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[Exhibit 4.2]
[NAME OF SERVICER],
AS SERVICER
_____ TRUST SERIES ____ __,
AS ISSUER
AND
[NAME OF INDENTURE TRUSTEE]
AS INDENTURE TRUSTEE
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SERVICING AGREEMENT
Dated as of __________ 1, ____
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions..................................................................................
Section 1.02 Other Definitional Provisions................................................................
Section 1.03 Interest Calculations........................................................................
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01 Representations and Warranties Regarding the Servicer........................................
Section 2.02 Representations and Warranties of the Issuer.................................................
Section 2.03 Enforcement of Representations and Warranties................................................
ARTICLE III
ADMINISTRATION AND SERVICING OF LOANS
Section 3.01 Servicer to Act as Servicer..................................................................
Section 3.02 Collection of Certain Loan Payments..........................................................
Section 3.03 [Reserved]...................................................................................
Section 3.04 Custodial Account and Escrow Account.........................................................
Section 3.05 Permitted Withdrawals From the Custodial Account and Escrow Account .........................
Section 3.06 Investment of Funds in the Custodial Account, the Escrow Account and the REO Account.........
Section 3.07 Payment of Taxes, Insurance and Other Charges................................................
Section 3.08 Maintenance of Hazard Insurance..............................................................
Section 3.09 Maintenance of Mortgage Blanket Insurance....................................................
Section 3.10 Fidelity Bond; Errors and Omissions Insurance................................................
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements....................................
Section 3.12 Realization Upon Defaulted Loans.............................................................
Section 3.13 Title, Management and Disposition of REO Property............................................
Section 3.14 [Reserved]...................................................................................
Section 3.15 Reports of Foreclosure and Abandonment of Mortgaged Properties...............................
Section 3.16 Optional Purchase of Defaulted Loans.........................................................
Section 3.17 Indenture Trustee to Cooperate; Release of Mortgage Files....................................
Section 3.18 Servicing Compensation.......................................................................
Section 3.19 Statement as to Compliance...................................................................
Section 3.20 Independent Public Accountants' Servicing Report.............................................
Section 3.21 Access to Certain Documentation..............................................................
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01 Statements to Securityholders................................................................
Section 4.02 Tax Reporting................................................................................
ARTICLE V
ADVANCES; COMPENSATING INTEREST
Section 5.01 Advances.....................................................................................
Section 5.02 Compensating Interest........................................................................
ARTICLE VI
THE SERVICER
Section 6.01 Liability of the Servicer....................................................................
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer................
Section 6.03 Limitation on Liability of the Servicer and Others...........................................
Section 6.04 Servicer Not to Resign.......................................................................
Section 6.05 Subservicing Agreements Between the Servicer and Subservicers................................
Section 6.06 Successor Subservicers.......................................................................
Section 6.07 Subservicing Accounts........................................................................
Section 6.08 Rights of the Depositor in Respect of the Servicer...........................................
Section 6.09 Liability of the Servicer....................................................................
Section 6.10 Assumption or Termination of Subservicing Agreements by Indenture Trustee....................
ARTICLE VII
DEFAULT
Section 7.01 Servicing Default............................................................................
Section 7.02 Indenture Trustee to Act; Appointment of Successor...........................................
Section 7.03 Notification to Securityholders..............................................................
Section 7.04 Waiver of Servicer Events of Default.........................................................
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment....................................................................................
Section 8.02 GOVERNING LAW................................................................................
Section 8.03 Notices......................................................................................
Section 8.04 Severability of Provisions...................................................................
Section 8.05 Third Party Beneficiaries....................................................................
Section 8.06 Counterparts.................................................................................
Section 8.07 Effect of Headings and Table of Contents.....................................................
Section 8.08 Termination Upon Purchase by the Servicer or Liquidation of All Loans; Partial Redemption....
Section 8.09 Certain Matters Affecting the Indenture Trustee..............................................
Section 8.10 Owner Trustee Not Liable for Related Documents...............................................
EXHIBIT A LOAN SCHEDULE A-1
EXHIBIT B POWER OF ATTORNEY B-1
EXHIBIT C FORM OF REQUEST FOR RELEASE C-1
EXHIBIT D OFFICER'S CERTIFICATE D-1
This is a Servicing Agreement, dated as of _________ 1, ____, among
[Name of Servicer] (the "Servicer"), the _____ Trust Series ____ __ (the
"Issuer") and [Name of Indenture Trustee] (the "Indenture Trustee").
W I T N E S S E T H T H A T:
WHEREAS, pursuant to the terms of a Loan Purchase Agreement, [Name of
Originator] (in its capacity as Originator) will sell to the Seller the Loans
together with the Related Documents on the Closing Date;
WHEREAS, pursuant to the terms of a Loan Purchase Agreement, [Name of
Seller] (in its capacity as Seller) will sell to the Depositor the Loans
together with the Related Documents on the Closing Date;
WHEREAS, the Depositor will sell the Loans and all of its rights under
the Loan Purchase Agreement to the Issuer, together with the Related Documents
on the Closing Date;
WHEREAS, pursuant to the terms of the Owner Trust Agreement, the Issuer
will issue and transfer to or at the direction of the Depositor, the
Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue
and transfer to or at the direction of the Depositor, the Notes; and
WHEREAS, pursuant to the terms of this Servicing Agreement, the
Servicer will service the Loans directly or through one or more Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. DEFINITIONS. For all purposes of this Servicing
Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms not otherwise defined herein shall have
the meanings assigned to such terms in the Definitions contained in Appendix A
to the Indenture dated as of _______________ (the "Indenture"), between ______
Trust Series ____ __, as issuer, and [Name of Indenture Trustee], as Indenture
Trustee, which is incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS. (a) All terms defined in
this Servicing Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Servicing Agreement shall refer to this Servicing
Agreement as a whole and not to any particular provision of this Servicing
Agreement; Section and Exhibit references contained in this Servicing Agreement
are references to Sections and Exhibits in or to this Servicing Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Servicing Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. INTEREST CALCULATIONS. All calculations of interest
hereunder that are made in respect of the Principal Balance of a Loan shall be
made in accordance with the Mortgage Note. All calculations of interest on the
Securities shall be made on the basis of the actual number of days in the
Interest Accrual Period and a year assumed to consist of 360 days. The
calculation of the Servicing Fee shall be made on the basis of a 30 day month
and a year assumed to consist of 360 days. All dollar amounts calculated
hereunder shall be rounded to the nearest xxxxx with one half of one xxxxx being
rounded up.
ARTICLE II
Representations And Warranties
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICER.
The Servicer represents and warrants to the Issuer and the Indenture Trustee, as
of the Cut off Date:
(i) The Servicer is a ____ duly organized, validly existing
and in good standing under the laws of the State of _____________ and
has the corporate power to own its assets and to transact the business
in which it is currently engaged. The Servicer is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in
which the failure to so qualify would have a material adverse effect on
the business, properties, assets, or condition (financial or other) of
the Servicer;
(ii) The Servicer has the full power and authority to service
each Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Servicing Agreement
and has duly authorized by all necessary corporate action on the part
of the Servicer the execution, delivery and performance of this
Servicing Agreement; and this Servicing Agreement, assuming the due
authorization, execution and delivery hereof by the Depositor and the
Trustee, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its
terms, except to the extent that (a) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (b) the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought;
(iii) The execution and delivery of this Servicing Agreement
by the Servicer, the servicing of the Loans by the Servicer hereunder,
the consummation of any other of the transactions herein contemplated,
and the fulfillment of or compliance with the terms hereof are in the
ordinary course of business of the Servicer and shall not (A) result in
a breach of any term or provision of the organizational documents of
the Servicer or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any other
material agreement or instrument to which the Servicer is a party or by
which it may be bound, or any statute, order or regulation applicable
to the Servicer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Servicer; and the
Servicer is not a party to, bound by, or in breach or violation of any
indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the Servicer's
knowledge, would in the future materially and adversely affect, (x) the
ability of the Servicer to perform its obligations under this Servicing
Agreement or (y) the business, operations, financial condition,
properties or assets of the Servicer taken as a whole;
(iv) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to
the knowledge of the Servicer threatened, against the Servicer or any
of its properties or with respect to this Servicing Agreement or the
Securities which in the opinion of the Servicer has a reasonable
likelihood of resulting in a material adverse effect on the
transactions contemplated by this Servicing Agreement;
(v) The Servicer is an approved servicer for Xxxxxx Xxx or
Xxxxxxx Mac in good standing and is a HUD approved mortgagee pursuant
to Section 203 and Section 211 of the National Housing Act;
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Servicer of, or compliance by the Servicer with,
this Servicing Agreement or the consummation of the transactions
contemplated by this Servicing Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date;
(vii) The Servicer shall 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 or their successors on a monthly basis;
(viii) There are no actions or proceedings against, or
investigations known to it of, the Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering
into this Servicing Agreement, (B) seeking to prevent the consummation
of the transactions contemplated by this Servicing Agreement or (C)
that might prohibit or materially and adversely affect the performance
by the Servicer of its obligations under, or validity or enforceability
of, this Servicing Agreement;
(ix) The information set forth in the monthly tape provided to
the Indenture Trustee or any of its Affiliates shall be true and
correct in all material respects;
(x) The Servicer shall transmit full-file credit reporting
data for each Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and
that for each Loan, the Servicer agrees it shall report one of the
following statuses each month as follows: new origination, current,
delinquent (30-59 days, 60-89 days, 90-119 days, 120 or more days,
etc.), foreclosed, in bankruptcy or charged-off;
(xi) The Servicer has the facilities, procedures, and
experienced personnel necessary for the sound servicing of the Loans;
(xii) The Servicer 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 Servicer, for
accounting and tax purposes, as compensation for the servicing and
administration of the Loans pursuant to this Servicing Agreement;
(xiii) The Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Servicing Agreement;
(xiv) The written statements, reports and other documents
prepared and furnished or to be prepared and furnished by the Servicer
pursuant to this Servicing Agreement or in connection with the
transactions contemplated hereby do not contain any untrue statement of
material fact or omit to state a material fact necessary to make the
statements contained therein not misleading;
(xv) The Servicer possesses all licenses, permits and
approvals necessary to Service the Loans in accordance with the
Servicing Standard set forth in Section 3.01, pursuant to the terms and
provision of this Servicing Agreement and all applicable laws, and to
the best of Servicer's knowledge, all such permits, licenses and
approvals are in full force and effect and none have been suspended or
revoked, and there are presently pending or, to the Servicer's
knowledge, threatened no proceedings to suspend, terminate, restrict or
revoke any such permits, license or approvals; and
(xvi) The Servicer is rated __________ by S&P, _________ by
Xxxxx'x and _______ by Fitch, and to the best of Servicer's knowledge
there is no pending or contemplated reduction of such ratings, and the
Servicer shall give the Indenture Trustee and the Issuer prompt written
notice in the event there is a reduction of the Servicer's rating by
any rating agency.
It is understood and agreed that the representations, warranties and covenants
set forth in this Section 2.01 shall survive delivery of the Mortgage Files to
the Indenture Trustee or to a Custodian, as the case may be, and shall inure to
the benefit of the Indenture Trustee, the Issuer and the Securityholders. Upon
discovery by any of the Issuer, the Servicer or the Indenture Trustee of a
breach of any of the foregoing representations, warranties and covenants which
materially and adversely affects the value of any Loan or the interests therein
of the Noteholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Indenture Trustee and the Issuer.
