Exhibit 99.10(b)
EXECUTION COPY
===============================================================================
FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
--------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
NEW CENTURY MORTGAGE CORPORATION,
Seller
--------------------
Dated as of November 1, 2005
Conventional,
Fixed and Adjustable Rate Residential Mortgage Loans
===============================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS...................................................1
SECTION 2. AGREEMENT TO PURCHASE........................................15
SECTION 3. MORTGAGE SCHEDULES...........................................15
SECTION 4. PURCHASE PRICE...............................................16
SECTION 5. EXAMINATION OF MORTGAGE FILES................................16
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................17
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................19
SECTION 8. TRANSFER OF SERVICING........................................19
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH..................................22
SECTION 10. CLOSING......................................................41
SECTION 11. CLOSING DOCUMENTS............................................42
SECTION 12. COSTS........................................................43
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................43
SECTION 14. THE SELLER...................................................45
SECTION 15. FINANCIAL STATEMENTS.........................................46
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............46
SECTION 17. NOTICES......................................................47
SECTION 18. SEVERABILITY CLAUSE..........................................47
SECTION 19. COUNTERPARTS.................................................48
SECTION 20. GOVERNING LAW................................................48
SECTION 21. INTENTION OF THE PARTIES.....................................48
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....48
-i-
SECTION 23. WAIVERS......................................................49
SECTION 24. EXHIBITS.....................................................49
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................49
SECTION 26. REPRODUCTION OF DOCUMENTS....................................49
SECTION 27. FURTHER AGREEMENTS...........................................50
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................50
SECTION 29. NO SOLICITATION..............................................50
SECTION 30. WAIVER OF TRIAL BY JURY......................................50
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................51
SECTION 32. COMPLIANCE WITH REGULATION AB................................51
-ii-
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
-iii-
FLOW MORTGAGE LOAN
------------------
PURCHASE AND WARRANTIES AGREEMENT
---------------------------------
This FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of November 1, 2005, by and between Xxxxxx Xxxxxxx
Mortgage Capital Inc., a New York corporation, having an office at 0000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and New
Century Mortgage Corporation, a California corporation, having an office at
00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain conventional fixed and adjustable rate residential first-lien
and second-lien mortgage loans (the "Mortgage Loans") on a servicing released
basis as described herein, and which shall be delivered in pools of whole
loans (each, a "Mortgage Loan Package") on various dates as provided herein
(each, a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of
trust or other security instrument creating a first lien or second-lien on a
residential dwelling located in the jurisdiction indicated on the Mortgage
Loan Schedule for the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing by the Interim Servicer and control of the
Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage Securitization Transaction.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Purchaser
and the Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms
shall have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
-1-
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Xxx Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Flow Mortgage Loan Purchase and Warranties
Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Ancillary Income: All late charges, assumption fees, escrow
account benefits, reinstatement fees, and similar types of fees arising from
or in connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related
Mortgage Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection
6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original
terms or any modifications thereof provides for amortization beyond its
scheduled maturity date.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New
York or the State in which the Originator's servicing operations are located
or (iii) the state in which the Custodian's operations are located, are
authorized or obligated by law or executive order to be closed.
Cash-Out Refinance: A Refinanced Mortgage Loan in which the
proceeds received were in excess of the amount of funds required to repay the
principal balance of any existing first mortgage on the related Mortgaged
Property, pay related closing costs and satisfy any outstanding subordinate
mortgages on the related Mortgaged Property and which provided
-2-
incidental cash to the related Mortgagor of more than 1% of the original
principal balance of such Mortgage Loan.
Closing Date: The date or dates on which the Purchaser from time
to time shall purchase, and the Seller from time to time shall sell, the
Mortgage Loans listed on the related Mortgage Loan Schedule with respect to
the related Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as
of such date of any mortgage loan or mortgage loans that are senior or equal
in priority to the Second Lien Loan and which are secured by the same
Mortgaged Property to (b) the Appraised Value as determined pursuant to the
Underwriting Guidelines of the related Mortgaged Property as of the
origination of the Second Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby
the Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a
Fixed Rate Mortgage Loan in accordance with the terms of the related Mortgage
Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and
maintained pursuant to Section 2.04 of the Servicing Agreement (with respect
to each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of
the originals of each Mortgage Note, Mortgage, Assignment of Mortgage and
other Mortgage Loan Documents. If more than one Custodial Agreement is in
effect at any given time, all of the individual Custodial Agreements shall
collectively be referred to as the "Custodial Agreement".
Custodian: Deutsche Bank Trust Company Americas, or the
Custodian's successor in interest or permitted assigns, or any successor to
the Custodian under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
-3-
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
Determination Date: The date specified in the Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan, the period commencing on the day immediately succeeding the Due Date for
such Mortgage Loan occurring in the month preceding the month of the
Remittance Date and ending on the next Due Date.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of
the outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account created and maintained
pursuant to Section 2.06 of the Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx
Mae Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the
United States Department of Housing and Urban Development, or any successor
thereto and including the Federal Housing Commissioner and the Secretary of
Housing and Urban Development where appropriate under the FHA Regulations.
-4-
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and
eligible to own and service mortgage loans such as the FHA mortgage loans.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which
amount is added to the Index in accordance with the terms of the related
Mortgage Note to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that
term was defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), "high risk home," "predatory" or similar
loan under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans having high interest rates, points and/or fees) or (c) a Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard & Poor's Glossary.
For avoidance of doubt, the parties agree that this definition shall apply to
any law regardless of whether such law is presently, or in the future becomes,
the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any
federal agency or official thereof which may from time to time succeed to the
functions thereof with regard to FHA Mortgage Insurance. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof
such as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
-5-
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Insured Depository Institution: Insured Depository Institution
shall have the meaning ascribed to such term by Section 1813(c)(2) of Title 12
of the United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate Mortgage Loan, the date, specified in the related Mortgage Note and the
related Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to
an Adjustable Rate Mortgage Loan which provides for an absolute maximum
Mortgage Interest Rate thereunder. The Mortgage Interest Rate during the terms
of each Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage Interest Rate at the time of origination of such Adjustable Rate
Mortgage Loan by more than the Lifetime Rate Cap set forth as an amount per
annum on the related Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the
Originator generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of
the Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the
related Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal
Manufactured Home Construction and Safety Standards adopted on July 15, 1976,
by the Department of Housing and Urban Development ("HUD Code"), as amended in
2000, which preempts state and local building codes. Each unit is identified
by the presence of a HUD Plate/Compliance Certificate label. The sections are
then transported to the site and joined together and affixed to a pre-built
permanent foundation (which satisfies the manufacturer's requirements and all
state, county, and local building codes and regulations). The manufactured
home is built on a non-removable, permanent frame chassis that supports the
complete unit of walls, floors, and roof. The underneath part of the home may
have running gear (wheels, axles, and brakes) that enable it to be transported
to the permanent site. The wheels and hitch are removed prior to anchoring the
unit to the permanent foundation. The manufactured home must be classified as
real estate and taxed accordingly. The permanent foundation may be on land
owned by the Mortgagor or may be on leased land.
-6-
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument securing
a Mortgage Note, which creates a first lien, in the case of a First Lien Loan,
or a second lien, in the case of a Second Lien Loan, on an unsubordinated
estate in fee simple in real property securing the Mortgage Note; except that
with respect to real property located in jurisdictions in which the use of
leasehold estates for residential properties is a widely-accepted practice,
the mortgage, deed of trust or other instrument securing the Mortgage Note may
secure and create, with respect to a First Lien Loan, a first lien, and with
respect to a Second Lien Loan, a second lien, in each case, upon a leasehold
estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set
forth in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the applicable Mortgage Loan Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, Servicing Rights and all other rights, benefits, proceeds
and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting
forth the following information with respect to each Mortgage Loan in the
related Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2) the Mortgagor's name; (3) the social security number of the
Mortgagor; (4) a code indicating whether the Mortgagor's race and/or ethnicity
is (i) native American or Alaskan native, (ii) Asian/Pacific islander, (iii)
African American, (iv) white, (v) Hispanic or Latino, (vi) other minority,
(vii) not provided by the Mortgagor, (viii) not applicable (if the Mortgagor
is an entity) and (ix) unknown or missing; (5) the street address of the
Mortgaged Property including the city, state and zip code; (6) a code
indicating whether the Mortgagor is self-employed; (7) a code indicating
whether the Mortgaged Property is owner-occupied, investment property or a
second home; (8) a code indicating the
-7-
number and type of residential units constituting the Mortgaged Property (e.g.
