, and shall have the right, under
certain circumstances, to terminate the rights and obligations of the Servicer
under this Servicing Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxx Capital and the Servicer
hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Flow Servicing
Agreement dated as of September 1, 1997, between Xxxxxx Capital and the
Servicer (the "Flow Servicing Agreement") incorporated by reference herein,
shall have the meanings ascribed to such terms in the Trust Agreement.
2. Servicing. The Servicer agrees, with respect to the Serviced
Mortgage Loans, to perform and observe the duties, responsibilities and
obligations that are to be performed and observed under the provisions of the
Flow Servicing Agreement, except as otherwise provided herein and on Exhibit A
hereto, and that the provisions of the Flow Servicing Agreement, as so
modified, are and shall be a part of this Agreement to the same extent as if
set forth herein in full.
3. Master Servicing; Termination of Servicer. The Servicer, including
any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the
provisions of this Agreement. The Master Servicer, acting on behalf of the
Trustee pursuant to the Trust Agreement, shall have the same rights as the
"Owner" (as defined in the Flow Servicing Agreement) to enforce the
obligations of the Servicer under the Flow Servicing Agreement. The Master
Servicer shall be entitled to terminate the rights and obligations of the
Servicer under this Agreement upon the failure of the Servicer to perform any
of its obligations under this Agreement, as provided in Article IX of the Flow
Servicing Agreement.
In addition, in the event that Xxxxxx Capital transfers the servicing
rights in respect of the Serviced Mortgage Loans to one or more successor
servicers, the rights and obligations of the Servicer under this Agreement
shall terminate, at the sole option of Xxxxxx Capital, without cause, upon
thirty days written notice to the Servicer, and each successor servicer shall
succeed to the rights and obligations of the Servicer under this Agreement as
of such date. Upon such termination the terminated Servicer shall not be
entitled to the Servicing Fee or any portion thereof, or, except as provided
in the Flow Servicing Agreement, to any other amounts in respect of the
Serviced Mortgage Loans.
The Servicer agrees that, notwithstanding anything to the contrary in
the Flow Servicing Agreement, Xxxxxx Capital is the sole owner of the
servicing rights relating to the Serviced Mortgaged Loans, and the Servicer
shall have no right to transfer the servicing thereof.
4. No Representations. Neither the Servicer nor the Master Servicer
shall be obligated or required to make any representations and warranties
regarding the Serviced Mortgage Loans in connection with the transactions
contemplated by the Trust Agreement and issuance of the certificates issued
pursuant thereto.
5. Notices. All notices and communications between or among the
parties hereto shall be in writing and shall be deemed received or given when
mailed first-class mail, postage prepaid, addressed to each other party at its
address specified below. Each party may designate to the other parties in
writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
6. Governing Law. THIS SERVICING AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
8. Reconstitution. Xxxxxx Capital and the Servicer agree that this
Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Flow Servicing Agreement.
9. Notices and Remittances to the Master Servicer. All notices
required to be delivered to the Owner or the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1998-8
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: #13451700, SASCO 1998-8
10. Errors and Omissions Insurance. The Servicer shall keep in force
during the term of this Agreement a fidelity bond and a policy or policies of
insurance covering errors and omissions in the performance of the Servicer's
obligations under this Agreement. Such fidelity bond and policy pr policies
shall be maintained with recognized insurers and shall be in such form and
amount as would permit the Servicer to be qualified as a FNMA or FHLMC
seller-servicer. The Servicer shall be deemed to have complied with this
provision if an affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. The Servicer
shall furnish to the Master Servicer a copy of each such bond and insurance
policy if (i) the Master Servicer so requests and (ii) the Servicer is not an
affiliate of Xxxxxx Brothers Inc. at the time of such request.
11. Annual Audit Report. On or before April 30 of each year,
beginning with April 30, 1999, Servicer shall cause a firm of independent
public accountants (who may also render other services to Servicer), which is
a member of the American Institute of Certified Public Accountants, to furnish
a statement to Owner, each Directing Holder and Master Servicer, to the effect
that such firm has examined certain documents and records for the preceding
fiscal year (or during the period from the date of commencement of such
servicer's duties hereunder until the end of such preceding fiscal year in the
case of the first such certificate) and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, such firm is of the opinion that Servicer's
overall servicing operations have been conducted in compliance with the
Uniform Single Attestation Program for Mortgage Bankers except for such
exceptions that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers requires it to report, in which case such
exceptions shall be set forth in such statement.