Section 2.02. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer
hereby represents and warrants to the Servicer and the Indenture Trustee, as of
the Cut off Date:
(i) The Issuer is a statutory trust duly formed and in good
standing under the laws of the State of [Delaware] and has full power,
authority and legal right to execute and deliver this Servicing
Agreement and to perform its obligations under this Servicing
Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Servicing Agreement;
and
(ii) The execution and delivery by the Issuer of this
Servicing Agreement and the performance by the Issuer of its
obligations under this Servicing Agreement will not violate any
provision of any law or regulation governing the Issuer or any order,
writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Issuer or any of its assets. Such
execution, delivery, authentication and performance will not conflict
with, or result in a breach or violation of, any mortgage, deed of
trust, lease or other agreement or instrument to which the Issuer is
bound.
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. The
Servicer, on behalf of and subject to the direction of the Indenture Trustee, as
pledgee of the Loans, or the Issuer, shall enforce the representations and
warranties of the Seller and the Originator pursuant to the Loan Purchase
Agreements. Upon the discovery by the Seller, the Originator, the Depositor, the
Servicer, the Indenture Trustee, the Issuer, or any Custodian of a breach of any
of the representations and warranties made in a Loan Purchase Agreement, in
respect of any Loan which materially and adversely affects the value of such
Loan or the interests of the Securityholders, the party discovering such breach
or existence shall give prompt written notice to the other parties. The Servicer
shall promptly notify the Seller and the Originator of such breach and request
that, pursuant to the terms of the related Loan Purchase Agreement, the
Originator either (i) cure such breach in all material respects within 90 days
from the date the Originator was notified of such breach or (ii) purchase such
Loan from the Issuer at the price and in the manner set forth in Section __ of
the Loan Purchase Agreement; provided that the Originator shall, subject to
compliance with all the conditions set forth in the related Loan Purchase
Agreement, have the option to substitute an Eligible Substitute Loan or Loans
for such Loan. In the event that the Originator elects to substitute one or more
Eligible Substitute Loans pursuant to Section __ of the Loan Purchase Agreement,
the Originator shall deliver to the Issuer with respect to such Eligible
Substitute Loans, the original Mortgage Note, the Mortgage, and such other
documents and agreements as are required by the related Loan Purchase Agreement.
Payments due with respect to Eligible Substitute Loans in the month of
substitution shall not be transferred to the Issuer and will be retained by the
Servicer and remitted by the Servicer to the Seller on the next succeeding
Payment Date provided a payment at least equal to the applicable Monthly Payment
has been received by the Issuer for such month in respect of the Loan to be
removed. The Servicer shall amend or cause to be amended the Loan Schedule to
reflect the removal of such Loan and the substitution of the Eligible Substitute
Loans and the Servicer shall promptly deliver the amended Loan Schedule to the
Owner Trustee and the Indenture Trustee.
It is understood and agreed that the obligation of the Originator to cure such
breach or purchase or substitute for such Loan as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Issuer and the Indenture Trustee, as pledgee of the
Loans, against the Seller or the Originator. In connection with the purchase of
or substitution for any such Loan by the Originator, the Issuer shall assign to
the Originator all of its right, title and interest in respect of the Loan
Purchase Agreements applicable to such Loan. Upon receipt of the Repurchase
Price, or upon completion of such substitution, the Servicer shall notify the
Custodian and then the Custodian shall deliver the Mortgage Files to the
Originator, together with all relevant endorsements and assignments prepared by
the Servicer which the Indenture Trustee shall execute.
ARTICLE III
Administration And Servicing Of Loans
Section 3.01. SERVICER TO ACT AS SERVICER.
The Servicer shall service and administer the Loans on behalf of the
Issuer and in the best interests of and for the benefit of the Securityholders
(as determined by the Servicer in its reasonable judgment) in accordance with
(i) the terms of the respective Loans and any insurance policies related
thereto, (ii) all Applicable Regulations, (iii) the terms of this Servicing
Agreement, and (iv) to the extent consistent with the preceding requirements, in
the same manner in which it services and administers similar mortgage loans for
its own portfolio, giving due consideration to customary and usual standards of
practice of prudent mortgage lenders and loan servicers administering similar
mortgage loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Security by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction (all of the foregoing, the "Servicing
Standard").
To the extent consistent with the foregoing the Servicer shall also
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes related to the Loans. Subject only to the above-described
Servicing Standard, the Servicer shall have full power and authority, acting
alone or through Subservicers as provided in Section 6.05, to do or cause to be
done any and all things in connection with such servicing and administration
which it may deem necessary or desirable. Without limiting the generality of the
foregoing, the Servicer in its own name or in the name of a Subservicer is
hereby authorized and empowered by the Indenture Trustee to and shall, to the
extent provided for under this Servicing Agreement and in accordance with the
Servicing Standard, (i) execute and deliver, on behalf of the Noteholders and
the Indenture Trustee, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge, or of forbearance, or of
modification and all other comparable instruments, with respect to the Loans and
the Mortgaged Properties, (ii) institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure to convert the ownership of such properties, (iii)
market, sell and transfer title of REO Properties included the Trust Estate to
third party purchasers upon terms and conditions the Servicer deems reasonable
under the Servicing Standard, (iv) bring or respond to civil actions or
complaints related to any Loan, Mortgaged Property or REO Property included in
the Trust Estate and (v) execute any other document necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder consistent with the Servicing Standard.
At the written request of the Servicer, the Indenture Trustee shall
execute and furnish to the Servicer such documents as are necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. By execution of this Servicing Agreement, the Issuer and the
Indenture Trustee hereby grant to the Servicer a power of attorney in the form
of Exhibit B hereto, to execute any and all documents necessary to carry out any
and all servicing duties described in this Servicing Agreement (including the
taking of and transferring title of REO Properties to third parties) and
expressly confirms that this paragraph along with the face page and a copy of
the signature page (duly executed) to this Servicing Agreement shall constitute
the power of attorney for evidentiary and/or recording purposes. The Indenture
Trustee shall not be liable for the actions of the Servicer or any Subservicers
under such powers of attorney.
Consistent with the terms of this Servicing Agreement and with respect
to any Loan that is Delinquent or in default, the Servicer may waive, modify or
vary any term of any Loan or consent to the postponement of strict compliance
with any such term or in any manner grant indulgence to any Mortgagor if such
waiver, modification, postponement or indulgence is in conformity with the
Servicing Standard; provided, however, that:
(i) the Servicer shall not make future advances (except P&I
Advances); and
(ii) the Servicer shall not permit any modification with
respect to any Loan that would change the Loan Rate, defer or forgive
the payment of any principal or interest payments, reduce the
outstanding Principal Balance (except for reductions resulting from
actual payments of principal) or extend the final maturity date on such
Loan (unless as provided in Section 3.02, (i) the Mortgagor is
Delinquent or (ii) the Mortgagor is in default with respect to the
Loan).
The Servicer may delegate any of its responsibilities under this
Servicing Agreement; provided, however, that no such delegation shall release
the Servicer from the responsibilities or liabilities arising under this
Servicing Agreement. All references to Servicer in this Servicing Agreement
shall be deemed to include any Subservicer duly appointed by the Servicer
pursuant to this Servicing Agreement.
Consistent with the foregoing and this Servicing Agreement, the
Servicer shall seek to maximize the collection of amounts due, and minimize
losses that might be incurred, in connection with any Loan. For any Delinquent
or defaulted Loan, the Servicer (a) shall pursue collection from the related
Mortgagor of all amounts due under the terms of such Loan, (b) at such time as
in the judgment of the Servicer such collection efforts have been exhausted but
in no case to exceed a period of __ months since such Loan became Delinquent,
the Servicer shall consider other workout activities pursuant to Section 3.02 to
maximize collections and minimize losses, and (c) at such time as in the
judgment of the Servicer such workout activities have been exhausted, the
Servicer shall seek all other remedies that in its best judgment are available
to maximize collections and minimize losses through foreclosure sale in respect
of Mortgaged Properties or through any legal action brought to obtain judgment
against the related Mortgagor or to obtain a deficiency judgment, or to enforce
any other remedies or rights provided by the Mortgage Note or Mortgage or
otherwise available at law or in equity.
Section 3.02. COLLECTION OF CERTAIN LOAN PAYMENTS.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Loans, and shall, to the extent
such procedures shall be consistent with this Servicing Agreement and the terms
and provisions of any applicable insurance policies, follow such collection
procedures as it would follow with respect to Loans comparable to the Loans and
held for its own account. Consistent with the foregoing, the Servicer may in its
discretion, with respect to any Loan that is Delinquent or in default, (i) waive
any late payment charge or, if applicable, penalty interest, (ii) waive any
provisions of such Loan requiring the related Mortgagor to submit to mandatory
arbitration with respect to disputes arising thereunder or (iii) extend the due
dates for the Monthly Payments due on the related Mortgage Note for a period of
not greater than 180 days; provided that any extension pursuant to clause (iii)
above shall not affect the amortization schedule of such Loan for purposes of
any computation hereunder. In connection with any such modification, the
Servicer may reimburse itself for any unpaid P&I Advances with respect to such
modified Loan at the time of such modification, in accordance with Section
3.05(a) of this Servicing Agreement. In the event of any such arrangement
pursuant to clause (iii) above, the Servicer shall make timely advances on such
Loan during such extension pursuant to Section 5.01 and in accordance with the
original amortization schedule of such Loan without modification thereof by
reason of such arrangements.
Notwithstanding the foregoing, in the event that any Loan is Delinquent
or in default, the Servicer, consistent with the Servicing Standard, may also
waive, modify or vary any term of such Loan (including modifications that would
change the Loan Rate, forgive the payment of principal or interest or extend the
final maturity date of such Loan), accept payment from the related Mortgagor of
an amount less than the Principal Balance in final satisfaction of such Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness of principal or interest, postponements, or indulgences
collectively referred to herein as "forbearance"). The Servicer's analysis
supporting any forbearance and the conclusion that any forbearance meets the
standards of Section 3.01 shall be reflected in writing in the Mortgage File.
In the event that a shortfall in any collection on or liability with
respect to any Loan results from or is attributable to adjustments to Loan
Rates, Monthly Payments or Principal Balances that were made by the Servicer in
a manner not consistent with the terms of the related Mortgage Note and this
Servicing Agreement, the Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Indenture Trustee for deposit in the Note
Account from its own funds the amount of any such shortfall and shall indemnify
and hold harmless the Issuer, the Indenture Trustee, the Seller, the Originator,
the Depositor and any successor Servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Servicing
Agreement.
Section 3.03. [Reserved].
Section 3.04. CUSTODIAL ACCOUNT AND ESCROW ACCOUNT.
(a) CUSTODIAL ACCOUNT. The Servicer shall segregate and hold all funds
collected and received pursuant to each Loan separate and apart from any of its
own funds and general assets and shall establish and maintain in the name of the
Indenture Trustee one or more accounts (such account or accounts, the "Custodial
Account") in accordance with this Section 3.04, held in trust for the benefit of
the Indenture Trustee and the Noteholders. The Indenture Trustee shall not be
responsible for reconciling the Custodial Account.
(b) DEPOSITS TO THE CUSTODIAL ACCOUNT. The Servicer shall deposit in
the Custodial Account, in no event more than two Business Days after the
Servicer's receipt thereof, the following payments and collections received or
made by it subsequent to the Cut-off Date with respect to the Loans or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including principal
prepayments, on the Loans and REO Properties;
(ii) all payments on account of interest on the Loans and REO
Properties adjusted to the Net Loan Rate;
(iii) all Insurance Proceeds and Net Liquidation Proceeds
(other than proceeds to be held in the Escrow Account and applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicing Standard), Subsequent
Recoveries and any amounts received in respect of the rental of any REO
Property prior to disposition thereof;
(iv) all proceeds related to the purchase, substitution or
repurchase of any Loan or REO Property pursuant to a Loan Purchase
Agreement;
(v) any amounts required to be deposited by the Servicer
pursuant to Section 3.09 in connection with the deductible clause in
any blanket hazard insurance policy, such deposit being made from the
Servicer's own funds, without reimbursement therefor;
(vi) any amounts required to be deposited by the Servicer
pursuant to Section 3.06 in connection with any losses realized on
Permitted Investments with respect to funds held in the Custodial
Account;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Eligible Substitute Loans (for
purposes of this clause (vii), the Cut-off Date with respect to any
Eligible Substitute Loan shall be deemed to be the date of
substitution); and
(viii) any amounts required to be deposited by the Servicer
pursuant to Section 5.01, Section 5.02 or otherwise under this
Servicing Agreement.