single family residence, two-family residence, three-family residence,
four-family residence, multifamily residence, condominium, manufactured
housing, mixed-use property, raw land and other non-residential properties,
planned unit development or cooperative stock in a cooperative housing
corporation); (9) the original months to maturity or the remaining months to
maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (10) the LTV or CLTV, as
applicable, at origination; (11) the Mortgage Interest Rate as of the related
Cut-off Date; (12) the date on which the first Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently
in effect, the Due Date; (13) the stated maturity date; (14) the amount of the
Monthly Payment as of the related Cut-off Date; (15) whether the Mortgage Loan
has Monthly Payments that are interest-only for a period of time, and the
interest-only period, if applicable (and with respect to each Second Lien
Loan, whether the related first lien mortgage loan has monthly payments that
are interest-only for a period of time, and the interest-only period, if
applicable); (16) the last payment date on which a payment was actually
applied to the outstanding principal balance; (17) the schedule of the payment
delinquencies in the prior 12 months; (18) the Servicing Fee Rate; (19) the
original principal amount of the Mortgage Loan; (20) the principal balance of
the Mortgage Loan as of the close of business on the related Cut-off Date,
after deduction of payments of principal due and collected on or before the
related Cut-off Date; (21) with respect to each Mortgage Loan with a second
lien behind it, the combined principal balance of the Mortgage Loan and the
applicable second lien loan, at origination, (22) a code indicating whether
there is a simultaneous second; (23) with respect to Adjustable Rate Mortgage
Loans, the Interest Rate Adjustment Date; (24) with respect to Adjustable Rate
Mortgage Loans, the Gross Margin; (25) with respect to Adjustable Rate
Mortgage Loans, the Lifetime Rate Cap under the terms of the Mortgage Note;
(26) with respect to Adjustable Rate Mortgage Loans, a code indicating the
type of Index, including the methodology for rounding (e.g. rounded upward, if
necessary, to the nearest ten thousandth (.0001)) and the applicable time
frame for determining the Index; (27) the product type of Mortgage Loan (i.e.,
Fixed Rate, Adjustable Rate, First Lien Loan or Second Lien Loan), and with
respect to each Second Lien Loan, the product type of the related first lien
loan; (28) a code indicating the purpose of the loan (i.e., purchase,
Rate/Term Refinance or Cash-Out Refinance); (29) a code indicating the
documentation style (i.e. no documents, full, alternative, reduced, no
income/no asset, stated income, no ration, reduced or NIV); (30) asset
verification (Y/N); (31) the loan credit classification (as described in the
Underwriting Guidelines); (32) whether such Mortgage Loan provides for a
Prepayment Penalty; (33) the Prepayment Penalty period of such Mortgage Loan,
if applicable; (34) a description of the Prepayment Penalty, if applicable;
(35) the Mortgage Interest Rate as of origination; (36) the credit risk score
(FICO score); (37) the date of origination; (38) with respect to Adjustable
Rate Mortgage Loans, the Mortgage Interest Rate adjustment period; (39) with
respect to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate
adjustment percentage; (40) with respect to Adjustable Rate Mortgage Loans,
the Mortgage Interest Rate floor; (41) the Mortgage Interest Rate calculation
method (i.e., 30/360, simple interest, other); (42) with respect to Adjustable
Rate Mortgage Loans, the Periodic Rate Cap as of the first Interest Rate
Adjustment Date; (43) with respect to each Adjustable Rate Mortgage Loan, a
code indicating whether the Mortgage Loan provides for negative amortization;
(44) a code indicating whether the Mortgage Loan has negative amortization and
the maximum of such negative amortization; (45) a code indicating whether the
-8-
Mortgage Loan is a Balloon Mortgage Loan; (46) a code indicating whether the
Mortgage Loan by its original terms or any modifications thereof provides for
amortization beyond its scheduled maturity date; (47) the original Monthly
Payment due; (48) the Appraised Value; (49) appraisal type; (50) appraisal
date; (51) a code indicating whether the Mortgage Loan is covered by a PMI
Policy and, if so, identifying the PMI Policy provider; (54) the certificate
number of the PMI Policy, if applicable; (52) the amount of coverage of the
PMI Policy, if applicable; (53) in connection with a condominium unit, a code
indicating whether the condominium project where such unit is located is
low-rise or high-rise; (54) a code indicating whether the Mortgaged Property
is a leasehold estate; (55) with respect to the related Mortgagor, the
debt-to-income ratio; (56) sales price; (57) automated valuation model (AVM);
(58) a code indicating whether the Mortgage Loan is a MERS Designated Mortgage
Loan and the MERS Identification Number, if applicable; (59) a field
indicating whether such Mortgage Loan is a Home Loan; and (60) the DU or LP
number, if applicable. With respect to the Mortgage Loans in the aggregate,
the related Mortgage Loan Schedule shall set forth the following information,
as of the related Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; (4) the
weighted average maturity of the Mortgage Loans; (5) the average principal
balance of the Mortgage Loans; (6) the applicable Cut-off Date; and (7) the
applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) securing repayment of the debt
evidenced by the related Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement which does not contain a
provision pursuant to which the Mortgagor may convert the Adjustable Rate
Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Originator, will not or, in the case of a proposed advance, would not, be
ultimately recoverable from related Insurance Proceeds, Liquidation Proceeds
or otherwise. The determination by the Originator that it has made a
Nonrecoverable Advance or that any proposed advance of principal and interest,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate delivered to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the
-9-
Secretary or one of the Assistant Treasurers or Assistant Secretaries of the
Seller, and delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Seller, reasonably acceptable to the Purchaser, provided that
any Opinion of Counsel relating to (a) the qualification of any account
required to be maintained pursuant to this Agreement as an Eligible Account,
(b) qualification of the Mortgage Loans in a REMIC or (c) compliance with the
REMIC Provisions, must be (unless otherwise stated in such Opinion of Counsel)
an opinion of counsel who (i) is in fact independent of the Seller and any
servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller or any servicer of the Mortgage
Loans or in an Affiliate of either and (iii) is not connected with the Seller
or any servicer of the Mortgage Loans as an officer, employee, director or
person performing similar functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
Periodic Rate Cap: The provision of each Mortgage Note related to
an Adjustable Rate Mortgage Loan which provides for an absolute maximum amount
by which the Mortgage Interest Rate therein may increase or decrease on an
Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Rate Cap for each Adjustable Rate Mortgage
Loan is the rate set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the amount
of any premium or penalty required to be paid by the Mortgagor if the
Mortgagor prepays such Mortgage Loan as provided in the related Mortgage Note
or Mortgage.
Principal Prepayment: Any payment or other recovery of principal
on a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
-10-
Purchase Price and Terms Agreement: Those certain agreements
setting forth the general terms and conditions of the transactions consummated
herein and identifying the Mortgage Loans to be purchased from time to time
hereunder, by and between the Seller, the Originator and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its successor
in interest or assigns or any successor to the Purchaser under this Agreement
as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the Originator, who had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation
was not affected by the approval or disapproval of the Mortgage Loan, and such
appraiser and the appraisal made by such appraiser both satisfied the
requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller
purchased Mortgage Loans, provided that the following conditions are
satisfied: (i) such Mortgage Loans were originated pursuant to an agreement
between the Seller and such Person that contemplated that such Person would
underwrite mortgage loans from time to time, for sale to the Seller, in
accordance with underwriting guidelines designated by the Seller ("Designated
Guidelines") or guidelines that do not vary materially from such Designated
Guidelines; (ii) such Mortgage Loans were in fact underwritten as described in
clause (i) above and were acquired by the Seller within 180 days after
origination; (iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the Seller in origination of mortgage
loans of the same type as the Mortgage Loans for the Seller's own account or
(y) the Designated Guidelines were, at the time such Mortgage Loans were
underwritten, designated by the Seller on a consistent basis for use by
lenders in originating mortgage loans to be purchased by the Seller; and (iv)
the Seller employed, at the time such Mortgage Loans were acquired by the
Seller, pre-purchase or post-purchase quality assurance procedures (which may
involve, among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels) designed to
ensure that Persons from which it purchased mortgage loans properly applied
the underwriting criteria designated by the Seller.
Qualified Insurer: An insurance company duly qualified as such
under the laws of the states in which the Mortgaged Properties are located,
duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided, approved as an insurer
by Xxxxxx Mae and Xxxxxxx Mac and whose claims paying ability is rated in the
highest rating category by any of the Rating Agencies with respect to primary
mortgage insurance and in the two highest rating categories by Best's with
respect to hazard and flood insurance (or such other rating as may be required
by a Rating Agency in connection with a Securitization Transaction in order to
achieve the desired ratings for the securities to be issued in connection with
such Securitization Transaction).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of
-11-
substitution (or in the case of a substitution of more than one mortgage loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess of
the outstanding principal balance of the Deleted Mortgage Loan (the amount of
any shortfall will be deposited in the Custodial Account by the Seller in the
month of substitution); (ii) have a Mortgage Interest Rate not less than and
not more than 1% greater than the Mortgage Interest Rate of the Deleted
Mortgage Loan; (iii) have a remaining term to maturity not greater than and
not more than one year less than that of the Deleted Mortgage Loan; (iv) be of
the same type as the Deleted Mortgage Loan (i.e., fixed rate or adjustable
rate with same Mortgage Interest Rate Caps); and (v) comply with each
representation and warranty (respecting individual Mortgage Loans) set forth
in Section 9 hereof.
Rate/Term Refinance: A Refinanced Mortgage Loan, in which the
proceeds received were not in excess of the amount of funds required to repay
the principal balance of any existing first mortgage loan on the related
Mortgaged Property, pay related closing costs and satisfy any outstanding
subordinate mortgages on the related Mortgaged Property and did not provide
incidental cash to the related Mortgagor of more than one percent (1%) of the
original principal balance of such Mortgage Loan.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or
their respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization
Transaction.
Reconstitution Agreements: The agreement or agreements entered
into by the Seller and/or the Originator and the Purchaser and/or certain
third parties on the Reconstitution Date or Dates with respect to any or all
of the Mortgage Loans sold hereunder, in connection with a Whole Loan
Transfer, Agency Transfer or a Securitization Transaction pursuant to Section
13, including, but not limited to, a seller's warranties and servicing
agreement with respect to a Whole Loan Transfer, and a pooling and servicing
agreement and/or seller/servicer agreements and related custodial/trust
agreement and documents with respect to a Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
-12-
REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of Subchapter M
of Chapter 1, Subtitle A of the Code, and related provisions and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The date specified in the Servicing Agreement
(with respect to each Mortgage Loan, as specified therein).
Repurchase Price: With respect to any Mortgage Loan, a price equal
to the sum of: (i) the product of (a) par (or, with respect to any Mortgage
Loan required to be repurchased on or prior to the first anniversary of the
related Closing Date, the greater of (x) par and (y) the excess of the
applicable Purchase Price Percentage over par multiplied by a fraction equal
to (1) 360 minus the number of days from but excluding the related Closing
Date, up through and including the date of such repurchase, divided by (2)
360) and (b) the outstanding principal balance of such Mortgage Loan, (ii)
accrued interest thereon at the applicable Mortgage Interest Rate from the
last "interest paid to" date through the date of such repurchase, (iii) the
amount of any outstanding advances owed to any servicer, and (iv) all costs
and expenses incurred by the Purchaser or any servicer arising out of or based
upon such breach, including without limitation costs and expenses incurred in
the enforcement of the Seller's repurchase obligation hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or
(2) an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: New Century Mortgage Corporation, its successors in
interest and assigns.
Seller Information: As defined in Subsection 32.04(a).
Servicing Agreement: The servicing agreement, dated as of November
1, 2005, between the Purchaser and the Originator, providing for the
Originator to service the Mortgage Loans as specified in the Servicing
Agreement.
Servicing Fee: With respect to each Mortgage Loan subject to the
Servicing Agreement, a fee payable monthly equal to one-twelfth of the product
of (a) the Servicing Fee Rate and (b) the outstanding principal balance of
such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Originator under the Servicing Agreement. The obligation of the Purchaser to
-13-
pay the Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of such
Monthly Payment collected by the Originator, or as otherwise provided under
this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Originator consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received
by the Seller for servicing the Mortgage Loans; (c) any late fees, penalties
or similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage
Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before
such date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Sections 9.03 and 14.01.
-14-
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the
Originator, a copy of which is attached hereto as Exhibit G and a then-current
copy of which shall be attached as an exhibit to the related Assignment and
Conveyance.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
actual unpaid principal balance on the related Cut-off Date in an amount as
set forth in the related Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate actual unpaid principal balance of the Mortgage Loans accepted by
the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans
to be purchased on each Closing Date in accordance with the related Purchase
Price and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller is obligated to deliver those Mortgage Loans owned by
the Seller and funded by the Originator pursuant to the original terms of the
Originator's commitment to the mortgagor. The Seller shall deliver the related
Mortgage Loan Schedule for the Mortgage Loans to be purchased on a particular
Closing Date to the Purchaser at least two (2) Business Days prior to the
related Closing Date. The related Mortgage Loan Schedule shall be the related
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the related Closing Date deleted.