12. Annual Officer's Certificate. On or before April 30 of each year,
beginning with April 30, 1999, the Servicer, at its own expense, will deliver
to the Owner, each Directing Holder and Master Servicer a Servicing Officer's
certificate stating, as to each signer thereof, that (i) a review of the
activities of the Servicer during such preceding fiscal year and of
performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
for such year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officers and the
nature and status thereof including the steps being taken by the Servicer to
remedy such default.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
AURORA LOAN SERVICES INC.
By: /s/ Xxx X. Xxxxxxxx
Name: Xxx X. Xxxxxxxx
Title: Executive Vice President
EXHIBIT A
Modifications to the Flow Servicing Agreement
1. The following is hereby added immediately following the words
"incidental fees and charges" in the definition of "Ancillary Income"
in Article I: ", but not including any premium or penalty associated
with a prepayment of principal of a Mortgage Loan."
2. The definition of "Custodial Agreement" in Article I is hereby
deleted and replaced with the following:
"The custodial agreements relating to custody of the
Serviced Mortgage Loans among: (i) U.S. Bank Trust National
Association, as Custodian, The Chase Manhattan Bank, as Trustee, and
Structured Asset Securities Corporation and (ii) Chase Bank of Texas,
N.A., as Custodian, The Chase Manhattan Bank, as Trustee, and
Structured Asset Securities Corporation, each dated as of July 1,
1998."
3. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance
Date, the period beginning on the Cut-off Date and ending on August
1. With respect to each subsequent Remittance Date, the period
commencing on the second day of the month immediately preceding the
month in which such Remittance Date occurs and ending on the first
day of the month in which such Remittance Date occurs."
4. The definition of "Monthly Advance" in Article I is hereby amended by
adding at the end of such definition the following: ", but only to
the extent that such amount is expected, in the reasonable judgment
of the Servicer, to be recoverable from collections or other
recoveries in respect of such Mortgage Loan."
5. The definition of "Qualified Depository" in Article I is hereby
deleted and replaced with the following:
"Any of (i) a depository the accounts of which are insured
by the FDIC and the debt obligations of which are rated AA or better
by Fitch and S&P; (ii) the corporate trust department of any bank the
debt obligations of which are rated at least A-1 or its equivalent by
each of Fitch and S&P; or (iii) the Servicer, unless the Master
Servicer is notified by either Fitch or S&P that the designation of
the Servicer as a Qualified Depository will result in a
qualification, withdrawal or downgrade of the then-current rating of
any of the Certificates."
6. The definition of "Remittance Date" in Article I is hereby deleted
and replaced with the following:
"The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month, following
the First Remittance Date."
7. The definition of "Servicing Advance" in Article I is hereby amended
by adding, immediately after the phrase "but not limited to, the cost
of", the following: "transfer of servicing of Distressed Mortgage
Loans to the Special Servicer pursuant to Section 9.02, and".
8. The first sentence of the definition of "Servicing Fee" in Article I
is hereby deleted and replaced with the following: "The servicing fee
shall be an amount equal to one-twelfth the product of (a) a rate per
annum equal to 0.50% and (b) the outstanding principal balance of
such Mortgage Loan. The obligation of the Master Servicer to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds to the extent permitted by Section
3.02 of this Agreement) of such Monthly Payment collected by the
Servicer, or as otherwise provided under this Agreement."
9. The fourth and fifth paragraphs of Section 3.01 are hereby deleted
and replaced with the following paragraph:
"Consistent with the terms of this Agreement, the Servicer
may waive any late payment charge, assumption fee or other fee that
may be collected in the ordinary course of servicing the Mortgage
Loans. The Servicer shall not make any future advances to any obligor
under any Mortgage Loan, and (unless the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the judgment of
the Servicer, reasonably foreseeable) the Servicer shall not permit
any modification of any material term of any Mortgage Loan, including
any modification that would change the Mortgage Interest Rate, defer
or forgive the payment of principal or interest, reduce or increase
the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan.
In the event of any such modification which permits the deferral of
interest or principal payments on any Mortgage Loan, the Servicer
shall, on the Business Day immediately preceding the Remittance Date
in any month in which any such principal or interest payment has been
deferred, make a Monthly Advance in accordance with Section 4.03, in
an amount equal to the difference between (a) such month's principal
and one month's interest at the Remittance Rate on the unpaid
principal balance of such Mortgage Loan and (b) the amount paid by
the Mortgagor. The Servicer shall be entitled to reimbursement for
such advances to the same extent as for all other advances made
pursuant to Section 4.03. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and
empowered, to execute and deliver on behalf of itself and the Master
Servicer, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties. Upon the request of the Servicer, the
Master Servicer shall execute and deliver to the Servicer any powers
of attorney and other documents, furnished to it by the Servicer and
reasonably satisfactory to the Master Servicer, necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement.