The foregoing requirements for deposit to the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of Foreclosure Profits, late
payment charges, assumption fees, insufficient funds charges, modification fees
and other ancillary fees need not be deposited by the Servicer in the Custodial
Account and shall upon collection, belong to the Servicer as additional
compensation for its servicing activities. In the event the Servicer shall
deposit in the Custodial Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Custodial Account, any
provision herein to the contrary notwithstanding.
(c) ESCROW ACCOUNT. The Servicer shall segregate and hold all funds
collected and received pursuant to each Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain in the name of the Indenture Trustee one or more accounts
(such account or accounts, the "ESCROW ACCOUNt") held in trust for the benefit
of the Issuer, the Noteholders and the Indenture Trustee.
(d) DEPOSITS TO THE ESCROW ACCOUNT. The Servicer shall deposit or cause
to be deposited in the clearing account (which account must be an Eligible
Account) in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Servicer's receipt
thereof, and shall thereafter deposit in the Escrow Account, in no event more
than two Business Days after the deposit of such funds into the clearing
account, as and when received or as otherwise required hereunder, and retain
therein:
(i) all amounts constituting taxes, and/or fire and hazard
insurance premiums escrowed by the Mortgagor with the mortgagee
pursuant to a voluntary escrow agreement related to any Loan
(collectively, "ESCROW PAYMENTS") collected on account of the Loans,
for the purpose of effecting timely payment of any such items as
required under the terms of this Servicing Agreement; and
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property.
(e) Reserved.
(f) Reserved.
(g) SERVICER TRANSFER OF FUNDS TO THE NOTE ACCOUNt. With respect to
each Payment Date, the Servicer shall deliver to the Indenture Trustee in
immediately available funds for deposit in the Note Account by 1:00 p.m. (New
York time) on the ___ day of each calendar month prior to such Payment Date or
if such ___ day is not a Business Day, the Business Day immediately succeeding
such ___ day (the "SERVICER REMITTANCE DATe"), all amounts then on deposit in
the Custodial Account minus amounts that represent:
(i) Monthly Payments on the Loans received from a Mortgagor on
or prior to the Determination Date but due during any Due Period
subsequent to the related Due Period,
(ii) principal prepayments on the Mortgage Loans received
after the related Prepayment Period (together with any interest
payments received with such principal prepayments to the extent they
represent the payment of interest accrued on the Loans during a period
subsequent to the end of the prior calendar month),
(iii) Net Liquidation Proceeds, Insurance Proceeds and
Subsequent Recoveries received in respect of the Mortgage Loans after
the related Prepayment Period,
(iv) amounts reimbursable or payable to the Issuer, the
Servicer, the Indenture Trustee, the Seller, the Originator or any
Subservicer pursuant to this Servicing Agreement, and
(v) amounts deposited in the Custodial Account in error.
In addition, the Servicer shall deliver to the Indenture Trustee from
time to time as required by this Servicing Agreement, for deposit and the
Indenture Trustee shall so deposit, in the Note Account:
(i) any P&I Advances, as required pursuant to Section 5.01;
(ii) any amounts required to be deposited pursuant to Section
3.13 in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Loans and REO Properties pursuant to Section 3.16 and Section 8.08;
(iv) any Compensating Interest as required pursuant to Section
5.02;
(v) [reserved]; and
(vi) any amounts required to be paid by the Servicer pursuant
to Section 3.06 in connection with any losses realized on Permitted
Investments with respect to funds held in the Custodial Account.
Funds held in the Custodial Account pursuant to Section 3.04(b) may at
any time be delivered by the Servicer to the Indenture Trustee for deposit into
the Note Account and for all purposes of this Servicing Agreement shall be
deemed to be a part of the Custodial Account until the Business Day prior to the
Payment Date; provided, however, that the Indenture Trustee shall have the sole
authority to withdraw any funds held pursuant to this paragraph. In the event
the Servicer shall deliver to the Indenture Trustee for deposit in the Note
Account any amount not required to be deposited therein, it may at any time
request that the Indenture Trustee withdraw such amount from the Note Account
and remit to it any such amount, any provision herein to the contrary
notwithstanding.
(h) INVESTMENT OF ACCOUNT FUNDS. Funds on deposit in the Custodial
Account, any REO Account and any Escrow Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.06. Any
investment earnings or interest paid on funds deposited in the Custodial
Account, any REO Account and any Escrow Account (subject to Section 3.05(b))
shall accrue to the benefit of the Servicer.
(i) CREATION, LOCATION AND SUBSEQUENT TRANSFERS OF ACCOUNTS. Each
account created pursuant to this Servicing Agreement must be an Eligible
Account. On or prior to the Closing Date, the Servicer and the Indenture Trustee
shall give notice, to each other, and the Issuer of the location of any account
created by it pursuant to this Servicing Agreement or the Indenture. From time
to time, the Servicer and the Indenture Trustee may each transfer any account
created by it to a different depository institution provided that upon such
transfer the written notice is provided to all other parties listed in the
preceding sentence.
In order to comply with its duties under the U.S.A. Patriot Act of
2001, the Indenture Trustee shall obtain and verify certain information and
documentation from the owners of the accounts that the Indenture Trustee
establishes pursuant to this Servicing Agreement or the Indenture including, but
not limited to, each account owner's name, address, and other identifying
information.
Section 3.05. PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT, ESCROW
ACCOUNT.
(a) CUSTODIAL ACCOUNT. The Servicer may, from time to time, withdraw
from the Custodial Account for the following purposes:
(i) to remit to the Indenture Trustee for deposit in the Note
Account the amounts required to be so remitted pursuant to Section
3.04(g) or permitted to be so remitted pursuant to the last paragraph
of Section 3.04(g);
(ii) subject to Section 3.12(c), to reimburse itself for (a)
any unpaid Servicing Fees, (b) any unreimbursed Servicing Advances and
(c) any xxxxxxxxxxxx X&X Advances, the Servicer's right to reimburse
itself pursuant to this subclause (ii) being limited to any collections
on the Loans which represent late recoveries of the payments for which
the P&I Advances or Servicing Advances were made, Net Liquidation
Proceeds, Subsequent Recoveries and Insurance Proceeds received on the
related Loan and any amounts received in respect of the rental of the
related REO Property prior to the disposition thereof that represent
payments of principal and/or interest respecting which any such advance
was made;
(iii) to reimburse itself for (a) any unpaid Servicing Fees to
the extent not recoverable under Section 3.05(a)(ii), (b) any unpaid
P&I Advances or Servicing Advances that have been deemed Nonrecoverable
Advances or Nonrecoverable Servicing Advances and (c) to reimburse
itself for any P&I Advances previously made from amounts held from time
to time in the Custodial Account that are not then required to be
distributed, including upaid P&I Advances on Loans modified pursuant to
Section 3.02 where (x) such P&I Advance is added to the unpaid
Principal Balance of such Loan or (y) a portion of the unpaid Principal
Balance of such Loan has been forgiven (provided that such amounts must
be deposited into the Custodial Account prior to the next Payment
Date);
(iv) to pay to itself any Foreclosure Profits to the extent
not otherwise retained;
(v) to reimburse itself for any amounts paid pursuant to
Section 3.12(b) (and not otherwise previously reimbursed);
(vi) to pay to itself as servicing compensation any interest
earned on funds in the Custodial Account;
(vii) to reimburse itself for expenses incurred by or
reimbursable to the Servicer pursuant to Section 6.03;
(viii) reserved;
(ix) to reimburse the Servicer for enforcement expenses
reasonably incurred in respect of the breach or defect giving rise to
the purchase obligation under Section 2.03, including any expenses
arising out of the enforcement of the purchase obligation;
(x) to pay to the Servicer, the Seller or the Originator, as
the case may be, with respect to each Loan that has previously been
purchased or replaced pursuant to Section 2.03 or Section 3.16(a) all
amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(xi) to transfer funds in the Custodial Account maintained at
a particular depository to the Custodial Account maintained at a
different depository, pursuant to Section 3.04(i);
(xii) to withdraw any funds deposited therein in error; and
(xiii) to clear and terminate the Custodial Account upon the
termination of this Servicing Agreement.
The Servicer shall keep and maintain separate accounting, on a
Loan by Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account, to the extent held by or on behalf of it, pursuant to
subclauses (ii), (iii), (iv), (v), (vi), (vii), (x) and (xi) above.
(b) ESCROW ACCOUNT. The Servicer may, from time to time, withdraw from
the Escrow Account for the following purposes:
(i) to effect payments of ground rents, taxes, assessments,
water rates, hazard insurance premiums and comparable items;
(ii) to reimburse the Servicer for any Servicing Advance made
by the Servicer with respect to a related Loan but only from amounts
received on the related Loan which represent late payments or late
collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be
determined to be overages;
(iv) for transfer to the Custodial Account in accordance with
the terms of this Servicing Agreement, including without limitation any
Insurance Proceeds;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Servicer, or to the Mortgagor to the extent
required by the related Loan or Applicable Regulations, any interest
paid on the funds deposited in the Escrow Account; and
(vii) to clear and terminate the Escrow Account on the
termination of this Servicing Agreement.
In the event the Servicer shall deposit in an Escrow Account any amount
not required to be deposited therein, it may at any time withdraw such amount
from such Escrow Account, any provision herein to the contrary notwithstanding.
As part of its servicing duties, the Servicer shall pay to the Mortgagor
interest on funds in the Escrow Account, to the extent required by the related
Loan or Applicable Regulations, and to the extent that interest earned on funds
in the Escrow Account is insufficient, shall pay such interest from its own
funds, without any reimbursement therefor. The Servicer may pay to itself any
excess interest on funds in the Escrow Account, to the extent such action is in
conformity with the Servicing Standard, is permitted by law and such amounts are
not required to be paid to Mortgagors or used for any of the other purposes set
forth above.
Section 3.06. INVESTMENT OF FUNDS IN THE CUSTODIAL ACCOUNT, THE ESCROW
ACCOUNT AND THE REO ACCOUNT.
(a) The Servicer may direct any depository institution maintaining the
Custodial Account, the Escrow Account (subject to Section 3.05(b)), and the REO
Account (for purposes of this Section 3.06, each an "Investment Account"), to
invest the funds in such Investment Account in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Servicing
Agreement, if a Person other than the Indenture Trustee is the obligor thereon,
and (ii) no later than the date on which such funds are required to be withdrawn
from such Investment Account pursuant to this Servicing Agreement, if the
Indenture Trustee is the obligor thereon. All such Permitted Investments shall
be held to maturity, unless payable on demand. Any investment of funds in an
Investment Account shall be made in the name of the Indenture Trustee (in its
capacity as such) or in the name of a nominee of the Indenture Trustee. The
Indenture Trustee shall be entitled to sole possession (except with respect to
investment direction of funds held in the Custodial Account, the Escrow Account,
and the REO Account) over each such investment and (except with respect to the
income on funds held in the Custodial Account, the Escrow Account and the REO
Account) the income thereon, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Indenture Trustee or its
agent, together with any document of transfer necessary to transfer title to
such investment to the Indenture Trustee or its nominee. In the event amounts on
deposit in an Investment Account are at any time invested in a Permitted
Investment payable on demand, the Indenture Trustee shall:
(i) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal
to the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(ii) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the Indenture Trustee
that such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the Investment
Account.