-15-
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage
of par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate actual unpaid
principal balance, as of the related Cut-off Date, of the Mortgage Loans
listed on the related Mortgage Loan Schedule, after application of scheduled
payments of principal due on or before the related Cut-off Date, but only to
the extent such payments were actually received. The initial principal amount
of the related Mortgage Loans shall be the aggregate actual unpaid principal
balance of the Mortgage Loans, so computed as of the related Cut-off date. If
so provided in the related Purchase Price and Terms Agreement, portions of the
Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the
Purchaser shall pay to the Seller, at closing, accrued interest from the last
"interest paid to" date through the day immediately preceding the related
Closing Date, inclusive, on the aggregate actual unpaid on the current
principal amount of the related Mortgage Loans as of the related Cut-off Date
at the weighted average Mortgage Interest Rate of those Mortgage Loans. The
Purchase Price plus accrued interest as set forth in the preceding paragraph
shall be paid to the Seller by wire transfer of immediately available funds to
an account designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal
collected on or after the related Cut-off Date, and (3) all payments of
interest on the Mortgage Loans net of applicable Servicing Fees (minus that
portion of any such payment which is allocable to the period prior to the
related Cut-off Date). The outstanding principal balance of each Mortgage Loan
as of the related Cut-off Date is determined after application of payments of
principal due on or before the related Cut-off Date, to the extent actually
collected, together with any unscheduled principal prepayments collected prior
to such Cut-off Date; provided, however, that payments of scheduled principal
and interest paid prior to such Cut-off Date, but to be applied on a Due Date
beyond the related Cut-off Date shall not be applied to the principal balance
as of the related Cut-off Date. Such prepaid amounts shall be the property of
the Purchaser. The Seller shall deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of the
Purchaser for subsequent remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least three (3) Business Days prior to the related Closing
Date, the Seller shall (a) deliver to the Purchaser or its designee in escrow,
for examination with respect to each Mortgage Loan to be purchased, the
related Mortgage File, including a copy of the Assignment of Mortgage,
pertaining to each Mortgage Loan, or (b) make the related Mortgage File
available to the Purchaser for examination at such other location as shall
otherwise be acceptable to the Purchaser. Such examination may be made by the
Purchaser or its designee at any reasonable time before or after the related
Closing Date. If the Purchaser makes such examination prior to the related
Closing Date and determines, in its sole discretion, that any Mortgage Loans
are unacceptable to the Purchaser for any reason, such Mortgage Loans shall be
deleted from the related Mortgage Loan Schedule, and may be replaced by a
Qualified Substitute Mortgage Loan (or Loans) acceptable to the Purchaser. The
Purchaser may, at its option and without notice to
-16-
the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee
has conducted or has failed to conduct any partial or complete examination of
the Mortgage Files shall not affect the Purchaser's (or any of its
successor's) rights to demand repurchase, substitution or other relief as
provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Originator pursuant to this Agreement to be appropriately identified in
the Seller's computer system and/or books and records, as appropriate, to
clearly reflect the sale of the related Mortgage Loan to the Purchaser. The
Seller shall cause the Originator to release from its custody the contents of
any Servicing File retained by it only in accordance with this Agreement or
the Servicing Agreement, except when such release is required in connection
with a repurchase of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall
be possessed solely by the Purchaser or the appropriate designee of the
Purchaser, as the case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Seller or the
Originator after the related Cut-off Date on or in connection with a Mortgage
Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with
a Mortgage Loan shall be received and held by the Seller or the Originator in
trust for the benefit of the Purchaser or the appropriate designee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to
the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the
Seller.
The Seller shall or shall cause the Originator to be responsible
for maintaining, and shall maintain, a complete set of books and records for
each Mortgage Loan which shall be marked clearly to reflect the ownership of
each Mortgage Loan by the Purchaser. In particular, the Seller shall or shall
cause the Originator to maintain in its possession, available for inspection
by the Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection
-17-
reports, as required by the Xxxxxx Mae Guides. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Seller or Originator may be
in the form of microfilm or microfiche so long as the Seller or Originator
complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later
than three (3) Business Days prior to the related Closing Date those Mortgage
Loan Documents set forth on Exhibit A hereto as required by the Custodial
Agreement with respect to each Mortgage Loan set forth on the related Mortgage
Loan Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the
Custodian in the form annexed to the Custodial Agreement. The Seller shall
comply with the terms of the Custodial Agreement and the Purchaser shall pay
all fees and expenses of the Custodian.
The Seller shall or shall cause the Originator to forward to the
Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance
with this Agreement within two weeks of their execution, provided, however,
that the Seller shall provide the Custodian, or to such other Person as the
Purchaser shall designate in writing, with a certified true copy of any such
document submitted for recordation within two weeks of its execution, and
shall promptly provide the original of any document submitted for recordation
or a copy of such document certified by the appropriate public recording
office to be a true and complete copy of the original within ninety days of
its submission for recordation.
In the event any document required to be delivered to the
Custodian in the Custodial Agreement, including an original or copy of any
document submitted for recordation to the appropriate public recording office,
is not so delivered to the Custodian, or to such other Person as the Purchaser
shall designate in writing, within 90 days following the related Closing Date
(other than with respect to the Assignments of Mortgage which shall be
delivered to the Custodian in blank and recorded subsequently by the Purchaser
or its designee), and in the event that the Seller does not cure such failure
within 30 days of discovery or receipt of written notification of such failure
from the Purchaser, the related Mortgage Loan shall, upon the request of the
Purchaser, be repurchased by the Seller at the price and in the manner
specified in Subsection 9.03. The foregoing repurchase obligation shall not
apply in the event that the Seller cannot deliver an original document
submitted for recordation to the appropriate public recording office within
the specified period due to a delay caused by the recording office in the
applicable jurisdiction; provided that the Seller shall instead deliver a
recording receipt of such recording office or, if such recording receipt is
not available, an officer's certificate of a servicing officer of the Seller,
confirming that such documents have been accepted for recording; provided
that, upon request of the Purchaser and delivery by the Purchaser to the
Seller of a schedule of the related Mortgage Loans, the Seller shall reissue
and deliver to the Purchaser or its designee said officer's certificate.
-18-
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all
original documents to the Custodian or, upon written request of the Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's
designee shall be responsible for recording the Assignments of Mortgage and
shall be reimbursed by the Seller for the costs associated therewith pursuant
to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Originator to, have an
internal quality control program that verifies, on a regular basis, the
existence and accuracy of the legal documents, credit documents, property
appraisals, and underwriting decisions. The program shall include evaluating
and monitoring the overall quality of the Originator's loan production and the
servicing activities of the Originator. The program is to ensure that the
Mortgage Loans are originated and serviced in accordance with Accepted
Servicing Standards and the Underwriting Guidelines; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser
on a servicing released basis. Subject to, and upon the terms and conditions
of this Agreement and the Servicing Agreement (with respect to each Mortgage
Loan, for an interim period, as specified therein), the Seller hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights. The Purchaser shall retain the Originator as independent contract
servicer of the Mortgage Loans pursuant to and in accordance with the terms
and conditions contained in the Servicing Agreement. Pursuant to the Servicing
Agreement, the Originator shall begin servicing the Mortgage Loans on behalf
of the Purchaser and shall be entitled to the Servicing Fee and any Ancillary
Income with respect to such Mortgage Loans from the related Closing Date until
the termination of the Servicing Agreement with respect to any of the Mortgage
Loans as set forth in the Servicing Agreement. The Seller shall cause the
Originator to service the Mortgage Loans in accordance with the terms of the
Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Originator to cease all servicing responsibilities related to the
related Mortgage Loans subject to such Transfer Date. The Transfer Date shall
be the date determined in accordance with Section 6.03 of the Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
On or prior to the applicable Transfer Date, the Seller shall
cause the Originator shall, at its sole cost and expense, take such steps as
may be necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall cause the Originator to
mail to the Mortgagor of each related Mortgage Loan a letter advising such
Mortgagor of the transfer of the
-19-
servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall cause the Originator to provide
the Purchaser with copies of all such related notices no later than the
Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The
Seller shall cause the Originator to transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance
policy insurers, if applicable) and/or agents, notification of the transfer of
the servicing to the Purchaser, or its designee, and instructions to deliver
all notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the related Transfer Date. The Seller shall cause the
Originator to provide the Purchaser with copies of all such notices no later
than such Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Originator to forward to the Purchaser, or its designee, all servicing records
and the Servicing File in the Originator's possession relating to each related
Mortgage Loan including the information enumerated in the Servicing Agreement
(with respect to each such Mortgage Loan, for an interim period, as specified
therein).
(d) Escrow Payments. The Seller shall cause the Originator to
provide the Purchaser, or its designee, with immediately available funds by
wire transfer in the amount of the net Escrow Payments and suspense balances
and all loss draft balances associated with the related Mortgage Loans. The
Seller shall cause the Originator to provide the Purchaser with an accounting
statement of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment
with the accounts of the Mortgage Loans. Additionally, the Seller shall cause
the Originator to wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held
by the Originator.
(e) Payoffs and Assumptions. The Seller shall cause the Originator
to provide to the Purchaser, or its designee, copies of all assumption and
payoff statements generated by the Originator on the related Mortgage Loans
from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to
the Transfer Date all payments received by the Originator on each related
Mortgage Loan shall be properly applied by the Originator to the account of
the particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The Seller
shall cause the amount of any related Monthly Payments received by the
Originator after the Transfer Date to be forwarded to the Purchaser by
overnight mail on the date of receipt. The Seller shall cause the Originator
to notify the Purchaser of the particulars of the payment, which notification
requirement shall be satisfied if the Originator forwards with its payment
sufficient information to permit appropriate processing of the payment by the
Purchaser. The Seller shall cause the Originator to assume full responsibility
for the necessary and appropriate legal application of such Monthly Payments
received by the Originator after the Transfer Date with respect to related
Mortgage Loans then in foreclosure or bankruptcy; provided, for purposes of
this Agreement,
-20-
necessary and appropriate legal application of such Monthly Payments shall
include, but not be limited to, endorsement of a Monthly Payment to the
Purchaser with the particulars of the payment such as the account number,
dollar amount, date received and any special Mortgagor application
instructions and the Seller shall comply with the foregoing requirements with
respect to all Monthly Payments received by the it after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered
after such Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account,
the Seller shall or the Seller shall cause the Originator to be
liable for the amount of such shortage. The Seller shall or the
Seller shall cause the Originator to reimburse the Purchaser for
the amount of such shortage within thirty (30) days after receipt
of written demand therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section
8(h) shall be accompanied by a statement indicating the
corresponding Seller and/or the Purchaser Mortgage Loan
identification number and an explanation of the allocation of any
such payments.
(i) Books and Records. On the Transfer Date, the books, records
and accounts of the Originator with respect to the related Mortgage Loans
shall be in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall or shall cause the Originator
to, on or before the Transfer Date, reconcile principal balances and make any
monetary adjustments required by the Purchaser. Any such monetary adjustments
will be transferred between the Seller, the Originator and the Purchaser as
appropriate.