Notwithstanding anything to the contrary in this Agreement,
the Servicer shall not waive any premium or penalty in connection
with a prepayment of principal of any Mortgage Loan, and shall not
consent to the modification of any Mortgage Note to the extent that
such modification relates to payment of a prepayment premium or
penalty."
10. The words "Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc., owner of residential Mortgage Loans, Group No. 1997-ALSI, and
various Mortgagors" in the first paragraph of Section 3.03 are hereby
deleted and replaced with the following: "Norwest Bank Minnesota,
National Association, as master servicer for SASCO 1998-8."
11. Section 3.03 is further amended by deleting the word "and" at the end
of clause (viii), replacing the period at the end of clause (ix) with
"; and", and adding the following immediately after clause (ix):
"(x) any principal prepayment penalties received in
connection with the Mortgage Loans."
12. Section 3.04 is amended by deleting the word "and" at the end of
clause (v), replacing the period at the end of clause (vi) with ";
and", and adding the following immediately following clauses (vii)
and (viii):
"(vii) to reimburse itself for Monthly Advances of the
Servicer's funds made pursuant to Section 7.03, it being understood
that, in the case of any such reimbursement, the Servicer's right
thereto shall be prior to the rights of the Trust Fund;
(viii) to reimburse itself for unreimbursed Servicing
Advances, and for any unpaid Servicing Fees, the Servicer's right to
reimburse itself pursuant to this subclause (viii) with respect to
any Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds
and other amounts received in respect of the related REO Property,
and such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of any such reimbursement, the
Servicer's right thereto shall be prior to the rights of the
Purchaser;"
13. The words "Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc., owner of residential Mortgage Loans, Group No. 1997-ALSI, and
various Mortgagors" in the first paragraph of Section 3.05 are hereby
deleted and replaced with the following: "Norwest Bank Minnesota,
National Association, as master servicer for SASCO 1998-8."
14. All references in Section 3.11 to the disposition of REO Properties
within a two year period are hereby deleted and replaced with a three
year period.
15. The first paragraph of Section 4.01 is hereby deleted and replaced
with the following:
"On each Remittance Date the Servicer shall remit by wire
transfer of immediately available funds to the Master Servicer (a)
all amounts deposited in the Custodial Account as of the close of
business on the last day of the related Due Period (net of charges
against or withdrawals from the Custodial Account pursuant to Section
3.04), plus (b) all amounts, if any, which the Servicer is obligated
to distribute pursuant to Section 7.03, minus (c) any amounts
attributable to Principal Prepayments, Liquidation Proceeds,
Insurance Proceeds, Condemnation Proceeds or REO Disposition Proceeds
received after the applicable Prepayment Period, which amounts shall
be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account
in connection with such Principal Prepayment in accordance with
Section 7.03, and minus (d) any amounts attributable to Monthly
Payments collected but due on a due date or dates subsequent to the
first day of the month in which such Remittance Date occurs, which
amounts shall be remitted on the Remittance Date next succeeding the
Due Period for such amounts."
16. Section 4.02 is hereby amended by deleting the words "Remittance
Date" in the first line of such Section, and substituting the
following: "tenth Business Day of each month"
17. The third paragraph of Section 5.01 is hereby deleted.
18. The following paragraph is hereby added at the end of Section 9.02:
"On the second Business Day of each month, the Servicer
shall orally inform the Master Servicer and the Special Servicer as
to which Mortgage Loans have become delinquent for a period of 91
days or more, without giving effect to any grace period permitted by
the related Mortgage Note (each, a "Distressed Mortgage Loan"). No
Mortgage Loan shall be considered to be delinquent for such purpose
by virtue of the related Mortgagor having made payment to a prior
servicer. Any such Mortgage Loan as to which all past due payments
are made prior to the Notice Date shall not be considered to be a
Distressed Mortgage Loan, and the servicing thereof shall not be
transferred as provided below. On the fourth Business Day of each
month (the "Notice Date"), the Servicer shall send by facsimile a
written listing of the Distressed Mortgage Loans to the Master
Servicer, the Trustee and the Custodian, and shall mail to the
Mortgagor of each Mortgage Loan listed in a Transfer Notice a letter
advising each such Mortgagor of the transfer of the servicing of the
related Mortgage Loan to the Special Servicer, in accordance with the
Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990; provided,
however, the content and format of such letter shall have the prior
approval of the Special Servicer. The Servicer shall promptly provide
the Special Servicer with copies of all such notices. The transfer of
servicing with respect to each such Mortgage Loan to the Special
Servicer shall be effected by the Servicer not later than fifteenth
day following the applicable Notice Date (the "Transfer Date"). By
the Business Day immediately following each Notice Date, the Servicer
shall provide the Master Servicer, the Special Servicer, the Trustee
and the Custodian with a certification (the "Transfer Notice")
listing the Distressed Mortgage Loans.