(b) All income in the nature of interest from the investment of funds
in the Custodial Account, Escrow Account (subject to Section 3.05(b)) and the
REO Account shall be for the benefit of the Servicer as compensation for the
Servicer's services pursuant to this Servicing Agreement. The Servicer shall
deposit in the Custodial Account, the Escrow Account, and the REO Account, as
applicable, from its own funds the amount of any loss incurred in respect of any
such Permitted Investment made with funds in such account immediately upon
realization of such loss.
Section 3.07. PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES.
With respect to each first lien Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of fire and hazard insurance coverage and, as to those
Loans subject to a voluntary escrow agreement, shall obtain, from time to time,
all bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date and
at a time appropriate for securing maximum discounts allowable, employing for
such purpose deposits of the Mortgagor in the Escrow Account which shall have
been estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage or Applicable Regulations.
The Servicer assumes full responsibility for the timely payment of all such
bills and shall effect timely payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make Servicing Advances from its own funds to effect
such payments.
To the extent that a Mortgage does not provide for Escrow Payments, the
Servicer (i) shall determine whether any such payments are made by the Mortgagor
in a manner and at a time that is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien and (ii)
shall ensure that all insurance required to be maintained on the Mortgaged
Property pursuant to this Servicing Agreement is maintained. If any such payment
has not been made and the Servicer receives notice of a tax lien with respect to
the Loan being imposed, the Servicer will, to the extent required to avoid loss
of the Mortgaged Property, advance or cause to be advanced funds necessary to
discharge such lien on the Mortgaged Property.
Section 3.08. MAINTENANCE OF HAZARD INSURANCE.
The Servicer shall cause to be maintained for each Loan fire insurance
with extended coverage on the related Mortgaged Property in an amount which is
at least equal to the least of (i) the current Principal Balance of such Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property in an amount which is
at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such property and (ii) the outstanding
Principal Balance of the related Loan, plus accrued interest at the Loan Rate
and related Servicing Advances (each measured at the time it became an REO
Property). The Servicer shall comply in the performance of this Servicing
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.05, if received in respect
of a Loan, or in the REO Account, subject to withdrawal pursuant to Section
3.13, if received in respect of an REO Property. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Noteholders, be added to the unpaid Principal
Balance of the related Loan, notwithstanding that the terms of such Loan so
permit. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property or REO Property is
at any time in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, the Servicer shall
cause to be maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the unpaid Principal
Balance of the related Loan, (ii) the maximum amount of such insurance available
for the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program) and (iii) the maximum insurable value of the
improvements which are part of the related Mortgaged Property.
Section 3.09. MAINTENANCE OF MORTGAGE BLANKET INSURANCE.
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of ___ or better in Best's
Key Rating Guide (or such other rating that is comparable to such rating)
insuring against hazard losses on all of the Loans, it shall conclusively be
deemed to have satisfied its obligations as set forth in the first two sentences
of Section 3.08, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of Section 3.08, and there shall
have been one or more losses which would have been covered by such policy,
deposit to the Custodial Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Loans, the
Servicer agrees to prepare and present, on behalf of itself, the Issuer, the
Indenture Trustee and the Noteholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
Section 3.10. FIDELITY BOND; ERRORS AND OMISSIONS INSURANCE.
The Servicer shall keep in force during the term of this Servicing
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Servicing
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of
the Loans. The Servicer shall also maintain a fidelity bond in the form and
amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx Mac. Upon
reasonable request, the Servicer shall provide the Indenture Trustee with copies
of any such insurance policies and fidelity bond. 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. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Indenture Trustee. The Servicer shall also cause each Subservicer to maintain a
policy of insurance covering errors and omissions and a fidelity bond which
would meet such requirements.
Section 3.11. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS.
The Servicer shall, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer is authorized to enter
into an assumption and modification agreement from or with the person to whom
such property has been conveyed or is proposed to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, to the extent permitted
by applicable state law, the Mortgagor remains liable thereon. In connection
with any assumption or substitution, the Servicer shall follow such practices
and procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other Loans serviced solely by it to minimize
the potential loss associated with such Loan. Any fee collected by the Servicer
in respect of an assumption or substitution of liability agreement shall be
retained by the Servicer as additional servicing compensation. In connection
with any such assumption, no material term of the Mortgage Note (including but
not limited to the related Loan Rate and the amount of the Monthly Payment) may
be amended or modified, except as otherwise required pursuant to the terms
thereof or otherwise permitted under Section 3.01. The Servicer shall notify the
Indenture Trustee and any respective Custodian that any such substitution or
assumption agreement has been completed by forwarding to the Indenture Trustee
or to such Custodian, as the case may be, the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Except as described in this paragraph, the Servicer
is not authorized to substitute one borrower for another in connection with any
Loan.
Notwithstanding the foregoing paragraph or any other provision of this
Servicing Agreement, the Servicer shall not be deemed to be in default, breach
or any other violation of its obligations hereunder by reason of any assumption
of a Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.11, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.12. REALIZATION UPON DEFAULTED LOANS.
(a) The Servicer shall, consistent with the Servicing Standard,
foreclose upon or otherwise comparably convert the ownership of properties
securing the Loans that come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.02. The Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that such
costs and expenses shall be recoverable as Servicing Advances by the Servicer as
contemplated in Section 3.05 and Section 3.13. The foregoing is subject to the
provision that: (i) in any case in which Mortgaged Property shall have suffered
damage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies required to be maintained pursuant
to Section 3.08, the Servicer shall not be required to expend its own funds
toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Loan after reimbursement to itself for such expenses and (ii) with
respect to any second lien Loan for which the related first lien Loan is not
included in the Trust Estate, if, after such Loan becomes 180 days or more
Delinquent and the Servicer, after making a Final Recovery Determination,
determines that a net recovery that would eliminate or reduce a Realized Loss by
more than an immaterial amount is not possible through foreclosure, such Loan
may be charged off and such Loan shall be treated as a Liquidated Loan giving
rise to a Realized Loss.
(b) Reserved.
(c) Certain of the Loans may become Delinquent after the Cut-off Date.
The Servicer may, in accordance with the Servicing Standard, either foreclose on
any such Loan or work out an agreement with the Mortgagor, which may involve
waiving or modifying certain terms of the Loan. In addition, the Servicer may
write-off any second lien Loan that is Delinquent by 180 days or more.
Section 3.13. TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
(a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Indenture Trustee, or its nominee, in trust for the benefit
of the Noteholders. Pursuant to the power of attorney granted in Section 3.01,
the Servicer is hereby authorized to transfer the title of any REO Property
taken in the name of the Indenture Trustee to a third party purchaser pursuant
to this Section 3.13 without further documentation of its authority as
attorney-in-fact for the Issuer, the Indenture Trustee on behalf of the
Noteholders. With respect to such of the Loans as come into and continue in
default, the Servicer will decide whether to (i) foreclose upon the Mortgaged
Properties securing such Loans, (ii) write off the unpaid principal balance of
the Loans as bad debt, (iii) take a deed in lieu of foreclosure, (iv) accept a
short sale (a payoff of the Loan for an amount less than the total amount
contractually owed in order to facilitate a sale of the Mortgaged Property by
the Mortgagor) or permit a short refinancing (a payoff of the Loan for an amount
less than the total amount contractually owed in order to facilitate refinancing
transactions by the Mortgagor not involving a sale of the Mortgaged Property),
(v) arrange for a repayment plan, (vi) agree to a modification in accordance
with this Servicing Agreement, or (vii) take an unsecured note, in connection
with a negotiated release of the lien of the Mortgage in order to facilitate a
settlement with the Mortgagor; in each case subject to the rights of any related
first lien holder; provided that in connection with the foregoing if the
Servicer has actual knowledge that any Mortgaged Property is affected by
hazardous or toxic wastes or substances and that the acquisition of such
Mortgaged Property would not be commercially reasonable, then the Servicer will
not cause the Issuer or the Indenture Trustee to acquire title to such Mortgaged
Property in a foreclosure or similar proceeding. In connection with such
decision, the Servicer shall follow such practices (including, in the case of
any default on a related senior mortgage loan, the advancing of funds to correct
such default if deemed to be appropriate by the Servicer) and procedures as it
shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities and the terms of this Servicing Agreement;
provided that the Servicer shall not be liable in any respect hereunder if the
Servicer is acting in connection with any such foreclosure or attempted
foreclosure which is not completed or other conversion in a manner that is
consistent with the provisions of this Servicing Agreement. The foregoing is
subject to the proviso that the Servicer shall not be required to expend its own
funds in connection with any foreclosure or attempted foreclosure which is not
completed or towards the correction of any default on a related senior mortgage
loan or restoration of any property unless it shall determine that such
expenditure will increase Net Liquidation Proceeds. In the event of a
determination by the Servicer that any such expenditure previously made pursuant
to this Section 3.13 will not be reimbursable from Net Liquidation Proceeds, the
Servicer shall be entitled to reimbursement of its funds so expended pursuant to
Section 3.05.
(b) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall establish and maintain with
respect to REO Properties an account held in trust for the Indenture Trustee for
the benefit of the Noteholders (the "REO ACCOUNT"), which shall be an Eligible
Account. The Servicer shall be permitted to allow the Custodial Account to serve
as the REO Account, subject to separate ledgers for each REO Property. The
Servicer shall be entitled to retain or withdraw any interest income paid on
funds deposited in the REO Account.
(c) The Servicer shall have full power and authority, subject only to
the specific requirements and prohibitions of this Servicing Agreement, to do
any and all things in connection with any REO Property as are consistent with
the manner in which the Servicer manages and operates similar property owned by
the Servicer or any of its Affiliates, all on such terms and for such period as
the Servicer deems to be in the best interests of the Issuer and the Noteholders
and appropriate to effect the prompt disposition and sale of the REO Property.
In connection therewith, the Servicer shall deposit, or cause to be deposited in
the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on Loans in connection with its
Loan servicing activities on a daily basis, and in no event more than one
Business Day after the Servicer's receipt thereof, and shall thereafter deposit
in the REO Account, in no event more than two Business Days after the deposit of
such funds into the clearing account, all revenues received by it with respect
to an REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of such REO Property including, without
limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
(iv) To the extent that amounts on deposit in the REO Account
with respect to an REO Property are insufficient for the purposes set
forth in clauses (i) through (iii) above with respect to such REO
Property, the Servicer shall advance from its own funds such amount as
is necessary for such purposes if, but only if, the Servicer would make
such advances if the Servicer owned the REO Property and if in the
Servicer's judgment, the payment of such amounts shall be recoverable
from the rental or sale of the REO Property.
(d) In addition to the withdrawals permitted under Section 3.13(c), the
Servicer may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself or any Subservicer unpaid Servicing Fees in respect
of the related Loan; and (ii) to reimburse itself or any Subservicer for
unreimbursed Servicing Advances and P&I Advances made in respect of such REO
Property or the related Loan. On the Servicer Remittance Date, the Servicer
shall withdraw from each REO Account maintained by it and deposit into the Note
Account in accordance with Section 3.04(g)(ii), the income from the related REO
Property received during the prior calendar month, net of any withdrawals made
pursuant to Section 3.13(c) or this Section 3.13(d).
(e) Subject to the time constraints set forth in Section 3.13(a)
(including the constraint that the Servicer hold and manage each REO Property
"solely for the purpose of its prompt disposition"), each REO disposition shall
be carried out by the Servicer at such price and upon such terms and conditions
as shall be normal and usual in its general servicing activities for similar
properties.
(f) The proceeds from the disposition of REO Property, net of any
amount required by law to be remitted to the Mortgagor under the related Loan
and net of any payment or reimbursement to the Servicer or any Subservicer as
provided above, shall be deposited in the Note Account in accordance with
Section 3.04(g)(ii) on the Servicer Remittance Date in the month following the
receipt thereof for distribution on the related Payment Date in accordance with
the Indenture.