(k) IRS Forms. The Seller shall or shall cause the Originator to
file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and
ownership of the related Mortgage Loans. The Seller or Originator shall
provide copies of such forms to the Purchaser upon request and shall
-21-
reimburse the Purchaser for any costs or penalties incurred by the Purchaser
due to the Seller's or Originator's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the
Seller; Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser
that as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
state of California and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in each
state wherein it owns or leases any material properties or where a Mortgaged
Property is located, if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Seller, and in any event the Seller is in compliance with the laws of any such
state to the extent necessary to ensure the enforceability of the related
Mortgage Loan and the servicing of such Mortgage Loan in accordance with the
terms of this Agreement and the Servicing Agreement; the Seller has the full
corporate power, authority and legal right to hold, transfer and convey the
Mortgage Loans and to execute and deliver this Agreement and to perform its
obligations hereunder and thereunder; the execution, delivery and performance
of this Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Seller and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been
duly executed and delivered and constitute the valid, legal, binding and
enforceable obligations of the Seller, regardless of whether such enforcement
is sought in a proceeding in equity or at law; and all requisite corporate
action has been taken by the Seller to make this Agreement and all agreements
contemplated hereby valid and binding upon the Seller in accordance with their
terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Seller's charter or by laws or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which the Seller or its property is subject, or result in the
creation or imposition of any lien, charge or encumbrance that would have an
adverse effect upon any of its properties pursuant to
-22-
the terms of any mortgage, contract, deed of trust or other instrument, or
impair the ability of the Purchaser to realize on the Mortgage Loans, impair
the value of the Mortgage Loans, or impair the ability of the Purchaser to
realize the full amount of any insurance benefits accruing pursuant to this
Agreement;
(d) Ability to Service. Originator has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans
of the same type as the Mortgage Loans. The Originator is duly qualified,
licensed, registered and otherwise authorized under all applicable federal,
state and local laws, and regulations, if applicable, meets the minimum
capital requirements set forth by HUD, the OTS, the OCC or the FDIC, if
applicable, and is in good standing to enforce, originate, sell mortgage loans
to, and service mortgage loans in each jurisdiction wherein the Mortgaged
Properties are located;
(e) Reasonable Servicing Fee. The Originator acknowledges and
agrees that the Servicing Fee, represents reasonable compensation for
performing such services and that the entire Servicing Fee shall be treated by
the Originator, for accounting and tax purposes, as compensation for the
servicing and administration of the Mortgage Loans pursuant to this Agreement
and the Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale
of the Mortgage Loans is not undertaken with the intent to hinder, delay or
defraud any of Seller's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or
governmental agency or body including HUD, the FHA or the Department of
Veterans Affairs is required for the execution, delivery and performance by
the Seller of or compliance by the Seller with this Agreement or the Mortgage
Loans, the delivery of a portion of the Mortgage Files to the Custodian or the
sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement, or if required, such approval has been
obtained prior to the related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio
at the related Closing
-23-
Date as to which the representations and warranties set forth in Subsection
9.02 could be made and such selection was not made in a manner so as to affect
adversely the interests of the Purchaser;
(j) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
with respect to each Mortgage Loan pursuant to the Custodial Agreement, shall
be delivered to the Custodian all in compliance with the specific requirements
of the Custodial Agreement. With respect to each Mortgage Loan, the Seller
will be in possession of a complete Mortgage File in compliance with Exhibit A
hereto, except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to
each related Assignment and Conveyance Agreement;
(l) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby
(including any Securitization Transaction or Whole Loan Transfer) contains or
will contain any untrue statement of fact or omits or will omit to state a
fact necessary to make the statements contained herein or therein not
misleading;
(m) Financial Statements. The Seller has delivered to the
Purchaser financial statements as to its last three complete fiscal years and
any later quarter ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent results
of operations and changes in financial position for each of such periods and
the financial position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has
delivered information as to its loan gain and loss experience in respect of
foreclosures and its loan delinquency experience for the immediately preceding
three-year period, in each case with respect to mortgage loans owned by it and
such mortgage loans serviced for others during such period, and all such
information so delivered shall be true and correct in all material respects.
There has been no change in the business, operations, financial condition,
properties or assets of the Seller since the date of the Seller's financial
statements that would have a material adverse effect on its ability to perform
its obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(n) No Brokers. The Seller has not dealt with any broker,
investment banker, agent or other person that may be entitled to any
commission or compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the
-24-
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon
recordation the Seller will be the owner of record of each Mortgage and the
indebtedness evidenced by each Mortgage Note, and upon the sale of the
Mortgage Loans to the Purchaser, the Seller will retain the Mortgage Files
with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan;
(q) Origination. The Originator's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Originator's Underwriting Guidelines, and is in no way
made as a result of Purchaser's decision to purchase, or not to purchase, or
the price Purchaser may offer to pay for, any such mortgage loan, if
originated;
(r) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including, without limitation, the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); and
(s) Credit Reporting. The Seller shall cause the Originator, as
servicer, to fully furnish, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis. Additionally, the Seller shall cause the Originator, as
servicer, to transmit full-file credit reporting data for each Mortgage Loan
pursuant to Xxxxxx Mae Guide Announcement 95-19 and that for each Mortgage
Loan, the Seller shall cause the Originator, as servicer, to report one of the
following statuses each month as follows: new origination, current, delinquent
(30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that,
as to each Mortgage Loan, as of the related Closing Date for such Mortgage
Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note, other than payments not yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or more
delinquent at any time since the origination of the Mortgage Loan. The first
Monthly Payment shall be made with respect to the Mortgage Loan on its related
Due Date or within the grace period, all in accordance with the terms of the
related Mortgage Note;
-25-
(c) No Outstanding Charges. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or an
escrow of funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is not yet due
and payable. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is earlier,
to the day which precedes by one month the related Due Date of the first
installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the
related Mortgage Loan Schedule. The substance of any such waiver, alteration
or modification has been approved by the issuer of any related PMI Policy and
the title insurer, if any, to the extent required by the policy, and its terms
are reflected on the related Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of any related PMI Policy and the
issuer of the title insurer, to the extent required by the policy, and which
assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part and no
such right of rescission, set-off, counterclaim or defense has been asserted
with respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Xxxxxx Xxx Guides
or by Xxxxxxx Mac, as well as all additional requirements set forth in Section
2.10 of the Servicing Agreement. If required by the National Flood Insurance
Act of 1968, as amended, each Mortgage Loan is covered by a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration is in effect which policy conforms to Xxxxxx Xxx and
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10
of the Servicing Agreement. All individual insurance policies contain a
standard mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such
-26-
insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. Where required by state law or regulation, the
Mortgagor has been given an opportunity to choose the carrier of the required
hazard insurance, provided the policy is not a "master" or "blanket" hazard
insurance policy covering a condominium, or any hazard insurance policy
covering the common facilities of a planned unit development. The hazard
insurance policy is the valid and binding obligation of the insurer, is in
full force and effect, and will be in full force and effect and inure to the
benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and abusive
lending laws applicable to the Mortgage Loan, including, without limitation,
any provisions relating to the Illinois Interest Act and prepayment penalties,
have been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission. The Seller has not
waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or inaction by
the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged
Property is located in the state identified in the Mortgage Loan Schedule and
consists of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium unit
in a low-rise condominium project, or an individual unit in a planned unit
development or a de minimis planned unit development which is in each case
four stories or less, provided, however, that any mobile home (double wide
only) or manufactured dwelling shall conform with the applicable Xxxxxx Mae
and Xxxxxxx Mac requirements regarding such dwellings and that no Mortgage
Loan is secured by a single parcel of real property with a cooperative housing
corporation, a log home or, except as described in Exhibit B to the related
Assignment and Conveyance Agreement, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be
-27-
considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner
repair, maintenance and/or household purposes. In the case of a Manufactured
Home, (i) the related manufactured dwelling and the related land are subject
to a Mortgage properly filed in the appropriate public recording office and
naming Seller as mortgagee, (ii) the applicable laws of the jurisdiction in
which the related Mortgaged Property is located will deem the manufactured
dwelling located on such Mortgaged Property to be a part of the real property
on which such dwelling is located, and (iii) such Manufactured Home Mortgage
Loan is (x) a qualified mortgage under Section 860G(a)(3) of the Internal
Revenue Code of 1986, as amended and (y) secured by manufactured housing
treated as a single family residence under Section 25(e)(10) of the Code;
(j) Valid First or Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first lien (with respect to a First
Lien Loan) or a second lien (with respect to a Second Lien Loan) on the
Mortgaged Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating
and air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(1) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B)
which do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected first lien (with respect to a
First Lien Loan) or second lien (with respect to a Second Lien Loan) and first
priority (with respect to a First Lien Loan) or second priority (with respect
to a Second Lien Loan) security interest on the property described therein and
the Seller has full right to sell and assign the same to the Purchaser.;
-28-
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms (including, without limitation, any provisions therein relating to
prepayment penalties). All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related parties.
No fraud, error, omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of any Person,
including without limitation, the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the Mortgage
Loan. The Seller has reviewed all of the documents constituting the Servicing
File and has made such inquiries as it deems necessary to make and confirm the
accuracy of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder
of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and
upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files or any part thereof with respect thereto not delivered to
the Custodian, the Purchaser or the Purchaser's designee, in trust only for
the purpose of servicing and supervising the servicing of each Mortgage Loan.
The Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as provided in
this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1)
in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2) either (i)
organized under the laws of such state, or (ii) qualified to do business in
such state, or (iii) a federal savings and loan association, a savings bank or
a national bank having a principal office in such state, or (3) not doing
business in such state;
-29-
(o) CLTV; LTV and PMI Policy. No Mortgage Loan that is a Second
Lien Loan has a CLTV greater than 100% and no Mortgage Loan has an LTV greater
than 100%. Any Mortgage Loan that had at the time of origination an LTV in
excess of 80% is insured as to payment defaults by a PMI Policy. Any PMI
Policy in effect covers the related Mortgage Loan for the life of such
Mortgage Loan. All provisions of such PMI Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. No action, inaction, or event has occurred and no
state of facts exists that has, or will result in the exclusion from, denial
of, or defense to coverage. Any Mortgage Loan subject to a PMI Policy
obligates the Mortgagor thereunder to maintain the PMI Policy and to pay all
premiums and charges in connection therewith. The Mortgage Interest Rate for
the Mortgage Loan as set forth on the related Mortgage Loan Schedule is net of
any such insurance premium if the related PMI Policy is lender-paid;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA lender's
title insurance policy, or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title
insurance policy is issued by a title insurer acceptable to Xxxxxx Mae or
Xxxxxxx Mac and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first (with respect to a First Lien Loan) or second (with
respect to a Second Lien Loan) priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (or to the extent a Mortgage Note
provides for negative amortization, the maximum amount of negative
amortization in accordance with the Mortgage), subject only to the exceptions
contained in clauses (1), (2) and (3) of Paragraph (j) of this Subsection
9.02, and in the case of Adjustable Rate Mortgage Loans, against any loss by
reason of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and
such lender's title insurance policy is valid and remains in full force and
effect and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or
more delinquent, there is no default, breach, violation or event which would
permit acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event
which would permit acceleration, and neither the Seller nor any of its
affiliates
-30-
nor any of their respective predecessors, have waived any default, breach,
violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens
or claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining properties encroach
upon the Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and
examined by a federal or state authority, or (b) the following requirements
have been met with respect to the Mortgage Loan: the Seller meets the
requirements set forth in clause (a), and (i) such Mortgage Loan was
underwritten in accordance with standards established by the Seller, using
application forms and related credit documents approved by the Seller, (ii)
the Seller approved each application and the related credit documents before a
commitment by the correspondent was issued, and no such commitment was issued
until the Seller agreed to fund such Mortgage Loan, (iii) the closing
documents for such Mortgage Loan were prepared on forms approved by the
Seller, and (iv) such Mortgage Loan was actually funded by the Seller and was
purchased by the Seller at closing or soon thereafter. The documents,
instruments and agreements submitted for loan underwriting were not falsified
and contain no untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate as well as, with respect to
Adjustable Rate Mortgage loans, the Lifetime Rate Cap and the Periodic Cap,
are as set forth on the related Mortgage Loan Schedule. The Mortgage Note is
payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the related Mortgage Loan
Schedule, the Mortgage Loan is payable on the first day of each month. There
are no Convertible Mortgage Loans which contain a provision allowing the
Mortgagor to convert the Mortgage Note from an adjustable interest rate
Mortgage Note to a fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the
-31-
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (i) in the case of a Mortgage designated as a
deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure.
Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or
trustee's sale of, the Mortgaged Property pursuant to the proper procedures,
the holder of the Mortgage Loan will be able to deliver good and merchantable
title to the Mortgaged Property. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or
Xxxxxx Mae and neither the Seller nor the Originator has made any
representations to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been made
or obtained from the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in Paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed
of trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable by
the Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, the Mortgage File or the Mortgagor's credit standing that can
reasonably be expected to cause private institutional investors who invest in
prime mortgage loans similar to the Mortgage Loan to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent,
or adversely affect the value or marketability of the Mortgage Loan, or cause
the Mortgage Loans to prepay during any period materially faster or slower
than the mortgage loans originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true
and accurate Mortgage File in compliance with Exhibit A hereto, except for
such documents the originals of which have been delivered to the Custodian;
-32-
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the
Mortgaged Property meets the guidelines set forth in the Originator's
Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property
is located. The transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan,
the Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or transferred without the prior written
consent of the mortgagee thereunder, and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed if
the party assuming such Mortgage Loan meets certain credit requirements stated
in the Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien
Loan) or a second (with respect to a Second Lien Loan) lien priority by a
title insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings
-33-
with respect to the Mortgaged Property and the Seller has no knowledge of any
such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Originator with respect to the Mortgage Loan have been in all
respects in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession
of, or under the control of, the Seller or the Originator and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected
in full compliance with state and federal law and the provisions of the
related Mortgage Note and Mortgage. An escrow of funds is not prohibited by
applicable law and has been established in an amount sufficient to pay for
every item that remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges or payments
due the Seller have been capitalized under the Mortgage or the Mortgage Note.
All Mortgage Interest Rate adjustments have been made in strict compliance
with state and federal law and the terms of the related Mortgage and Mortgage
Note on the related Interest Rate Adjustment Date. If, pursuant to the terms
of the Mortgage Note, another index was selected for determining the Mortgage
Interest Rate, the same index was used with respect to each Mortgage Note
which required a new index to be selected, and such selection did not conflict
with the terms of the related Mortgage Note. The Seller or the Originator
executed and delivered any and all notices required under applicable law and
the terms of the related Mortgage Note and Mortgage regarding the Mortgage
Interest Rate and the Monthly Payment adjustments. Any interest required to be
paid pursuant to state, federal and local law has been properly paid and
credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective
of the cause of such failure of coverage. In connection with the placement of
any such insurance, no commission, fee, or other compensation has been or will
be received by the Seller or by any officer, director, or employee of the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending
action or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue; there
is no violation of any environmental law, rule or regulation with respect to
the Mortgage Property; and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
-34-
(mm) Servicemembers Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested
or allowed to the Mortgagor under the Servicemembers Civil Relief Act or any
similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
Originator, who had no interest, direct or indirect in the Mortgaged Property
or in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx
Mac and Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement
to the effect that the Mortgagor has received all disclosure materials
required by, and the Originator has complied with, all applicable law with
respect to the making of the Mortgage Loans. The Seller shall cause the
Originator to maintain such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation
of a Mortgaged Property or facilitating the trade-in or exchange of a
Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of
any circumstances existing that could reasonably be expected to adversely
affect the value or the marketability of any Mortgaged Property or Mortgage
Loan or to cause the Mortgage Loans to prepay during any period materially
faster or slower than similar mortgage loans held by the Seller generally
secured by properties in the same geographic area as the related Mortgaged
Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising
out of actions, representations, errors, omissions, negligence, or fraud of
the Seller, the related Mortgagor or any party involved in the application for
such coverage, including the appraisal, plans and specifications and other
exhibits or documents submitted therewith to the insurer under such insurance
policy, or for any other reason under such coverage, but not including the
failure of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or
the Originator has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any
-35-
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan
and allows such mortgagee to cure any default under the related first lien
Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from
furnishing the same to any subsequent or prospective purchaser of such
Mortgage. The Seller shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's secondary
marketing operations and the purchase and sale of mortgages or Servicing
Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest
in the land; (2) the terms of such lease expressly permit the mortgaging of
the leasehold estate, the assignment of the lease without the lessor's consent
and the acquisition by the holder of the Mortgage of the rights of the lessee
upon foreclosure or assignment in lieu of foreclosure or provide the holder of
the Mortgage with substantially similar protections; (3) the terms of such
lease do not (a) allow the termination thereof upon the lessee's default
without the holder of the Mortgage being entitled to receive written notice
of, and opportunity to cure, such default, (b) allow the termination of the
lease in the event of damage or destruction as long as the Mortgage is in
existence, (c) prohibit the holder of the Mortgage from being insured (or
receiving proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent other
than pre-established increases set forth in the lease; (4) the original term
of such lease is not less than 15 years; (5) the term of such lease does not
terminate earlier than five years after the maturity date of the Mortgage
Note; and (6) the Mortgaged Property is located in a jurisdiction in which the
use of leasehold estates in transferring ownership in residential properties
is a widely accepted practice;
-36-
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified on
the related Mortgage Loan Schedule. With respect to Mortgage Loans originated
prior to October 1, 2002, no such Prepayment Penalty may be imposed for a term
in excess of five (5) years following origination. With respect to Mortgage
Loans originated on or after October 1, 2002, no such Prepayment Penalty may
be imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High
Cost Loan or Covered Loan, as applicable. No Mortgage Loan is covered by the
Home Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in
violation of any comparable state or local law. The Mortgaged Property is not
located in a jurisdiction where a breach of this representation with respect
to the related Mortgage Loan may result in additional assignee liability to
the Purchaser, as determined by Purchaser in its reasonable discretion;
(bbb) Single-premium credit life insurance policy. No Mortgagor
was required to purchase any single premium credit insurance policy (e.g.,
life, disability, property, accident, unemployment or health insurance
product) or debt cancellation agreement as a condition of obtaining the
extension of credit. No Mortgagor obtained a prepaid single-premium credit
insurance policy (e.g., life, disability, property, accident, unemployment,
mortgage or health insurance) in connection with the origination of the
Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(ddd) [Reserved];
(eee) Fair Credit Reporting Act. The Seller has, in its capacity
as servicer for each Mortgage Loan, fully furnished, in accordance with the
Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three
of the credit repositories), on a monthly basis;
(fff) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of Xxxxxx Mae Guides;
(ggg) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt to income ratios for a lower cost credit
product then offered by the Originator or any Affiliate of the Originator. If,
at the time of loan application, the Mortgagor may have qualified for a lower
cost credit product then offered by any mortgage lending Affiliate of the
Originator, the Originator referred the related Mortgagor's application to
such Affiliate for underwriting consideration;
-37-
(hhh) Underwriting Methodology. The methodology used in
underwriting the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income, assets
and liabilities to the proposed payment and such underwriting methodology does
not rely on the extent of the related Mortgagor's equity in the collateral as
the principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the related Mortgagor had a reasonable ability to make
timely payments on the Mortgage Loan;
(iii) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for a
monetary benefit, including but not limited to a rate or fee reduction, (ii)
prior to the Mortgage Loan's origination, the related Mortgagor was offered
the option of obtaining a mortgage loan that did not require payment of such a
premium, (iii) the prepayment premium is disclosed to the related Mortgagor in
the Mortgage Loan documents pursuant to applicable state and federal law, and
(iv) notwithstanding any state or federal law to the contrary, the Originator,
as servicer, shall not impose such prepayment premium in any instance when the
mortgage debt is accelerated as the result of the related Mortgagor's default
in making the Mortgage Loan payments;
(jjj) [Reserved];
(kkk) Points and Fees. All points and fees related to each
Mortgage Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. Except in the case of a
Mortgage Loan in an original principal amount of less than $60,000 which would
have resulted in an unprofitable origination, no Mortgagor was charged "points
and fees" (whether or not financed) in an amount greater than 5% of the
principal amount of such Mortgage Loan, such 5% limitation is calculated in
accordance with Xxxxxx Mae's anti-predatory lending requirements as set forth
in the Xxxxxx Mae Guides;
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or
to be collected in connection with the origination and servicing of each
Mortgage Loan, have been disclosed in writing to the Mortgagor in accordance
with applicable state and federal law and regulation;
(mmm) No Arbitration. No Mortgagor with respect to any Mortgage
Loan originated on or after August 1, 2004 agreed to submit to arbitration to
resolve any dispute arising out of or relating in any way to the mortgage loan
transaction;
(nnn) Flood Service Contract. Each Mortgage Loan is covered by a
paid in full, life of loan, flood service contract issued by either First
American Flood Data Services or Fidelity, and such contract is transferable.
If no such flood service contract is in place, or if such flood service
contract is issued by an insurer other than First American Flood Data Services
or Fidelity, then on the related Closing Date, the Seller shall remit to the
Purchaser a placement fee of ten dollars ($10.00) for each such Mortgage Loan;
-38-
(ooo) Negative Amortization. Unless otherwise disclosed in the
Mortgage Loan Schedule, no Mortgage Loan is subject to negative amortization;
(ppp) No Negative Amortization of Related First Lien Loan. With
respect to each Second Lien Loan, the related first lien loan does not permit
negative amortization;
(qqq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified such senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by such senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien loan or (b) such
consent has been obtained and is contained in the related Mortgage File; and
(rrr) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a
receiver being appointed in respect of the related Mortgaged Property.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and
warranties set forth in Subsections 9.01 and 9.02 shall survive the sale of
the Mortgage Loans to the Purchaser and shall inure to the benefit of the
Purchaser, notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or Assignment of Mortgage or the examination or failure to
examine any Mortgage File. Upon discovery by either the Seller or the
Purchaser of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the
other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which
materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser therein (or which materially and adversely affects
the value of the applicable Mortgage Loan or the interest of the Purchaser
therein in the case of a representation and warranty relating to a particular
Mortgage Loan), the Seller shall use its best efforts promptly to cure such
breach in all material respects and, if such breach cannot be cured, the
Seller shall, at the Purchaser's option, repurchase such Mortgage Loan at the
Repurchase Price. Notwithstanding the above sentence, within 60 days of the
earlier of either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in Paragraph (zz), (aaa), (bbb),
(ccc), (eee), (fff), (ggg), (hhh), (iii), (kkk), (lll) and (mmm) of Subsection
9.02, the Seller shall repurchase such Mortgage Loan at the Repurchase Price.
