EXECUTION
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of April, 1998, by and between XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and OPTION
ONE MORTGAGE CORPORATION, a California corporation ("the Servicer"), recites
and provides as follows:
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans identified on
Schedule I hereto (the "Serviced Mortgage Loans") to Structured Asset
Securities Corporation ("SASCO"), which in turn has conveyed the Serviced
Mortgage Loans to First Union National Bank, as trustee (the "Trustee") under
a trust agreement dated as of April 1, 1998 (the "Trust Agreement"), among the
Trustee, Norwest Bank Minnesota, National Association, as master servicer
("Norwest," and, together with any successor Master Servicer appointed
pursuant to the provisions of the Trust Agreement, the "Master Servicer") and
SASCO.
WHEREAS, Xxxxxx Capital desires that the Servicer service the Serviced
Mortgage Loans, and the Servicer has agreed to do so, subject to the
conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be obligated,
among other things, to supervise the servicing of the Serviced Mortgage Loans on
behalf of the Trustee, and shall have the right, under certain circumstances, to
terminate the rights and obligations of the Servicer under this Servicing
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Xxxxxx Capital and the Servicer hereby agree
as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this Agreement,
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including Exhibit A hereto and any provisions of the Seller's Warranties and
Servicing Agreement dated as of September 30, 1997, between Xxxxxx Capital and
the Servicer (the "Warranties and Servicing Agreement") incorporated by
reference herein, shall have the meanings ascribed to such terms in the Trust
Agreement.
2. Servicing. The Servicer agrees, with respect to the Serviced Mortgage
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Loans, to perform and observe the duties, responsibilities and obligations
that are to be performed and observed under the provisions of the Warranties
and Servicing Agreement, except as otherwise provided herein and on Exhibit A
hereto, and that the provisions of the Warranties and Servicing Agreement, as
so modified, are and shall be a part of this Agreement to the same extent as
if set forth herein in full.
3. Master Servicing; Termination of Servicer. The Servicer, including any
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successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the
provisions of this Agreement. The Master Servicer, acting on behalf of the
Trustee pursuant to the Trust Agreement, shall have the same rights as the
"Purchaser" (as defined in the Warranties and Servicing Agreement) to enforce
the obligations of the Servicer under the Warranties and Servicing Agreement.
The Master Servicer shall be entitled to terminate the rights and obligations
of the Servicer under this Agreement upon the failure of the Servicer to
perform any of its obligations under this Agreement, as provided in Article X
of the Warranties and Servicing Agreement.
4. No Representations. Neither the Servicer nor the Master Servicer shall
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be obligated or required to make any representations and warranties regarding
the Serviced Mortgage Loans in connection with the transactions contemplated
by the Trust Agreement and issuance of the certificates issued pursuant
thereto.
5. Notices. All notices and communications between or among the parties
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hereto shall be in writing and shall be deemed received or given when mailed
first-class mail, postage prepaid, addressed to each other party at its
address specified below. Each party may designate to the other parties in
writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
6. Governing Law. THIS SERVICING AGREEMENT SHALL BE GOVERNED BY, AND
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CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING
NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
8. Reconstitution. Xxxxxx Capital and the Servicer agree that this
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Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Warranties and Servicing
Agreement.
9. Notices and Remittances to the Master Servicer. All notices required
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to be delivered to the Purchaser or the Master Servicer under this Agreement
shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1998-4
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: 13423000, SASCO 1998-4
10. Errors and Omissions Insurance. The Servicer shall keep in force
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during the term of this Agreement a fidelity bond and a policy or policies of
insurance covering errors and omissions in the performance of the Servicer's
obligations under this Agreement. Such fidelity bond and policy or policies
shall be maintained with recognized insurers and shall be in such form and
amount as would permit the Servicer to be qualified as a FNMA or FHLMC
seller-servicer. The Servicer shall be deemed to have complied with this
provision if an affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. The Servicer
shall furnish to the Master Servicer a copy of each such bond and insurance
policy upon receipt thereof by the Servicer.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
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Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
OPTION ONE MORTGAGE CORPORATION
By:
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Name:
Title:
EXHIBIT A
Modifications to the Warranties and Servicing Agreement
1. All references to "Pool I," "Pool 1," "Pool 2" and "Pool II" in the
Warranties and Servicing Agreement are hereby deleted.
2. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"The custodial agreements relating to custody of the Serviced
Mortgage Loans among: (i) U.S. Bank Trust National Association, as
Custodian, First Union National Bank, as Trustee, and Structured
Asset Securities Corporation, (ii) Chase Bank of Texas, N.A., as
Custodian, First Union National Bank, as Trustee, and Structured
Asset Securities Corporation, and (iii) Norwest Bank Minnesota,
National Association, as Custodian, First Union National Bank, as
Trustee, and Structured Asset Securities Corporation, each dated as
of April 1, 1998."