Section 3.14. [Reserved].
Section 3.15. REPORTS OF FORECLOSURE AND ABANDONMENT OF MORTGAGED
PROPERTIES.
The Servicer shall file information returns with respect to the receipt
of mortgage interest received in a trade or business, reports of foreclosures
and abandonments of any Mortgaged Property and cancellation of indebtedness
income with respect to any Mortgaged Property as required by Sections 6050H,
6050J and 6050P of the Code, respectively. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by such Sections
6050H, 6050J and 6050P of the Code.
Section 3.16. OPTIONAL PURCHASE OF DEFAULTED LOANS.
The Servicer may, at its option, purchase a Loan which has become 90 or
more days Delinquent or for which the Servicer has accepted a deed in lieu of
foreclosure. Prior to purchase pursuant to this Section 3.16, the Servicer shall
be required to continue to make P&I Advances pursuant to Section 4.03. The
Servicer shall not use any procedure in selecting Loans to be repurchased which
is materially adverse to the interests of the Noteholders. The Servicer, as
applicable, shall purchase such Delinquent Loan at a price equal to the
Repurchase Price of such Loan. Any such purchase of a Loan pursuant to this
Section 3.16 shall be accomplished by remittance to the Servicer for deposit in
the Custodial Account of the amount of the Repurchase Price. The Issuer and the
Indenture Trustee (or the Custodian on behalf of the Indenture Trustee) shall
immediately effectuate the conveyance of such Delinquent Loan to the Servicer,
as applicable, to the extent necessary, as requested, and the Issuer and the
Indenture Trustee (or the Custodian on behalf of the Indenture Trustee) shall
promptly deliver all documentation to the Servicer as applicable, and as shall
be necessary to vest in the Servicer title to any Loan or related REO Property
released pursuant hereto.
The Servicer may, at its option, repurchase an REO Property. Prior to
repurchase pursuant to this Section 3.16, the Servicer shall be required to
continue to make monthly P&I Advances pursuant to Section 5.01. The Servicer
shall purchase such REO Property at its fair market value as determined in good
faith by the Servicer plus any unreimbursed Servicing Advances and P&I Advances.
Any such repurchase of an REO Property pursuant to this Section 3.16 shall be
accomplished by delivery to the Indenture Trustee for deposit in the Note
Account of the amount of the Repurchase Price. The Indenture Trustee shall
immediately effectuate the conveyance of such REO Property to the Servicer to
the extent necessary, including the prompt delivery of all documentation to the
Servicer.
Section 3.17. INDENTURE TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE
FILES.
(a) Upon the payment in full of any Loan, or the receipt by the
Servicer of a notification that payment in full shall be escrowed in a manner
customary for such purposes, the Servicer shall promptly notify the Indenture
Trustee and any related Custodian by a certification of a Servicing Officer in
the form of Exhibit C or such other form supplied by the Servicer provided that
it does not differ from the substantive content of Exhibit C (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Custodial Account pursuant to Section 3.04(b) have been or
shall be so deposited) and shall request delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Indenture Trustee or such
Custodian, as the case may be, shall promptly release (and in no event more than
____ Business Days thereafter) the related Mortgage File to the Servicer. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Custodial Account or the Note Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Loan, including, for this purpose, collection under any
insurance policy relating to the Loans, the Indenture Trustee and any related
Custodian shall, upon request of the Servicer and delivery to the Indenture
Trustee or such Custodian, as the case may be, of a Request for Release in the
form of Exhibit C or such other form supplied by the Servicer provided that it
does not differ from the substantive content of Exhibit C, release the related
Mortgage File to the Servicer, and the Indenture Trustee shall, at the direction
of the Servicer, execute such documents as shall be necessary to the prosecution
of any such proceedings and the Servicer shall retain such Mortgage File in
trust for the benefit of the Securityholders. Such Request for Release shall
obligate the Servicer to return each and every document previously requested
from the Mortgage File to the Indenture Trustee or to such Custodian when the
need therefor by the Servicer no longer exists, unless the Loan has been charged
off or liquidated and the Liquidation Proceeds relating to the Loan have been
deposited in the Custodial Account or the Mortgage File or such document has
been delivered to an attorney, or to a public Indenture Trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Servicer has delivered to the Indenture
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Loan was charged off or liquidated and that
all amounts received or to be received in connection with such liquidation that
are required to be deposited into the Custodial Account have been so deposited,
or that such Loan has become an REO Property, upon request, a copy of the
Request for Release shall be released by the Indenture Trustee or such Custodian
to the Servicer.
(c) Upon written certification of a Servicing Officer, the Indenture
Trustee shall execute and deliver to the Servicer any court pleadings, requests
for Indenture Trustee's sale or other documents reasonably necessary to the
foreclosure or Indenture Trustee's sale in respect of a Mortgaged Property or to
any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity. Each such certification shall include a request
that such pleadings or documents be executed by the Indenture Trustee and a
statement as to the reason such documents or pleadings are required and that the
execution and delivery thereof by the Indenture Trustee shall not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or Indenture Trustee's sale.
(d) The Indenture Trustee (or the Custodian on behalf of the Indenture
Trustee) and the Servicer may mutually agree on policies and procedures
(commercially reasonable in nature) to allow the submission of any and all
requests for the release of a Mortgage File electronically with a digital
signature or other identifier to designate the Servicing Officer of the Servicer
requesting such collateral.
Section 3.18. SERVICING COMPENSATION.
As compensation for the activities of the Servicer hereunder, the
Servicer shall be entitled to the Servicing Fee with respect to each Loan
payable solely from payments of interest in respect of such Loan, subject to
Section 5.02. In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of Insurance Proceeds, Subsequent Recoveries or Liquidation
Proceeds to the extent permitted by Section 3.05(a)(ii), out of general funds in
the Custodial Account to the extent permitted by Section 3.05(a) and out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.13. The right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Servicer's responsibilities and obligations under this Servicing Agreement.
Additional servicing compensation in the form of Foreclosure Profits,
assumption fees, late payment charges, insufficient funds fees, customary real
estate referral fees, reconveyance fees and other similar fees and charges shall
be retained by the Servicer only to the extent such amounts, fees or charges are
received by the Servicer. The Servicer shall also be entitled pursuant to
Section 3.05(a)(vi) to withdraw from the Custodial Account, pursuant to Section
3.04(h) to withdraw from any Escrow Account and pursuant to Section 3.13(b) to
withdraw from any REO Account, as additional servicing compensation, interest or
other income earned on deposits therein, subject to Section 3.06. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including premiums for the insurance required by
Section 3.08, Section 3.09 and Section 3.10, to the extent such premiums are not
paid by the related Mortgagors or by a Subservicer and servicing compensation of
each Subservicer) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
Section 3.19. STATEMENT AS TO COMPLIANCE.
The Servicer shall deliver to the Indenture Trustee, the Issuer and
each Rating Agency on or before March 15th of each calendar year commencing in
____, an Officers' Certificate, in a form similar to Exhibit D attached hereto
agreeable to the parties hereto, stating, as to each signatory thereof, that (i)
a review of the activities of the Servicer during the preceding calendar year
and of performance under this Servicing Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all of its obligations under this
Servicing Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of any such statement shall be
provided by the Indenture Trustee to any Noteholder and to any Person identified
to the Indenture Trustee as a prospective transferee of a Certificate, upon the
request and at the expense of the requesting party, provided that such statement
is delivered by the Servicer to the Indenture Trustee.
Section 3.20. INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
Not later than March 15th of each calendar year commencing in _____,
the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer and the
Issuer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
assertion that the Servicer has complied with either the servicing criteria as
set forth in Item 1122 of Regulation AB or certain minimum residential Loan
servicing standards identified in the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America,
with respect to the servicing of residential Loans during the most recently
completed calendar year and (ii) on the basis of an examination conducted by
such firm in accordance with standards established by the American Institute of
Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. In rendering its report such firm may rely, as to matters
relating to the direct servicing of residential Loans by Subservicers, upon
comparable reports of firms of independent certified public accountants rendered
on the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those Subservicers.
Immediately upon receipt of such report, the Servicer shall furnish a copy of
such report to the Indenture Trustee, the Issuer and each Rating Agency. Copies
of such statement shall be provided by the Indenture Trustee to any Noteholder
upon request at the expense of the requesting party, provided that such
statement is delivered by the Servicer to the Indenture Trustee. In the event
such firm of independent certified public accountants requires the Indenture
Trustee or the Issuer to agree to the procedures performed by such firm, the
Servicer shall direct the Indenture Trustee in writing to so agree; it being
understood and agreed that the Indenture Trustee shall deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and the
Indenture Trustee has not made any independent inquiry or investigation as to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
Section 3.21. ACCESS TO CERTAIN DOCUMENTATION.
The Servicer shall provide to the Office of Thrift Supervision, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Securityholder, access to the documentation
regarding the Loans required by applicable laws and regulations. Such access
shall be afforded without charge, but only upon reasonable request and during
normal business hours at the offices of the Servicer designated by it. In
addition, access to the documentation regarding the Loans shall be provided to
the Indenture Trustee upon reasonable request during normal business hours at
the offices of the Servicer designated by it at the expense of the Person
requesting such access. In each case, access to any documentation regarding the
Loans may be conditioned upon the requesting party's acknowledgment in writing
of a confidentiality agreement reasonably satisfactory to the Servicer regarding
any information that is required to remain confidential under the
Xxxxx-Xxxxx-Xxxxxx Act of 1999. Nothing in this Section 3.21 shall limit the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the borrowers and the failure of the Servicer to
provide access as provided in this Section 3.21 as a result of such obligation
shall not constitute a breach of this Section 3.21.
ARTICLE IV
Servicing Certificate
Section 4.01. STATEMENTS TO SECURITYHOLDERS. (a) With respect to each
Payment Date, on the Business Day following the related Determination Date, the
Servicer shall forward to the Indenture Trustee the Loan information reasonably
available to the Servicer with respect to the Loans as the Indenture Trustee may
reasonably request in order for the Indenture Trustee to perform the
calculations necessary to prepare the statements contemplated by this Section
4.01 (the "Servicing Certificate"). The Indenture Trustee pursuant to Section
3.25 of the Indenture shall forward or cause to be forwarded by mail to each
Certificateholder, Noteholder, the Depositor, the Owner Trustee, the Certificate
Paying Agent and each Rating Agency, a statement setting forth the following
information as to the Notes and Certificates, to the extent applicable:
(i) the aggregate amount paid to Noteholders;
(ii) the amount of such distribution as principal to the
Noteholders;
(iii) the amount of such distribution as interest to the
Noteholders, separately stating the portion thereof in respect of
overdue accrued interest;
(iv) the number and Aggregate Loan Balance of the Loans as of
the end of the related Due Period;
(v) the number and aggregate Principal Balances of Loans (a)
as to which the Monthly Payment is Delinquent for 30 59 days, 60 89
days and 90 or more days, respectively, (b) that are foreclosed, (c)
that have become REO, and (d) that have been finally liquidated due to
being 180 days or more delinquent, in each case as of the end of the
related Due Period; provided, however, that such information will not
be provided on the statements relating to the first Payment Date;
(vi) the weighted average Loan Rate for the related Due
Period;
(vii) the Note Balance after giving effect to the distribution
of principal on such Payment Date;
(viii) the Certificate Distribution Amount immediately
following such Payment Date;
(ix) the aggregate Servicing Fees for the related Due Period;
(x) the Overcollateralization Amount and the
Overcollateralization Target Amount immediately following such Payment
Date;
(xi) the aggregate amount recovered during the related Due
Period consisting of all subsequent recoveries on any Loan that was 180
days or more delinquent.