In the event that a breach shall involve any representation or warranty set
forth in Subsection 9.01, and such breach cannot be cured within 60 days of
the earlier of either discovery by or notice to the Seller of such breach, all
of the Mortgage Loans affected by such breach shall, at the Purchaser's
option, be repurchased by the Seller at the Repurchase Price. However, if the
breach shall involve a representation or warranty set forth in Subsection 9.02
(except as provided in the
-39-
second sentence of this paragraph with respect to certain breaches for which
no substitution is permitted) and the Seller discovers or receives notice of
any such breach within 120 days of the related Closing Date, the Seller shall,
at the Purchaser's option and provided that the Seller has a Qualified
Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as provided
above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in
its place a Qualified Substitute Mortgage Loan or Loans, provided that any
such substitution shall be effected not later than 120 days after the related
Closing Date. If the Seller has no Qualified Substitute Mortgage Loan, it
shall repurchase the deficient Mortgage Loan at the Repurchase Price. Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of
this Subsection 9.03 shall be accomplished by either (a) if the Servicing
Agreement has been entered into and is in effect, deposit in the Custodial
Account of the amount of the Repurchase Price for distribution to the
Purchaser on the next scheduled Remittance Date, after deducting therefrom any
amount received in respect of such repurchased Mortgage Loan or Loans and
being held in the Custodial Account for future distribution or (b) if the
Servicing Agreement has not been entered into or is no longer in effect, by
direct remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the
Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the related Mortgage
Loan Schedule to reflect the addition of such Qualified Substitute Mortgage
Loan to this Agreement. In connection with any such substitution, the Seller
shall be deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all
such representations and warranties set forth in this Agreement shall be
deemed made as of the date of such substitution. The Seller shall effect such
substitution by delivering to the Custodian or to such other party as the
Purchaser may designate in writing for such Qualified Substitute Mortgage Loan
the documents required by Subsection 6.03 and the Custodial Agreement, with
the Mortgage Note endorsed as required by Subsection 6.03 and the Custodial
Agreement. No substitution will be made in any calendar month after the
Determination Date for such month. The Seller shall cause the Originator to
remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment less the Servicing Fee due, if
any, on such Qualified Substitute Mortgage Loan or Loans in the month
following the date of such substitution. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by the Seller. For the month of substitution, distributions to the
Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, the Seller shall
determine the amount (if any) by which the aggregate principal balance of all
Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all Deleted Mortgage Loans
-40-
(after application of scheduled principal payments due in the month of
substitution). The amount of such shortfall shall be distributed by the Seller
directly to the Purchaser or its designee in accordance with the Purchaser's
instructions within two (2) Business Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold such
parties harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary 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 Seller
representations and warranties contained in this Agreement or any
Reconstitution Agreement. It is understood and agreed that the obligations of
the Seller set forth in this Subsection 9.03 to cure, substitute for or
repurchase a defective Mortgage Loan and to indemnify the Purchaser and the
Successor Servicer as provided in this Subsection 9.03 constitute the sole
remedies of the Purchaser and the Successor Servicer respecting a breach of
the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out
of the breach of any representations and warranties made in Subsections 9.01
and 9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such
breach by the Purchaser or notice thereof by the Seller to the Purchaser, (ii)
failure by the Seller to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
Subsection 9.04 [RESERVED].
Subsection 9.05 Repurchase of Mortgage Loans With Early Payment
Defaults.
If any Mortgagor is delinquent with respect to any of the related
Mortgage Loan's first three (3) Monthly Payments at any time either (i) after
the origination of such Mortgage Loan, or (ii) after the related Closing Date,
the Seller shall, at the Purchaser's option, repurchase such Mortgage Loan
from the Purchaser at the Repurchase Price within thirty (30) days of request
for repurchase.
Subsection 9.06 Premium Recapture.
With respect to any Mortgage Loan without Prepayment Penalties
that prepays in full during the first six months following the related Closing
Date, and with respect to any Mortgage Loan that is repurchased pursuant to
Subsection 9.05, the Seller shall pay the Purchaser, within three (3) Business
Days after such prepayment in full or repurchase, an amount equal to the
excess of the Purchase Price Percentage for such Mortgage Loan over par,
multiplied by the outstanding principal balance of such Mortgage Loan as of
the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan
Package shall take place on the related Closing Date. At the Purchaser's
option, each Closing shall be either: by telephone, confirmed by letter or
wire as the parties shall agree, or conducted in person, at such place as the
parties shall agree.
-41-
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing
Date, the Seller shall deliver to the Purchaser a magnetic
diskette, or transmit by modem, a listing on a loan-level
basis of the necessary information to compute the Purchase
Price of the Mortgage Loans delivered on such Closing Date
(including accrued interest), and prepare a Mortgage Loan
Schedule;
(ii) all of the representations and warranties of the Seller
under this Agreement and of the Originator under the
Servicing Agreement (with respect to each Mortgage Loan, as
specified therein) shall be true and correct as of the
related Closing Date and no event shall have occurred which,
with notice or the passage of time, would constitute a
default under this Agreement or an Event of Default under
the Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing
documents as specified in Section 11 of this Agreement, in
such forms as are agreed upon and acceptable to the
Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the
Custodian all documents required pursuant to the Custodial
Agreement; and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to
the Seller on the related Closing Date the Purchase Price, plus accrued
interest pursuant to Section 4 of this Agreement, by wire transfer of
immediately available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on
each Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the related Mortgage Loan Schedule (one copy to be attached
to the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
3. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
-42-
4. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
each of the Seller and the Originator, including all
attachments thereto; with respect to subsequent Closing
Dates, an Officer's Certificate upon request of the
Purchaser;
5. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit D hereto ("Opinion of
Counsel of the Seller"); with respect to subsequent Closing
Dates, an Opinion of Counsel of the Seller upon request of
the Purchaser;
6. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
7. a Security Release Certification, in the form of Exhibit E
or F, as applicable, hereto executed by any person, as
requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest,
pledge or hypothecation for the benefit of such person;
8. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present
name, if applicable;
9. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G; and
10. Assignment and Conveyance Agreement in the form of Exhibit H
hereto, and all exhibits thereto.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs
and expenses incurred in connection with the transfer and delivery of the
Mortgage Loans and the Servicing Rights including recording fees, fees for
title policy endorsements and continuations, fees for recording Assignments of
Mortgage, and the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or
all of the Mortgage Loans, after each Closing Date, on one or more dates
(each, a "Reconstitution Date")
-43-
at the Purchaser's sole option, the Purchaser may effect a sale (each a
"Reconstitution") of some or all of the Mortgage Loans then subject to this
Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Mae Transfer");
or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transactions.
The Seller agrees to execute in connection with any Agency
Transfer, any and all pool purchase contracts, and/or agreements reasonably
acceptable to the Seller among the Purchaser, the Seller, Xxxxxx Xxx or
Xxxxxxx Mac (as the case may be) and any servicer in connection with a Whole
Loan Transfer, a seller's warranties and servicing agreement or a
participation and servicing agreement in form and substance reasonably
acceptable to the Seller, and in connection with a Securitization Transaction,
a pooling and servicing agreement in form and substance reasonably acceptable
to the Seller (collectively the agreements referred to herein are designated,
the "Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; and (3) to
restate the representations and warranties set forth in this Agreement and the
Servicing Agreement as of the settlement or closing date in connection with
such Reconstitution that occurs on or prior to the date which is six (6)
months following the related Closing Date and in connection with any
Reconstitution on or after the date which is six (6) months following the
related Closing Date, to restate the representations and warranties set forth
in this Agreement as of the Closing Date (each, a "Reconstitution Date") or
make the representations and warranties set forth in the related
selling/servicing guide of the master servicer or issuer, as the case may be,
in connection with such Reconstitution. The Seller shall use its reasonable
best efforts to provide to such master servicer or issuer, as the case may be,
and any other participants in such Reconstitution: (i) any and all information
and appropriate verification of information which may be reasonably available
to the Seller or its affiliates, whether through letters of its auditors and
counsel or otherwise, as the Purchaser or any such other participant shall
request; (ii) such additional representations, warranties, covenants, opinions
of counsel, letters from auditors, and certificates of public officials or
officers of the Seller or the Originator as are reasonably believed necessary
by the Purchaser or any such other participant; and (iii) to execute, deliver
and satisfy all conditions set forth in any indemnity agreement required by
the Purchaser or any such participant. The Seller shall indemnify the
Purchaser, each Affiliate designated by the Purchaser and each Person who
controls the Purchaser or such Affiliate and hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that
-44-
each of them may sustain in any way related to any information provided by or
on behalf of the Seller or the Originator regarding the Seller, the
Originator, the Seller's and Originator's servicing practices or performance,
the Mortgage Loans or the Underwriting Guidelines set forth in any offering
document prepared in connection with any Reconstitution. For purposes of the
previous sentence, "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement. Moreover, the Seller agrees to cooperate
with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Originator hold record title to the Mortgages, prior to the Reconstitution
Date, the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Originator, as applicable, acceptable to the prospective purchaser or trustee,
as applicable, for each Mortgage Loan that is part of the Reconstitution and
shall pay all preparation and recording costs associated therewith. In
connection with the Reconstitution, the Seller shall execute or shall cause
the Originator to execute each assignment of mortgage, track such Assignments
of Mortgage to ensure they have been recorded and deliver them as required by
the prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute or shall cause the
Originator to execute, at the direction of the Purchaser, any note endorsement
in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Servicing
Agreement shall remain in effect with respect to the related Mortgage Loan
Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Servicing Agreement and with respect thereto this Agreement
shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and the Successor
Servicer and hold such parties harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and related costs, judgments, and any other costs, fees and expenses that such
parties may sustain in any way related to the failure of the Seller to perform
its duties and the Originator to service the Mortgage Loans in strict
compliance with the terms of this Agreement or any Reconstitution Agreement
entered into pursuant to Section 13. The Seller immediately shall notify the
Purchaser if a claim is made by a third party with respect to this Agreement
or any Reconstitution Agreement or the Mortgage Loans, assume (with the prior
written consent of the Purchaser) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it
or the Purchaser in respect of such claim. The Purchaser promptly shall
reimburse the Seller for all amounts advanced by it pursuant to the preceding
sentence, except when the claim is in any way related to the Seller's
indemnification pursuant to Section 9, or is in any way related to the failure
of the Originator or the Seller to service and administer the Mortgage Loans
in strict compliance with the terms of this Agreement or any Reconstitution
Agreement.
-45-
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Seller shall be a party, or any Person succeeding to the business of
the Seller, shall be the successor of the Seller hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person shall have a net worth of at
least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or
the public at large). The Seller, if it has not already done so, agrees to
furnish promptly to the Purchaser copies of the statements specified above.