3. The definition of "Monthly Advance" in Article I is hereby amended by
adding at the end of such definition the following: ", but only to the
extent that such amount is expected, in the reasonable judgment of the
Company, to be recoverable from collections or other recoveries in
respect of such Mortgage Loan."
4. The definition of "Servicing Advance" in Article I is hereby amended by
adding, immediately after the phrase "but not limited to, the cost of",
the following: "transfer of servicing of Delinquent Mortgage Loans to the
Special Servicer pursuant to Section 11.02, and".
5. The word "or" at the beginning of line twelve of the second paragraph in
Section 4.01 is hereby deleted and replaced with a comma, and the
following is hereby added immediately following the words "change the
final maturity date on such Mortgage Loan" in such line twelve: "or
permit any alteration, substitution or release of any collateral for such
Mortgage Loan."
6. The fourth and fifth paragraphs of Section 4.01 are hereby deleted in
their entirety and replaced with the following:
"Notwithstanding anything to the contrary in this Agreement, the
Company shall not waive any premium or penalty in connection with a
prepayment of principal of any Mortgage Loan, and shall not consent
to the modification of any Mortgage Note to the extent that such
modification relates to payment of a prepayment premium or penalty."
7. The following paragraph is hereby added at the end of Section 4.02:
"Notwithstanding the foregoing, in the event of any conflict between
the provisions of this Section 4.02 and the provisions of Section
11.02, the provisions of Section 11.02 shall control."
8. The words "the Purchaser of Conventional Residential Adjustable and Fixed
Rate Mortgage Loans, Group No. 1997-LB/00" in the first paragraph of
Section 4.04 are hereby deleted and replaced with the following: "Norwest
Bank Minnesota, National Association, as master servicer for SASCO
1998-4."
9. is amended by deleting the word "and" at the end of clause (vi),
replacing the period at the end of clause (vii) with "; and", and adding
the following immediately following clause (viii):
"(viii) to reimburse itself for Monthly Advances of the Company's
funds made pursuant to Section 7.03, the Company's right to
reimburse itself pursuant to this subclause (viii) (x) being limited
to amounts received on the related Mortgage Loan which represent
late payments of principal and/or interest respecting which any such
advance was made, related Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, REO Property, and such other amounts as may
be collected by the Company from the Mortgagor or otherwise relating
to such Mortgage Loan, and (y) if, after the liquidation of such
Mortgage Loan, such amounts are insufficient to reimburse the
Company for such unreimbursed Monthly Advances, the Company may seek
reimbursement from other amounts in the Custodial Account, it being
understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of the
Purchaser;
10. is further amended by adding, immediately after the words "unreimbursed
Servicing Advances" in the first line of clause (ii), the following: ",
and for any unpaid Servicing Fees,".
11. The words "the Purchaser of Conventional Residential Adjustable and Fixed
Rate Mortgage Loans, Group No. 1997-LB/00" in the first paragraph of
Section 4.06 are hereby deleted and replaced with the following: "Norwest
Bank Minnesota, National Association, as master servicer for SASCO
1998-4."
12. All references in Section 4.15 to the disposition of REO Properties
within a two year period are hereby deleted and replaced with a three
year period.
13. The first paragraph of Section 5.01 is hereby deleted and replaced with
the following:
"On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Master Servicer (a) all amounts
deposited in the Custodial Account as of the close of business on
the Determination Date (net of charges against or withdrawals from
the Custodial Account pursuant to Section 4.05), plus (b) all
advances, if any, which the Company is obligated to make pursuant to
Section 7.03, minus (c) any amounts attributable to Principal
Prepayments, Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds or REO Disposition Proceeds received after the applicable
Prepayment Period, which amounts shall be remitted on the following
Remittance Date, together with any additional interest required to
be deposited in the Custodial Account in connection with such
Principal Prepayment in accordance with Section 7.04, and minus (d)
any amounts attributable to Monthly Payments collected but due
(giving effect to Section 5.03) on a due date or dates subsequent to
the first day of the month in which such Remittance Date occurs,
which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts."
14. is hereby amended by deleting the words "Remittance Date" in the first
line of such Section, and substituting the following: "tenth day of each
month, or if such tenth day is not a Business Day, the immediately
preceding Business Day,"
15. is hereby deleted in its entirety.
16. is hereby amended by adding the following immediately after the words
"other ancillary fees" in the second paragraph of such Section: ", but
not including any premium or penalty associated with a prepayment of
principal of a Mortgage Loan."