In the case of information furnished pursuant to clauses (ii) and (iii)
above, the amounts shall be expressed as an aggregate dollar amount per Note or
Certificate, as applicable, with a $1,000 denomination.
The Servicer shall also forward to the Indenture Trustee any other
information reasonably requested by the Indenture Trustee necessary to make
distributions pursuant to Section 3.05 of the Indenture. Prior to the close of
business on the Business Day next succeeding each Determination Date, the
Servicer shall furnish a written statement to the Certificate Paying Agent and
the Indenture Trustee setting forth the aggregate amounts required to be
withdrawn from the Custodial Account and deposited into the Note Account on the
Business Day preceding the related Payment Date pursuant to Section 3.05. The
determination by the Servicer of such amounts shall, in the absence of obvious
error, be presumptively deemed to be correct for all purposes hereunder and the
Owner Trustee and Indenture Trustee shall be protected in relying upon the same
without any independent check or verification. In addition, upon the Issuer's
written request, the Servicer shall promptly furnish information reasonably
requested by the Issuer that is reasonably available to the Servicer to enable
the Issuer to perform its federal and state income tax reporting obligations.
Section 4.02. TAX REPORTING. So long as 100% of the Certificates are
owned by the same person, then no separate federal and state income tax returns
and information returns or reports will be filed with respect to the Issuer, and
the Issuer will be treated as an entity disregarded from the 100%
Certificateholder.
ARTICLE V
Advances; Compensating Interest
Section 5.01. ADVANCES.
(a) The amount of each advance (a "P&I ADVANCE") to be made by the
Servicer for any Payment Date shall equal, subject to Section 5.02, the sum of
(i) the aggregate amount of Monthly Payments (with each interest portion thereof
net of the related Servicing Fee), due on the related Due Date in respect of the
Loans (other than with respect to any Balloon Loan with a delinquent Balloon
Payment as described in clause (iii) below), which Monthly Payments were
delinquent as of the close of business on the related Determination Date, (ii)
with respect to each second-lien Mortgage Loan and REO Property (other than with
respect to any REO Property relating to a Balloon Loan with a Delinquent Balloon
Payment as described in clause (iv) below), which REO Property was acquired
during or prior to the related Prepayment Period and, as to which such REO
Property, disposition thereof did not occur during the related Prepayment
Period, an amount equal to the interest portion of the related Monthly Payment
net of the related Servicing Fee, (iii) with respect to each Balloon Loan with a
delinquent Balloon Payment, an amount equal to the assumed monthly principal and
interest payment (with each interest portion thereof net of the related
Servicing Fee) that would have been due on the related Due Date based on the
principal amortization schedule for such Balloon Loan assuming such Loan was not
a Balloon Loan, and (iv) with respect to each REO Property relating to a Balloon
Loan with a delinquent Balloon Payment, which REO Property was acquired during
or prior to the related Prepayment Period and, as to which REO Property,
disposition thereof did not occur during the related Prepayment Period, an
amount equal to the excess, if any, of the assumed monthly principal and
interest payment (with each interest portion thereof net of the related
Servicing Fee) that would have been due on the related Due Date based on the
principal amortization schedule for the related Balloon Loan assuming such
Mortgage Loan was not a Balloon Loan, over the net income from such REO Property
transferred to the Note Account pursuant to Section 3.13 for distribution on
such Payment Date.
On or before ____ New York time on the Servicer Remittance Date, the
Servicer shall remit in immediately available funds to the Indenture Trustee for
deposit in the Note Account an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Payment Date either (i) from its own funds, (ii) from the
Custodial Account, to the extent of funds held therein for future distribution
(in which case, it shall cause to be made an appropriate entry in the records of
the Custodial Account that amounts held for future distribution have been, as
permitted by this Section 5.01, used by the Servicer in discharge of any such
P&I Advance) or (iii) in the form of any combination of (i) and (ii) aggregating
the total amount of P&I Advances to be made by the Servicer with respect to the
Mortgage Loans and REO Properties. Any amounts held for future distribution used
by the Servicer to make a P&I Advance as permitted in the preceding sentence or
withdrawn by the Servicer as permitted in Section 3.05(a) in reimbursement of
P&I Advances previously made shall be appropriately reflected in the Servicer's
records and replaced by the Servicer by deposit in the Custodial Account on or
before any future Servicer Remittance Date to the extent that the Available
Distribution Amount for the related Payment Date (determined without regard to
P&I Advances to be made on the Servicer Remittance Date) shall be less than the
total amount that would be distributed to the Securityholders pursuant to the
Indenture on such Payment Date if such amounts held for future distributions had
not been so used to make P&I Advances. The Indenture Trustee shall provide
notice to the Servicer and the Issuer by telecopy by the close of business on
any Servicer Remittance Date in the event that the amount remitted by the
Servicer to the Indenture Trustee on such date is less than the P&I Advances
required to be made by the Servicer for the related Payment Date.
(b) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
5.02 below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a determination made by the Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered, except as otherwise provided in this Section.
(c) The Servicer shall also advance all customary, necessary and
reasonable "out-of-pocket" costs and expenses (including reasonable attorneys'
fees and expenses) in the performance of its servicing obligations in connection
with a default, delinquency or other unanticipated event, including, but not
limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, in respect of a particular Loan, (iii) the conservation,
management (including reasonable fees in connection therewith) and liquidation
of any REO Property and (iv) the performance of its obligations under Section
3.01, Section 3.04(d), Section 3.08, Section 3.12 and Section 3.13 (such
amounts, "SERVICING ADVANCES"). Servicing Advances shall also include any
reasonable "out-of-pocket" costs and expenses (including reasonable attorneys'
fees and expenses) incurred by the Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or assignments in
connection with any foreclosure in respect of any Loan to the extent not
recovered from the related Mortgagor or otherwise payable under this Servicing
Agreement.
(d) Notwithstanding anything herein to the contrary, no P&I Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
P&I Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance or Nonrecoverable Servicing Advance. The determination by the Servicer
that it has made a Nonrecoverable Advance or a Nonrecoverable Servicing Advance
or that any proposed P&I Advance or Servicing Advance, if made, would constitute
a Nonrecoverable Advance or Nonrecoverable Servicing Advance, respectively,
shall be evidenced by an Officers' Certificate of the Servicer delivered to the
Issuer and the Indenture Trustee.
Section 5.02. COMPENSATING INTEREST.
The Servicer shall deliver to the Indenture Trustee for deposit into
the Note Account on or before 1:00 p.m. New York time on the Servicer Remittance
Date from its own funds an amount ("COMPENSATING INTEREST") equal to the lesser
of (i) the aggregate of the Prepayment Interest Shortfalls for the related
Payment Date resulting solely from principal prepayments in full during the
related Prepayment Period and (ii) __% of the amount of its aggregate Servicing
Fee for the most recently ended calendar month. The Servicer shall not have the
right to reimbursement for any amounts remitted to the Indenture Trustee in
respect of Prepayment Interest Shortfalls. The Servicer shall not be obligated
to pay any amounts with respect to Principal Prepayments in part and Relief Act
Interest Shortfalls.
ARTICLE VI
The Servicer
Section 6.01. LIABILITY OF THE SERVICER. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Servicer herein.
Section 6.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICEr. Any corporation into which the Servicer may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any corporation succeeding to the business of the Servicer,
shall be the successor of the Servicer, 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.
The Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; provided that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
Loans similar to those in the Trust Estate, is reasonably satisfactory to the
Indenture Trustee (as pledgee of the Loans) and the Issuer, is willing to
service the Loans and executes and delivers to the Indenture Trustee and the
Issuer an agreement, in form and substance reasonably satisfactory to the
Indenture Trustee and the Issuer, which contains an assumption by such Person of
the due and punctual performance and observance of each covenant and condition
to be performed or observed by the Servicer under this Servicing Agreement;
provided further that each Rating Agency's rating of the Securities in effect
immediately prior to such assignment and delegation will not be qualified,
reduced, or withdrawn as a result of such assignment and delegation (as
evidenced by a letter to such effect from each Rating Agency); and provided
further that the Owner Trustee receives an Opinion of Counsel to the effect that
such assignment or delegation shall not cause the Owner Trust to be treated as a
corporation for federal or state income tax purposes.
Section 6.03. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Issuer, the Owner Trustee,
the Indenture Trustee or the Securityholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, provided, however, that this provision shall not protect
the Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence in
the performance of its duties hereunder or by reason of its reckless disregard
of its obligations and duties hereunder. The Servicer and any director or
officer or employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer and any director or
officer or employee or agent of the Servicer shall be indemnified by the Issuer
and held harmless against any loss, liability or expense incurred in connection
with any legal action relating to this Servicing Agreement or the Securities,
other than any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder or by reason of its reckless disregard of its obligations and duties
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Loans in accordance with this Servicing Agreement, and which in its
opinion may involve it in any expense or liability; provided, however, that the
Servicer may in its sole discretion undertake any such action which it may deem
necessary or desirable in respect of this Servicing Agreement, and the rights
and duties of the parties hereto and the interests of the Securityholders. In
such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Issuer, and the Servicer shall be entitled to be reimbursed therefor. The
Servicer's right to indemnity or reimbursement pursuant to this Section 6.03
shall survive any resignation or termination of the Servicer pursuant to Section
6.04 or 7.01 with respect to any losses, expenses, costs or liabilities arising
prior to such resignation or termination (or arising from events that occurred
prior to such resignation or termination).
Section 6.04. SERVICER NOT TO RESIGN. Subject to the provisions of
Section 6.02, the Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Servicing Agreement or (ii) upon satisfaction of the following conditions: (a)
the Servicer has proposed a successor servicer to the Issuer and the Indenture
Trustee in writing and such proposed successor servicer is reasonably acceptable
to the Issuer and the Indenture Trustee; and (b) each Rating Agency shall have
delivered a letter to the Issuer and the Indenture Trustee prior to the
appointment of the successor servicer stating that the proposed appointment of
such successor servicer as Servicer hereunder will not result in the reduction
or withdrawal of the then current rating of the Securities; provided, however,
that no such resignation by the Servicer shall become effective until such
successor servicer or, in the case of (i) above, the Indenture Trustee, as
pledgee of the Loans, shall have assumed the Servicer's responsibilities and
obligations hereunder or the Indenture Trustee, as pledgee of the Loans, shall
have designated a successor servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive the
resignation or termination of the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Indenture Trustee.
Section 6.05. SUBSERVICING AGREEMENTS BETWEEN THE SERVICER AND
SUBSERVICERS.
(a) In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those with which the Servicer complies pursuant to Section 3.01.
Such delegation shall not relieve the Servicer of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04.
(b) The Servicer may enter into Subservicing Agreements (provided that
such agreements would not result in a withdrawal or a downgrade by any Rating
Agency of the ratings on any Class of Notes) with Subservicers, for the
servicing and administration of the Loans. Each Subservicer shall be (i)
authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, (ii) an institution approved as
a mortgage loan originator by the Federal Housing Administration or an
institution the deposit accounts in which are insured by the FDIC and (iii) a
Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer. Each Subservicing
Agreement must impose on the Subservicer requirements conforming to the
provisions set forth in Section 6.07 and provide for servicing of the Loans
consistent with the terms of this Agreement. The Servicer shall examine each
Subservicing Agreement and shall be familiar with the terms thereof. The terms
of any Subservicing Agreement shall not be inconsistent with any of the
provisions of this Agreement. The Servicer and the Subservicers may enter into
and make amendments to the Subservicing Agreements or enter into different forms
of Subservicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of this
Agreement, and that no such amendment or different form shall be made or entered
into which could be reasonably expected to be materially adverse to the
interests of the Issuer or the Noteholders, without the consent of the Majority
Noteholders. Any variation without the consent of the Majority Noteholders from
the provisions set forth in Section 6.07, provisions relating to insurance in
Section 3.10 or priority requirements of Subservicing Accounts, or credits and
charges to the Subservicing Accounts or the timing and amount of remittances by
the Subservicers to the Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Servicer shall deliver to the
Indenture Trustee and the Issuer copies of all Subservicing Agreements, and any
amendments or modifications thereof, promptly upon the Servicer's execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, the Servicer shall
enforce the obligations of each Subservicer under the related Subservicing
Agreement, including, without limitation, any obligation to make advances in
respect of delinquent payments as required by a Subservicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Loans. The Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement, to the extent, if any, that
such recovery exceeds all amounts due in respect of the related Loans or (ii)
from a specific recovery of costs, expenses or attorneys' fees against the party
against whom such enforcement is directed.