The Seller shall also make available information on its servicing performance
with respect to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a
knowledgeable financial or accounting officer for the purpose of answering
questions asked by any prospective purchaser regarding recent developments
affecting the Seller or the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i)
each of the related Mortgage Loans or (ii) one or more Qualified Substitute
Mortgage Loans or (iii) one or more Mortgage Loans otherwise acceptable to the
Purchaser on or before the related Closing Date. The Seller hereby grants to
the Purchaser a lien on and a continuing security interest in each Mortgage
Loan and each document and instrument evidencing each such Mortgage Loan to
secure the performance by the Seller of its obligations under the related
Purchase Price and Terms
-46-
Agreement, and the Seller agrees that it shall hold such Mortgage Loans in
custody for the Purchaser subject to the Purchaser's (a) right to reject any
Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms of this
Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the
Purchaser under this Agreement are distinct from, and cumulative with, any
other rights or remedies under this Agreement or afforded by law or equity and
all such rights and remedies may be exercised concurrently, independently or
successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered
or certified mail, return receipt requested, or, if by other means, when
received by the other party at the address as follows:
(i) if to the Seller:
New Century Mortgage Corporation
00000 Xxx Xxxxxx, Xxxxx
0000 Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx - Whole Loan Operations Manager
Fax: 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law
which prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall
-47-
negotiate, in good-faith, to develop a structure the economic effect of which
is nearly as possible the same as the economic effect of this Agreement
without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement
shall be construed in accordance with the laws of the State of New York and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with the substantive laws of the State of New York
(without regard to conflicts of laws principles), except to the extent
preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is
purchasing, and the Seller is selling the Mortgage Loans and not a debt
instrument of the Seller or another security. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
Moreover, the arrangement under which the Mortgage Loans are held shall be
consistent with classification of such arrangement as a grantor trust in the
event it is not found to represent direct ownership of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans
which shall affect the Federal income tax consequences of owning the Mortgage
Loans and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by
the Seller to a third party without the consent of the Purchaser. This
Agreement may be assigned, pledged or hypothecated by the Purchaser without
the consent of the Seller. In the event the Purchaser assigns this Agreement,
and the assignee assumes any of the Purchaser's obligations hereunder, the
Seller acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser
shall be relieved from any liability to the Seller with respect thereto.
-48-
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any
-49-
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for
real property records in all the counties or their comparable jurisdictions in
which any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of
its agents or affiliates, or by any independent contractors on the Seller's
behalf, to personally, by telephone or mail, solicit the borrower or obligor
under any Mortgage Loan for any purpose whatsoever, including to refinance a
Mortgage Loan, in whole or in part, without (i) the prior written consent of
the Purchaser; or (ii) written notice from the related borrower or obligor
under a Mortgage Loan of such party's intention to refinance such Mortgage
Loan. It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors and the attendant rights, title and interest in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the related Closing Date and the Seller shall take no
action to undermine these rights and benefits. Notwithstanding the foregoing,
it is understood and agreed that promotions undertaken by the Seller or any
affiliate of the Seller which are directed to the general public at large,
including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
-50-
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF
ANY JUDGMENT IN RESPECT THEREOF, TO THE NON EXCLUSIVE GENERAL JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM
ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,
TO ITS ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE
PURCHASER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO XXX IN ANY OTHER JURISDICTION.
SECTION 32. Compliance With Regulation AB.
Subsection 32.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the
purpose of Section 32 of this Agreement is to facilitate compliance by the
Purchaser and any Depositor with the provisions of Regulation AB and related
rules and regulations of the Commission. Neither the Purchaser nor any
Depositor shall exercise its right to request delivery of information or other
performance under these provisions other than in good faith, or for purposes
other than compliance with the Securities Act, the Exchange Act and the rules
and regulations of the Commission thereunder. The Seller acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the
Purchaser or any Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate
fully with the Purchaser to deliver to the Purchaser (including any of its
assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any
-51-
Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Seller, any Third-Party Originator and the Mortgage Loans, or the servicing of
the Mortgage Loans, reasonably believed by the Purchaser or any Depositor to
be necessary in order to effect such compliance.
Subsection 32.02 Additional Representations and Warranties of the
Seller.
(a) The Seller shall be deemed to represent to the Purchaser and
to any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 32.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller
is not aware and has not received notice that any default, early amortization
or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Seller; (ii) the
Interim Servicer has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (iii) no material noncompliance with
the applicable servicing criteria with respect to other securitizations of
residential mortgage loans involving the Interim Servicer as servicer has been
disclosed or reported by the Seller; (iv) no material changes to the Interim
Servicer's policies or procedures with respect to the servicing function it
will perform under the Interim Servicing Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Interim Servicer's
financial condition that could have a material adverse effect on the
performance by the Interim Servicer of its servicing obligations under the
Interim Servicing Agreement or any Reconstitution Agreement; (vi) there are no
material legal or governmental proceedings pending (or known to be
contemplated) against the Seller, Interim Servicer, any Subservicer or any
Third-Party Originator; and (vii) there are no affiliations, relationships or
transactions relating to the Seller, Interim Servicer, any Subservicer or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 32.03, the Seller shall, within five Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or,
if any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 32.03 Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall
(i) within five Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable,
cause each Third-Party Originator to provide), in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor, the
information and materials specified in paragraphs (a) and (b) of this Section,
and (ii) as promptly as practicable following notice to or discovery by the
Seller, provide to the Purchaser and any Depositor (in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (d) of this Section.
-52-
(a) If so requested by the Purchaser or any Depositor, the Seller
shall provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for the
purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program
and how long the originator has been engaged in originating
residential mortgage loans, which description shall include a
discussion of the originator's experience in originating mortgage
loans of a similar type as the Mortgage Loans; information
regarding the size and composition of the originator's origination
portfolio; and information that may be material, in the good faith
judgment of the Purchaser or any Depositor, to an analysis of the
performance of the Mortgage Loans, including the originators'
credit-granting or underwriting criteria for mortgage loans of
similar type(s) as the Mortgage Loans and such other information
as the Purchaser or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the
Seller and each Third-Party Originator; and
(D) a description of any affiliation or relationship between
the Seller, each Third-Party Originator and any of the following
parties to a Securitization Transaction, as such parties are
identified to the Seller by the Purchaser or any Depositor in
writing in advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to
provide) Static Pool Information with respect to the mortgage loans (of a
similar type as the Mortgage Loans, as reasonably identified by the Purchaser
as provided below) originated by (i) the Seller, if the Seller is an
originator of Mortgage Loans (including as an acquirer of Mortgage Loans from
a Qualified Correspondent), and/or (ii) each Third-Party Originator. Such
Static Pool Information shall be prepared in form and substance reasonably
satisfactory to the Purchaser by the Seller (or Third-Party Originator) on the
basis of its reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB. To the extent that there is reasonably
available to the Seller (or Third-Party Originator) Static Pool Information
with respect to more than one mortgage loan type, the
-53-
Purchaser or any Depositor shall be entitled to specify whether some or all of
such information shall be provided pursuant to this paragraph. Such Static
Pool Information for each vintage origination year or prior securitized pool,
as applicable, shall be presented in increments no less frequently than
quarterly over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The most recent periodic increment
must be as of a date no later than 135 days prior to the date of the
prospectus or other offering document in which the Static Pool Information is
to be included or incorporated by reference. The Static Pool Information shall
be provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor,
as applicable.
If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to
provide), at the expense of the requesting party (to the extent of any
additional incremental expense associated with delivery pursuant to this
Agreement), such agreed-upon procedures letters of certified public
accountants reasonably acceptable to the Purchaser or Depositor, as
applicable, pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1, 2006 or,
in the case of Static Pool Information with respect to the Seller's or
Third-Party Originator's originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be
for the benefit of such parties as the Purchaser or such Depositor shall
designate, which may include, by way of example, any Sponsor, any Depositor
and any broker dealer acting as underwriter, placement agent or initial
purchaser with respect to a Securitization Transaction. Any such statement or
letter may take the form of a standard, generally applicable document
accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(c) [Reserved].
(d) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Seller shall (or shall
cause each Third-Party Originator to) (i) notify the Purchaser and any
Depositor in writing of (A) any material litigation or governmental
proceedings pending against the Seller or any Third-Party Originator and (B)
any affiliations or relationships that develop following the closing date of a
Securitization Transaction between the Seller or any Third-Party Originator
and any of the parties specified in clause (D) of paragraph (a) of this
Section (and any other parties identified in writing by the requesting party)
with respect to such Securitization Transaction, and (ii) provide to the
Purchaser and any Depositor a description of such proceedings, affiliations or
relationships.
Subsection 32.04 Indemnification; Remedies.
(a) Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with
-54-
respect to such Securitization Transaction; each broker dealer acting as
underwriter, placement agent or initial purchaser, each Person who controls
any of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor, and shall hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses
and related costs, judgments, and any other costs, fees and expenses that any
of them may sustain arising out of or based upon:
(1)(A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification,
accountants' letter or other material provided under this Section 32 by
or on behalf of the Seller, or provided under this Section 32 by or on
behalf of any Third-Party Originator (collectively, the "Seller
Information"), or (B) the omission or alleged omission to state in the
Seller Information a material fact required to be stated in the Seller
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph
shall be construed solely by reference to the Seller Information and not
to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Seller Information
or any portion thereof is presented together with or separately from
such other information;
(2) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or
other material when and as required under this Section 32; or
(3) any breach by the Seller of a representation or warranty set
forth in Subsection 32.02(a) or in a writing furnished pursuant to
Subsection 32.02(b) and made as of a date prior to the closing date of
the related Securitization Transaction, to the extent that such breach
is not cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
32.02(b) to the extent made as of a date subsequent to such closing
date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Seller shall promptly reimburse the Purchaser,
any Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction, for all costs reasonably
incurred by each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as required
by the Seller or any Third-Party Originator.
(b) Any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or other
material when and as required under this Section 32, or any breach by the
Seller of a representation or warranty set forth in Subsection 32.02(a) or in
a writing furnished pursuant to Subsection 32.02(b) and made as of a date
prior to the closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or any breach by
the Seller of a representation or warranty in a
-55-
writing furnished pursuant to Subsection 32.02(b) to the extent made as of a
date subsequent to such closing date, shall immediately and automatically,
without notice or grace period, constitute an Event of Default with respect to
the Seller under this Agreement and any applicable Reconstitution Agreement,
and shall entitle the Purchaser or Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Interim Servicer as
servicer under the Interim Servicing Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement or any applicable Reconstitution Agreement to the contrary) of any
compensation to the Interim Servicer; provided that to the extent that any
provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Interim Servicer as servicer, such provision shall be given
effect.