17. The second paragraph of Section 11.02 is hereby deleted in its entirely
and replaced with the following:
"On the second Business Day of each month, the Company shall orally
inform the Master Servicer and the Special Servicer as to which
Mortgage Loans have become delinquent for a period of 61 days or
more, without giving effect to any grace period permitted by the
related Mortgage Note (each, a "Distressed Mortgage Loan"). Any such
Mortgage Loan as to which all past due payments are made prior to
the Notice Date shall not be considered to be a Distressed Mortgage
Loan, and the servicing thereof shall not be transferred as provided
below. On the fourth Business Day of each month (the "Notice Date"),
the Company shall send by facsimile a written listing of the
Distressed Mortgage Loans to the Master Servicer, the Trustee and
the Custodian, and shall mail to the Mortgagor of each Mortgage Loan
listed in a Transfer Notice a letter advising each such Mortgagor of
the transfer of the servicing of the related Mortgage Loan to the
Special Servicer, in accordance with the Xxxxxxxx Xxxxxxxx National
Affordable Housing Act of 1990; provided, however, the content and
format of such letter shall have the prior approval of the Special
Servicer. The Company shall promptly provide the Special Servicer
with copies of all such notices. The transfer of servicing with
respect to each such Mortgage Loan to the Special Servicer shall be
effected by the Company not later than the fifteenth day following
the applicable Notice Date (the "Transfer Date"). By the Business
Day immediately following each Notice Date, the Company shall
provide the Master Servicer, the Special Servicer, the Trustee and
the Custodian with a certification (the "Transfer Notice") listing
the Distressed Mortgage Loans.
At least five Business Days prior to each Transfer Date, the Company
shall deliver, with respect to the Distressed Mortgage Loans listed
on the related Transfer Notice, to the Special Servicer all
Servicing Files, and to the Special Servicer and the Master Servicer
a loan level tape or other electronic media containing loan set-up
information in form reasonably acceptable to the Master Servicer and
the Special Servicer. Within two Business Days following such
Transfer Date, the Servicer shall deliver a final trial balance
(subject to special claims), in form reasonably acceptable to the
Master Servicer and the Special Servicer, and commensurate with
generally acceptable industry standards, detailing the amount of any
unreimbursed Monthly Advances, Servicing Advances and accrued and
unpaid Servicing Fees on a loan level basis. Should the Master
Servicer or the Special Servicer desire a loan level tape or other
electronic media containing information which is not readily
extractable from the Company's servicing system, the Company shall
reasonably cooperate to make such loan level data available to the
Master Servicer and Special Servicer. In addition, no more than two
Business Days after the Transfer Date, the Company shall transfer to
the Special Servicer any funds held in an Escrow Account or
Custodial Account relating to the Distressed Mortgage Loans listed
in the related Transfer Notice. Upon reasonable compliance by the
Company with the provisions of this Section regarding the transfer
of servicing for Distressed Mortgage Loans, the Special Servicer
will reimburse the Company within five Business Days for any
unreimbursed Monthly Advances, Servicing Advances and accrued and
unpaid Servicing Fees with respect to such Distressed Mortgage Loans
which have been properly documented. Notwithstanding anything herein
to the contrary, the transfer of servicing for Distressed Mortgage
Loans shall not require the payment of a termination fee therefor.
In connection with the transfer of any Distressed Mortgage Loan, (i) the
Company will be responsible for servicing the Distressed Mortgage Loan
until the effective date of transfer of servicing to the Special
Servicer, but shall have no right or obligation to service such
Distressed Mortgage Loan from and after the effective date of the
transfer of servicing to the Special Servicer, (ii) notwithstanding
clause (i) above, the Company shall include the Distressed Mortgage Loan
in its monthly remittance report pursuant to Section 5.02 for the month
in which such transfer is effected and shall be obligated, subject to
Section 7.03, to make the Monthly Advance with respect to such Distressed
Mortgage Loan on the Remittance Date in the month in which such transfer
is effected, in each case, regardless of whether the Remittance Date
occurs before or after the effective date of such transfer, (iii) the
amount of Monthly Advances to be reimbursed to the Company by the Special
Servicer hereunder shall include the Monthly Advance described in clause
(ii) above regardless of whether the Company makes such Monthly Advance
before or after the effective date of such transfer, (iv) the Company
shall, no later than the end of the month in which such transfer is
effected, provide to the Special Servicer loan level information (in the
loan level tape or other electronic media or other agreed-upon form)
regarding the Distressed Mortgage Loan during the month of such transfer
as may be necessary to enable the Special Servicer to provide such
information in its remittance report for the next following month, and
(v) the Company shall be entitled to its pro rata portion of the
Servicing Fee with respect to any such Distressed Mortgage Loan for the
month in which such transfer occurs, based on the number of days in such
month that precede the Transfer Date."
18. The following paragraph is added at the end of Section 12.01:
"Neither the Master Servicer nor any successor servicer (including
the Purchaser and the Master Servicer) shall be liable for any acts
or omissions of the Company or any predecessor servicer. In
particular, neither the Master Servicer nor any successor servicer
(including the Purchaser and the Master Servicer) shall be liable
for any servicing errors or interruptions resulting from any failure
of the Company to maintain computer and other information systems
that are year-2000 compliant."
19. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date, the
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period beginning on the Cut-off Date and ending on May 1. With
respect to each subsequent Remittance Date, the period commencing on
the second day of the month immediately preceding the month in which
such Remittance Date occurs and ending on the first day of the month
in which such Remittance Date occurs."