Section 6.06. SUCCESSOR SUBSERVICERS.
The Servicer shall be entitled to terminate any Subservicing Agreement
and the rights and obligations of any Subservicer pursuant to any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer, all servicing
obligations of such Subservicer shall be assumed simultaneously by the Servicer
without any act or deed on the part of such Subservicer or the Servicer, and the
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Subservicing Agreement with a successor Subservicer which qualifies under
Section 6.05.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Indenture Trustee without fee, in
accordance with the terms of this Servicing Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to a Servicing Default).
Section 6.07. SUBSERVICING ACCOUNTS.
In those cases where a Subservicer is servicing a Loan pursuant to a
Subservicing Agreement, the Subservicer shall be required to establish and
maintain one or more accounts (collectively, the "SUBSERVICING ACCOUNT"). The
Subservicing Account shall be an Eligible Account. The Subservicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Subservicer's receipt thereof, all proceeds
of Loans received by the Subservicer less its servicing compensation to the
extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Custodial Account or remit such
proceeds to the Servicer for deposit in the Custodial Account not later than two
Business Days after the deposit of such amounts in the Subservicing Account. For
purposes of this Servicing Agreement, the Servicer shall be deemed to have
received payments on the Loans when the Subservicer receives such payments.
Section 6.08. RIGHTS OF THE DEPOSITOR IN RESPECT OF THE SERVICER.
The Servicer shall afford (and any Subservicing Agreement shall provide
that each Subservicer shall afford) the Issuer and the Indenture Trustee, upon
reasonable advance notice in writing, during normal business hours at the office
designated by the Servicer, access to all records maintained by the Servicer
(and any such Subservicer) in respect of the Servicer's rights and obligations
with respect to the Loans hereunder and access to officers of the Servicer (and
those of any such Subservicer) responsible for such obligations. To the extent
such information is not otherwise available to the public, neither the Issuer
nor the Indenture Trustee shall disseminate any information obtained pursuant to
the preceding sentence without the Servicer's (or any such Subservicer's)
written consent, except as required pursuant to this Servicing Agreement or to
the extent that it is appropriate to do so (i) in working with legal counsel,
auditors, taxing authorities or other governmental agencies, rating agencies or
reinsurers or (ii) pursuant to any law, rule, regulation, order, judgment, writ,
injunction or decree of any court or governmental authority having jurisdiction
over the Issuer or the Indenture Trustee and in either case, the Issuer or the
Indenture Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Issuer may,
but is not obligated to, enforce the obligations of the Servicer under this
Servicing Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Servicer under this
Servicing Agreement or exercise the rights of the Servicer under this Servicing
Agreement; provided that the Servicer shall not be relieved of any of its
obligations under this Servicing Agreement by virtue of such performance by the
Issuer or its designee. The Issuer shall not have any responsibility or
liability for any action or failure to act by the Servicer and is not obligated
to supervise the performance of the Servicer under this Servicing Agreement or
otherwise.
Section 6.09. LIABILITY OF THE SERVICER.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Servicing Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the Servicer shall remain obligated and primarily liable to the
Issuer, the Indenture Trustee, the Depositor, the Seller, the Originator and the
Securityholders for the servicing and administering of the Loans in accordance
with the provisions of Section 3.01 without diminution of such obligation or
liability by virtue of such Subservicing Agreements or arrangements or by virtue
of indemnification from the Subservicer and to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Loans. The Servicer shall be entitled to enter into any
agreement with a Subservicer for indemnification of the Servicer by such
Subservicer and nothing contained in this Servicing Agreement shall be deemed to
limit or modify such indemnification.
Section 6.10. ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY
INDENTURE TRUSTEE.
In the event the Servicer shall for any reason no longer be the
Servicer (including termination due to a Servicing Default), the Indenture
Trustee or its designee shall thereupon assume (or cause its designee or the
successor Servicer for the Indenture Trustee appointed pursuant to Section 7.02
to assume) all of the rights and obligations of the Servicer under each
Subservicing Agreement that the Servicer may have entered into, unless the
Indenture Trustee elects to terminate any Subservicing Agreement in accordance
with its terms as provided in Section 6.06. Upon such assumption, the Indenture
Trustee, its designee or the successor servicer for the Indenture Trustee
appointed pursuant to Section 7.02 shall be deemed, subject to Section 6.06, to
have assumed all of the Servicer's interest therein and to have replaced the
Servicer as a party to each Subservicing Agreement to the same extent as if each
Subservicing Agreement had been assigned to the assuming party, except that (i)
the Servicer shall not thereby be relieved of any liability or obligations under
any Subservicing Agreement and (ii) none of the Indenture Trustee, its designee
or any successor Servicer shall be deemed to have assumed any liability or
obligation of the Servicer that arose before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Indenture
Trustee, deliver to the assuming party all documents and records relating to
each Subservicing Agreement and the Loans then being serviced and an accounting
of amounts collected and held by or on behalf of it, and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.
ARTICLE VII
Default
Section 7.01. SERVICING DEFAULT. If any one of the following events
("SERVICING DEFAULT") shall occur and be continuing:
(i) Any failure by the Servicer to deposit in the Custodial
Account or Note Account any deposit required to be made under the terms
of this Servicing Agreement (other than a P&I Advance required to be
made from its own funds on any Servicer Remittance Date pursuant to
Section 5.01) which continues unremedied for a period of three Business
Days after the date upon which written notice of such failure shall
have been given to the Servicer by the Issuer or the Indenture Trustee;
or
(ii) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of
the Servicer set forth in the Securities or in this Servicing
Agreement, which failure, in each case, materially and adversely
affects the interests of Securityholders and which continues unremedied
for a period of 45 days after the date on which written notice of such
failure, requiring the same to be remedied, and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the
Servicer by the Issuer or the Indenture Trustee; or
(iii) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a Indenture Trustee, conservator,
receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order undischarged or unstayed and in effect for a period of 60
consecutive days; or
(iv) The Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its property,
or a decree or order of a court, agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding up or liquidation of its affairs, shall have been
entered against the Servicer and such decree or order shall have
remained in force undischarged, unbonded or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(v) any failure of the Servicer to make any P&I Advance on any
Servicer Remittance Date required to be made from its own funds
pursuant to Section 5.01 which continues unremedied until ___ New York
time on the Business Day immediately preceding the Payment Date.
Then, and in every such case, so long as a Servicing Default shall not have been
remedied by the Servicer, either the Issuer or the Indenture Trustee, by notice
then given in writing to the Servicer shall terminate all of the rights and
obligations of the Servicer as servicer under this Servicing Agreement other
than its right to receive servicing compensation and expenses for servicing the
Loans hereunder during any period prior to the date of such termination and the
Issuer or the Indenture Trustee, may exercise any and all other remedies
available at law or equity. Any such notice to the Servicer shall also be given
to each Rating Agency and the Issuer. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Servicing Agreement, whether with respect to the Securities or the Loans or
otherwise, shall, subject to Section 7.02 of this Servicing Agreement, pass to
and be vested in the Indenture Trustee, pursuant to and under this Section 7.01;
and, without limitation, the Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney in fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of each Loan and related documents, or otherwise. The Servicer
agrees to cooperate with the Indenture Trustee in effecting the termination of
the responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to the Indenture Trustee for the administration by it
of all cash amounts relating to the Loans that shall at the time be held by the
Servicer and to be deposited by it in the Custodial Account, or that have been
deposited by the Servicer in the Custodial Account or thereafter received by the
Servicer with respect to the Loans. All reasonable costs and expenses
(including, but not limited to, attorneys' fees) incurred in connection with
amending this Servicing Agreement to reflect such succession as Servicer
pursuant to this Section 7.01 shall be paid by the predecessor Servicer (or if
the predecessor Servicer is the Indenture Trustee, the initial Servicer) upon
presentation of reasonable documentation of such costs and expenses.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a payment on a Loan which was due prior to the notice terminating the
Servicer's rights and obligations hereunder and received after such notice, that
portion to which the Servicer would have been entitled pursuant to Sections 3.05
and 3.18 as well as its Servicing Fee in respect thereof, and any other amounts
payable to the Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 7.01(i) or under Section 7.01(ii) after the applicable grace
periods specified in such Sections, shall not constitute a Servicing Default if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of God
or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes. The preceding sentence shall not relieve
the Servicer from using reasonable efforts to perform its respective obligations
in a timely manner in accordance with the terms of this Servicing Agreement and
the Servicer shall provide the Indenture Trustee and the Securityholders with
notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations. The Servicer shall immediately notify the
Indenture Trustee and the Owner Trustee in writing of any Servicing Default.
Section 7.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a)
On and after the time the Servicer receives a notice of termination pursuant to
Section 7.01 or sends a notice pursuant to Section 6.04, the Indenture Trustee
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Servicing Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof. Nothing in this Servicing Agreement or in the Owner Trust Agreement
shall be construed to permit or require the Indenture Trustee to (i) be
responsible or accountable for any act or omission of the Servicer prior to the
issuance of a notice of termination hereunder, (ii) require or obligate the
Indenture Trustee, in its capacity as successor Servicer, to purchase,
repurchase or substitute any Loan, (iii) fund any losses on any Permitted
Investment directed by any other Servicer or (iv) be responsible for the
representations and warranties of the Servicer. As compensation therefor, the
Indenture Trustee shall be entitled to such compensation as the Servicer would
have been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Indenture Trustee is unwilling to act as
successor Servicer, or (ii) if the Indenture Trustee is legally unable so to
act, the Indenture Trustee may (in the situation described in clause (i)) or
shall (in the situation described in clause (ii)) appoint or petition a court of
competent jurisdiction to appoint any established housing and home finance
institution, bank or other Loan or home equity loan servicer having a net worth
of not less than $10,000,000 as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder; provided that the appointment of any such successor
Servicer will not result in the qualification, reduction or withdrawal of the
ratings assigned to the Securities by the Rating Agencies. Pending appointment
of a successor to the Servicer hereunder, unless the Indenture Trustee is
prohibited by law from so acting, the Indenture Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Loans in an amount equal to the compensation which the Servicer
would otherwise have received pursuant to Section 3.18 (or such lesser
compensation as the Indenture Trustee and such successor shall agree). The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Servicing Agreement prior
to its termination as Servicer (including, without limitation, the obligation to
purchase Loans pursuant to Section 3.01 or to pay any deductible under an
insurance policy pursuant to Section 3.04), nor shall any successor Servicer be
liable for any acts or omissions of the predecessor Servicer or for any breach
by such Servicer of any of its representations or warranties contained herein or
in any related document or agreement. The Indenture Trustee and such successor
shall take such action, consistent with this Servicing Agreement, as shall be
necessary to effectuate any such succession.
(b) Any successor, including the Indenture Trustee, to the Servicer as
servicer shall during the term of its service as servicer (i) continue to
service and administer the Loans for the benefit of the Securityholders and (ii)
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
fidelity bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.10.