At least five Business Days prior to the Transfer Date, the
Servicer shall deliver, with respect to the Distressed Mortgage Loans
listed on the related Transfer Notice, to the Special Servicer all
Servicing Files, and to the Special Servicer and the Master Servicer
a preliminary loan level tape or other electronic media (a "Report")
in form reasonably acceptable to the Servicer, the Master Servicer
and the Special Servicer. Within two Business Days following such
Transfer Date, the Servicer shall deliver such Report in final form
reasonably acceptable to the Master Servicer and the Special
Servicer, and commensurate with generally acceptable industry
standards, detailing the amount of any unreimbursed Monthly Advances,
Servicing Advances and accrued and unpaid Servicing Fees on a loan
level basis. Should the Master Servicer or the Special Servicer
desire a loan level tape or other electronic media containing
information which is not readily extractable from the Servicer's
servicing system, the Servicer shall diligently cooperate to make
such loan level data available to the Master Servicer and Special
Servicer. In addition, at least five Business Days prior to the
Transfer Date, the Servicer shall transfer to the Special Servicer
any funds held in an Escrow Account or Custodial Account relating to
the Distressed Mortgage Loans listed in the related Transfer Notice.
Upon the successful completion of the transfer of servicing for
Distressed Mortgage Loans, the Special Servicer will reimburse the
Servicer for any unreimbursed Monthly Advances, Servicing Advances
and accrued and unpaid Servicing Fees with respect to such Distressed
Mortgage Loans which have been properly documented. The Servicer
shall be paid, from the Custodial Account, a termination fee of
$25.00 for each Distressed Mortgage Loan transferred to the Special
Servicer.
In connection with the transfer of any Distressed Mortgage
Loan, (i) the Servicer will be responsible for servicing the
Distressed Mortgage Loan until the effective date of transfer of
servicing to the Special Servicer, but shall have no right or
obligation to service such Distressed Mortgage Loan from and after
the effective date of the transfer of servicing to the Special
Servicer, (ii) notwithstanding clause (i) above, the Servicer shall
include the Distressed Mortgage Loan in its monthly remittance report
pursuant to Section 4.02 for the month in which such transfer is
effected and shall be obligated, subject to Section 7.03, to make the
Monthly Advance with respect to such Distressed Mortgage Loan on the
Remittance Date in the month in which such transfer is effected, in
each case, regardless of whether the Remittance Date occurs before or
after the effective date of such transfer, (iii) the amount of
Monthly Advances to be reimbursed to the Servicer by the Special
Servicer hereunder shall include the Monthly Advance described in
clause (ii) above regardless of whether the Servicer makes such
Monthly Advance before or after the effective date of such transfer,
(iv) the Servicer shall, no later than the end of the month in which
such transfer is effected, provide to the Special Servicer loan level
information (in the loan level tape or other electronic media or
other agreed-upon form) regarding the Distressed Mortgage Loan during
the month of such transfer as may be necessary to enable the Special
Servicer to provide such information in its remittance report for the
next following month, and (v) the Servicer shall not be entitled to
the Servicing Fee with regard to any such Distressed Mortgage Loan
for the month in which such transfer occurs."
19. The following paragraph is added at the end of Section 10.01:
"Neither the Master Servicer nor any successor servicer
(including the Owner and the Master Servicer) shall be liable for any
acts or omissions of the Servicer or any predecessor servicer. In
particular, neither the Master Servicer nor any successor servicer
(including the Owner and the Master Servicer) shall be liable for any
servicing errors or interruptions resulting from any failure of the
Servicer to maintain computer and other information systems that are
year-2000 compliant."
20. The following words are hereby added after the words "Attention: Xxxx
Xxxxx" in Section 10.06(ii):
"with a copy to:
Aurora Loan Services Inc.
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxx Xxxxxxxx"