[Signatures Commence on Following Page]
-56-
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
(Purchaser)
By: ___________________________________
Name:__________________________________
Title:_________________________________
NEW CENTURY MORTGAGE
CORPORATION
(Seller)
By: ___________________________________
Name:__________________________________
Title:_________________________________
-57-
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for inspection
by the Purchaser and any prospective Purchaser, and which shall be delivered
to the Custodian, or to such other Person as the Purchaser shall designate in
writing, pursuant to Section 6 of the Flow Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(c) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________, without recourse" and
signed in the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage Notes
for endorsements, the endorsement may be contained on an allonge, if state law
so allows and the Custodian is so advised by the Seller that state law so
allows. If the Mortgage Loan was acquired by the Seller in a merger, the
endorsement must be by "[Last Endorsee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Last
Endorsee while doing business under another name, the endorsement must be by
"[Last Endorsee], formerly known as [previous name]";
(d) the original of any guarantee executed in connection with the
Mortgage Note;
(e) the original Mortgage with evidence of recording thereon. If
in connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, the Seller shall deliver or cause to be delivered
to the Custodian, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer's Certificate of
the Seller (or certified by the title company, escrow agent, or closing
attorney) stating that such Mortgage has been dispatched to the appropriate
public recording office for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage will be
promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage;
(f) the originals of all assumption, modification, consolidation
or extension agreements, if any, with evidence of recording thereon;
(g) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must
be duly recorded only if recordation is either necessary under applicable law
or commonly required by private institutional mortgage investors in the area
where the Mortgaged Property is located or on direction of the Purchaser as
provided in this Agreement. If the Assignment of Mortgage is to be
A-1
recorded, the Mortgage shall be assigned to the Purchaser. If the Assignment
of Mortgage is not to be recorded, the Assignment of Mortgage shall be
delivered in blank. If the Mortgage Loan was acquired by the Seller in a
merger, the Assignment of Mortgage must be made by "[Seller], successor by
merger to [name of predecessor]". If the Mortgage Loan was acquired or
originated by the Seller while doing business under another name, the
Assignment of Mortgage must be by "[Seller], formerly known as [previous
name]";
(h) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i)
in the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has
been dispatched to the appropriate public recording office for recordation and
that such original recorded intervening assignment of mortgage or a copy of
such intervening assignment of mortgage certified by the appropriate public
recording office to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to the Custodian
upon receipt thereof by the Seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is lost
after recordation in a public recording office, a copy of such intervening
assignment certified by such public recording office to be a true and complete
copy of the original recorded intervening assignment;
(i) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and
complete by the title insurance company;
(j) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage; and
(k) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power certified
by the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered
to the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will
be delivered to the Custodian. An extension of the date specified in clause
(iv) above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
A-2
Exhibit B
EXHIBIT B
[RESERVED]
B-1
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________ [COMPANY], a [state] [federally]
chartered institution organized under the laws of the [state of ____________]
[United States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete
copy of the charter of the Company which is in full force and effect on
the date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete
copy of the bylaws of the Company which are in effect on the date hereof
and which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and
no event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete
copy of the corporate resolutions of the Board of Directors of the
Company authorizing the Company to execute and deliver the Flow Mortgage
Loan Purchase and Warranties Agreement, dated as of _______ __, 200_, by
and between Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser") and
the Company (the "Purchase Agreement"), [and to endorse the Mortgage
Notes and execute the Assignments of Mortgages by original [or
facsimile] signature], and such resolutions are in effect on the date
hereof and have been in effect without amendment, waiver, rescission or
modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement,, [the sale of the mortgage loans] or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
6. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of the Purchase Agreement conflicts or
will conflict with or results or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of
the Company or, to the best of my knowledge, the terms of any indenture
or other agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or any statute or order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which
it is bound.
C-1
7. To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate,
may result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on
its business substantially as now conducted or in any material liability
on the part of the Company or which would draw into question the
validity of the Purchase Agreement, or the mortgage loans or of any
action taken or to be taken in connection with the transactions
contemplated hereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the Purchase
Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or
representative of the Company, who holds the office set forth opposite
his or her name on Exhibit 5, and the signatures of such persons
appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
C-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
C-3
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
_______________________ ________________________ ________________________
_______________________ ________________________ ________________________
_______________________ ________________________ ________________________
_______________________ ________________________ ________________________
_______________________ ________________________ ________________________
_______________________ ________________________ ________________________
_______________________ ________________________ ________________________
C-4
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
-------------------------------------------------------
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain
matters in connection with the sale by the Company of the Mortgage Loans
pursuant to that certain Flow Mortgage Loan Purchase and Warranties Agreement
by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the
"Purchaser"), dated as of _________ __, 200_ (the "Agreement") which sale is
in the form of whole loans. Capitalized terms not otherwise defined herein
have the meanings set forth in the Purchase Agreement and the Servicing
Agreement.
[We] [I] have examined the following documents:
1. the Agreement;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company and the
Originator contained in the Agreement. [We] [I] have assumed the authenticity
of all documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company and the Originator are [type of entity] duly
organized, validly existing and in good standing under the
laws of the [United States] and are qualified to transact
business in, and is in good standing under, the laws of [the
state of incorporation].
2. Each of the Company and the Originator has the power to
engage in the transactions contemplated by the Agreement and
all requisite power,
D-1
authority and legal right to execute and deliver the
Agreement and to perform and observe the terms and
conditions of the Agreement.
3. The Agreement has been duly authorized, executed and
delivered by the Company and the Originator, as applicable,
and is a legal, valid and binding agreement enforceable in
accordance with its terms against the Company and the
Originator, as applicable, subject to bankruptcy laws and
other similar laws of general application affecting rights
of creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially
interfere with the realization of the benefits provided
thereunder or with the Purchaser's ownership of the Mortgage
Loans.
4. Each of the Company and the Originator has been duly
authorized to allow any of its officers to execute any and
all documents by original signature in order to complete the
transactions contemplated by the Agreement.
[5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents
the legal and valid signature of said officer of the
Company].
6. Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Company or the
Originator of or compliance by the Company or the Originator
with the Agreement and the sale of the Mortgage Loans by the
Company or the consummation of the transactions contemplated
by the Agreement or (ii) any required consent, approval,
authorization or order has been obtained by the Company or
the Originator.
7. Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of, the Agreement
conflicts or will conflict with or results or will result in
a breach of or constitutes or will constitute a default
under the charter or by-laws of the Company or the
Originator, as applicable, or, to the best of my knowledge,
the material terms of any indenture or other agreement or
instrument to which the Company or the Originator is a party
or by which it is bound or to which it is subject, or
violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or
regulatory body to which the Company or the Originator is
subject or by which it is bound.
8. There is no action, suit, proceeding or investigation
pending or, to the best of [our] [my] knowledge, threatened
against the Company or the Originator which, in [our] [my]
judgment, either in any one instance or in
D-2
the aggregate, may result in any material adverse change in
the business, operations, financial condition, properties or
assets of the Company or the Originator or in any material
impairment of the right or ability of the Company or the
Originator to carry on its business substantially as now
conducted or in any material liability on the part of the
Company or the Originator or which would draw into question
the validity of the Agreement or the Mortgage Loans or of
any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely
to impair materially the ability of the Company or the
Originator to perform under the terms of the Agreement.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreement, is sufficient to fully
transfer to the Purchaser all right, title and interest of
the Company thereto as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable
form, except for the insertion of the name of the assignee,
and upon the name of the assignee being inserted, are
acceptable for recording under the laws of the state where
each related Mortgaged Property is located. The endorsement
of the Mortgage Notes, the delivery to the Purchaser, or its
designee, of the Assignments of Mortgage, and the delivery
of the original endorsed Mortgage Notes to the Purchaser, or
its designee, are sufficient to permit the Purchaser to
avail itself of all protection available under applicable
law against the claims of any present or future creditors of
the Company, and are sufficient to prevent any other sale,
transfer, assignment, pledge or hypothecation of the
Mortgages and the Mortgage Notes by the Company from being
enforceable.
Except as otherwise set forth in the Agreement, I assume no
obligation to revise this opinion or alter its conclusions to update or
support this letter to reflect any facts or circumstances that may hereafter
develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
D-3
--------------------------------
[Name]
[Assistant] General Counsel
D-4
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______ (the "Association")]
------------------------
------------------------
------------------------
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________
[COMPANY] a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell to Xxxxxx Xxxxxxx
Mortgage Capital Inc. under the Flow Mortgage Loan Purchase and Warranties
Agreement, dated as of ______ __, 200_, certain mortgage loans originated by
the Association. The Company warrants that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a
full and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
E-1
Very truly yours,
----------------------------
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
___________________________
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
E-2
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Flow Mortgage Loan
Purchase and Warranties Agreement, dated as of ______ __, 200_, and certifies
that all notes, mortgages, assignments and other documents in its possession
relating to such Mortgage Loans have been delivered and released to the
Company or its designees, as of the date and time of the sale of such Mortgage
Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. Such release shall be effective
automatically without any further action by any party upon payment in one or
more installments, in immediately available funds, of $_____________, in
accordance with the wire instructions set forth below.
Name and Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
By:_____________________________
F-1
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx
Mortgage Capital Inc. that, as of the date and time of the sale of the
above-mentioned Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the
security interests in the Mortgage Loans released by the above-named financial
institution comprise all security interests relating to or affecting any and
all such Mortgage Loans. The Company warrants that, as of such time, there are
and will be no other security interests affecting any or all of such Mortgage
Loans.
----------------------------
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
F-2
Exhibit G
EXHIBIT G
UNDERWRITING GUIDELINES
-----------------------
G-1
Exhibit H
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
-------------------------------------------
On this ___ day of __________, ____, ___________________ NC
Capital Corporation ("Seller"), as the Seller under (i) that certain Purchase
Price and Terms Agreement, dated as of ___________, _____ (the "PPTA"), and
(ii) that certain Flow Mortgage Loan Purchase and Warranties Agreement, dated
as of ________, ____ (the "Purchase Agreement"), does hereby sell, transfer,
assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital Inc.
("Purchaser") as the Purchaser under the Agreements (as defined below),
without recourse, but subject to the terms of the Agreements, all right, title
and interest of, in and to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as Exhibit A (the "Mortgage Loans"), together with
the Servicing Rights, and the Mortgage Files and all rights and obligations
arising under the documents contained therein. Each Mortgage Loan subject to
the Agreements was underwritten in accordance with, and conforms to, the
Underwriting Guidelines attached hereto as Exhibit C. Pursuant to Section 6 of
the Purchase Agreement, the Seller has delivered to the Custodian the
documents for each Mortgage Loan to be purchased as set forth in the Purchase
Agreement. The contents of each Servicing File required to be retained by
______________________ ("Servicer"), as Originator/Servicer under that certain
Servicing Agreement, dated as of ________, ____ (the "Servicing Agreement") to
service the Mortgage Loans pursuant to the Servicing Agreement and thus not
delivered to the Purchaser are and shall be held in trust by the Servicer for
the benefit of the Purchaser as the owner thereof. The Servicer's possession
of any portion of the Servicing File is at the will of the Purchaser for the
sole purpose of facilitating servicing of the related Mortgage Loan pursuant
to the Servicing Agreement, and such retention and possession by the Servicer
shall be in a custodial capacity only. The ownership of each Mortgage Note,
Mortgage, the Servicing Rights and the contents of the Mortgage File and
Servicing File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or which come
into the possession of the Seller or the Servicer shall immediately vest in
the Purchaser and shall be retained and maintained, in trust, by the Seller at
the will of the Purchaser in such custodial capacity only. The PPTA, the
Purchase Agreement and the Servicing Agreement shall collectively be referred
to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
H-1
[SELLER]
By:_________________________________
Name:_______________________________
Title:______________________________
[SERVICER]
By:_________________________________
Name:_______________________________
Title:______________________________
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:______________________________
Name:_________________________
Title:________________________
H-2
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
------------------
H-3
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
-------------------------------------------------------
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
---------------------------------------------
Pool Characteristics of the Mortgage Loan Package as delivered on
the related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less
than $_________; (2) an origination date earlier than __ months prior to the
related Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO Score of
less than ___; or (5) a debt-to-income ratio of more than __%. Each Mortgage
Loan has a Mortgage Interest Rate of at least ___% per annum and an
outstanding principal balance less than $_________. Each Adjustable Rate
Mortgage Loan has an Index of [_______].
H-4
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
H-5