(c) Any successor Servicer, including the Indenture Trustee, shall not
be deemed in default or to have breached its duties hereunder if the predecessor
Servicer shall fail to deliver any required deposit to the Custodial Account or
otherwise cooperate with any required servicing transfer or succession
hereunder.
Section 7.03. NOTIFICATION TO SECURITYHOLDERS. Upon any termination of
or appointment of a successor to the Servicer pursuant to this Article VII or
Section 6.04, the Indenture Trustee shall give prompt written notice thereof to
the Securityholders, the Issuer and each Rating Agency.
Section 7.04. WAIVER OF SERVICER EVENTS OF DEFAULT.
The Holders of not less than 66% of the Note Balances of the Notes may
waive such default or Servicing Default. Upon any such waiver of a default or
Servicing Default, such default or Servicing Default shall cease to exist and
shall be deemed to have been remedied for every purpose hereunder. No such
waiver shall extend to any subsequent or other default or Servicing Default or
impair any right consequent thereon except to the extent expressly so waived.
ARTICLE VIII
Miscellaneous Provisions
Section 8.01. AMENDMENT. Subject to the following paragraph, this
Servicing Agreement may be amended from time to time by the Issuer, the
Servicer, the Indenture Trustee and, if applicable, the Custodian, without the
consent of any of the Noteholders, in order to (i) cure any ambiguity, omission
or defect, (ii) to correct, clarify, modify or supplement any provisions herein
(including to give effect to the expectations of Noteholders), (iii) to make any
other provisions with respect to matters or questions arising hereunder which
shall not be inconsistent with the provisions hereof, or (iv) if such amendment,
as evidenced by an Opinion of Counsel delivered to the Indenture Trustee, is
reasonably necessary to comply with any requirements imposed by the Code or any
successor or amendatory statute or any temporary or final regulation, revenue
ruling, revenue procedure or other written official announcement or
interpretation relating to federal income tax laws or any proposed action which,
if made effective, would apply retroactively to the Issuer or the Trust Estate
at least from the effective date of such amendment, or would be necessary to
avoid the occurrence of a prohibited transaction or to reduce the incidence of
any tax that would arise from any actions taken with respect to the operation of
the Issuer or the Trust Estate; provided that (except any amendment described in
clause (iv) above) (a) such amendment does not add any significant provisions to
change in any manner or eliminate any of the provisions of this Servicing
Agreement in a manner the requires the consent of the Holders of Notes as
described below, (b) such action shall not adversely affect in any material
respect the interests of any Noteholder, as evidenced by either (i) an Opinion
of Counsel delivered to the Servicer and the Indenture Trustee to such effect or
(ii) confirmation from the Rating Agencies that such amendment shall not result
in the reduction or withdrawal of the rating of any outstanding Class of Notes.
No amendment shall be deemed to adversely affect in any material respect the
interests of any Noteholder who shall have consented thereto, and no Opinion of
Counsel shall be required to address the effect of any such amendment on any
such consenting Noteholder.
This Servicing Agreement may be amended from time to time by the
Issuer, the Servicer, the Indenture Trustee and, if applicable, the Custodian,
with the consent of the Majority Noteholders for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Servicing Agreement or of modifying in any manner the rights of the Holders
of Notes; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received on Loans which
are required to be distributed on any Note without the consent of the Holder of
such Note, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Notes (as evidenced by either (i) an Opinion of Counsel
delivered to the Indenture Trustee or (ii) written notice to the Issuer, the
Servicer and the Indenture Trustee from the Rating Agencies that such action
shall not result in the reduction or withdrawal of the rating of the Class A
Notes with respect to which it is a Rating Agency) in a manner other than as
described in (i), or (iii) modify the consents required by the immediately
preceding clauses (i) and (ii) without the consent of the Holders of all Notes
then outstanding; provided, further, that, notwithstanding any other provision
of this Servicing Agreement regarding voting rights, no amendment which affects
one or more Classes of Notes or Certificates held by the Depositor or Seller or
any of their Affiliates shall be effective without the consent of the Depositor
or Seller or any of their Affiliates, as applicable, to such amendment.
Notwithstanding any of the other provisions of this Section 8.01, none
of the Servicer, the Issuer or the Indenture Trustee shall enter into any
amendment that would significantly change the permitted activities of the Issuer
without the consent of the Holders of Certificates that represent more than 50%
of the Certificate Percentage Interests.
It shall not be necessary for the consent of Securityholders under this
Section 8.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Securityholders shall be subject to such reasonable
regulations as the Indenture Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to this
Section 8.01 shall be borne by the Person seeking the related amendment, but in
no event shall such Opinion of Counsel be an expense of the Indenture Trustee.
The Indenture Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its respective rights, duties
and immunities under this Servicing Agreement or otherwise.
Section 8.02. GOVERNING LAW. THIS SERVICING 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 SUCH LAWS.
Section 8.03. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by certified mail, return receipt requested,
to (a) in the case of the Servicer, [Name of Servicer], ______________________,
Attention: ___________, (b) in the case of Xxxxx'x, Home Loan Monitoring Group,
00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (c) in the case of
Standard & Poor's, 00 Xxxxx Xxxxxx 00 Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Mortgage Surveillance Group, (d) in the case of the Owner
Trustee, [Name of Owner Trustee], ___________________________, Attention:
_______ Trust Series ____ __, (e) in the case of the Issuer, to ______ Trust
Series ____ __, c/o Owner Trustee, [Name of Owner Trustee], __________________,
Attention: ______ Trust Series ____ __, (f) in the case of the Indenture
Trustee, [Name of Indenture Trustee], ___________________________, Attention:
_______________ and (g) in the case of the Underwriter, at [Name of
Underwriter], _____________________________________, Attention:
________________; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party. Any notice
required or permitted to be mailed to a Securityholder shall be given by first
class mail, postage prepaid, at the address of such Securityholder as shown in
the Register. Any notice so mailed within the time prescribed in this Servicing
Agreement shall be conclusively presumed to have been duly given, whether or not
the Securityholder receives such notice. Any notice or other document required
to be delivered or mailed by the Indenture Trustee to any Rating Agency shall be
given on a reasonable efforts basis and only as a matter of courtesy and
accommodation and the Indenture Trustee shall have no liability for failure to
delivery such notice or document to any Rating Agency.
Section 8.04. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Servicing Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Servicing Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Servicing
Agreement or of the Securities or the rights of the Securityholders thereof.
Section 8.05.THIRD PARTY BENEFICIARIES. This Servicing Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Securityholders, the Owner Trustee and their respective successors and permitted
assigns. Except as otherwise provided in this Servicing Agreement, no other
Person will have any right or obligation hereunder.
Section 8.06. COUNTERPARTS. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 8.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 8.08. TERMINATION UPON PURCHASE BY THE SERVICER OR LIQUIDATION
OF ALL LOANS; PARTIAL REDEMPTION. (a) The respective obligations and
responsibilities of the Servicer, the Issuer and the Indenture Trustee created
hereby shall terminate upon the last action required to be taken by the Issuer
pursuant to the Owner Trust Agreement and by the Indenture Trustee pursuant to
the Indenture following the earlier of:
(i) the date on or before which the Indenture or Owner Trust
Agreement is terminated, or
(ii) the purchase by the Servicer from the Issuer of all Loans
and all property acquired in respect of any Loan at a price equal to
the Termination Price.
(b) The right of the Servicer to purchase the assets of the Issuer
pursuant to clause (ii) above on any Payment Date is conditioned upon the
Aggregate Loan Balance (after applying payments received in the related Due
Period) as of such Payment Date being less than ___ percent of the Aggregate
Loan Balance as of the Cut off Date. If such right is exercised by the Servicer,
the Servicer shall deposit the Termination Price calculated pursuant to clause
(ii) above with the Indenture Trustee pursuant to Section 4.10 of the Indenture
and, upon the receipt of such deposit, the Indenture Trustee or Custodian shall
release to the Servicer, the files pertaining to the Loans being purchased.
(c) The Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee for execution, at the time the Loans are to be released to the
Servicer, appropriate documents assigning each such Loan from the Indenture
Trustee or the Issuer to the Servicer or the appropriate party.
(d) The Servicer shall give the Indenture Trustee not less than seven
Business Days' prior written notice of the Payment Date on which the Servicer
anticipates that the final distribution will be made to Noteholders. Notice of
any termination, specifying the anticipated Final Scheduled Payment Date or
other Payment Date (which shall be a date that would otherwise be a Payment
Date) upon which the Noteholders may surrender their Notes to the Indenture
Trustee (if so required by the terms hereof) for payment of the final
distribution and cancellation, shall be given promptly by the Servicer to the
Indenture Trustee specifying:
(i) the anticipated Final Scheduled Payment Date or other
Payment Date upon which final payment of the Notes is anticipated to be
made upon presentation and surrender of Notes at the office or agency
of the Indenture Trustee therein designated; and
(ii) the amount of any such final payment, if known.
Section 8.09. CERTAIN MATTERS AFFECTING THE INDENTURE TRUSTEE. For all
purposes of this Servicing Agreement, in the performance of any of its duties or
in the exercise of any of its powers hereunder, the Indenture Trustee shall be
subject to and entitled to the benefits of Article VI of the Indenture.
Section 8.10. OWNER TRUSTEE NOT LIABLE FOR RELATED DOCUMENTS. The
recitals contained herein shall be taken as the statements of the Depositor, and
the Owner Trustee assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or sufficiency of this
Servicing Agreement, of any Basic Document or of the Certificates (other than
the signatures of the Owner Trustee on the Certificates) or the Notes, or of any
Related Documents. The Owner Trustee shall at no time have any responsibility or
liability with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to Certificateholders under
the Owner Trust Agreement or the Noteholders under the Indenture, including, the
compliance by the Depositor or the Seller with any warranty or representation
made under any Basic Document or in any related document or the accuracy of any
such warranty or representation, or any action of the Certificate Paying Agent,
the Certificate Registrar or the Indenture Trustee taken in the name of the
Owner Trustee.
It is expressly understood and agreed by the parties hereto that with
respect to the execution of this Servicing Agreement by [Name of Owner Trustee]
(the "Trust Company") for the Issuer (a) this Servicing Agreement is executed
and delivered by the Trust Company, not individually or personally, but solely
as Owner Trustee, in the exercise of the powers and authority conferred and
vested in it, pursuant to the Owner Trust Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by the Trust Company but is made and intended for the purpose for
binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on the Trust Company, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
person claiming by, through or under the parties hereto, and (d) under no
circumstances shall the Trust Company be personally liable for the payment of
any indebtedness or expenses of the Issuer or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Issuer under this Servicing Agreement or any other related
documents.
IN WITNESS WHEREOF, the Servicer, the Indenture Trustee and the Issuer
have caused this Servicing Agreement to be duly executed by their respective
officers or representatives all as of the day and year first above written.
[NAME OF SERVICER],
as Servicer
By:_____________________________
Name:
Title:
______ TRUST SERIES ____ __
By: [NAME OF OWNER TRUSTEE], not in its individual
capacity but solely as Owner Trustee
By: _____________________________
Name:
Title:
[NAME OF INDENTURE TRUSTEE], as Indenture Trustee
By: _____________________________
Name:
Title:
EXHIBIT A
LOAN SCHEDULE
TO BE PROVIDED UPON REQUEST
EXHIBIT B
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That [Name of Indenture Trustee], as Indenture Trustee (the "Indenture
Trustee"), under the Indenture (the "Indenture") among
________________________________________ and the Indenture Trustee, a national
banking association organized and existing under the laws of the State of
________, and having its principal office located
at_____________________________________________, hath made, constituted and
appointed, and does by these presents make, constitute and appoint
________________________, a corporation organized and existing under the laws of
the State of ______________, its true and lawful Attorney in Fact, with full
power and authority to sign, execute, acknowledge, deliver, file for record, and
record any instrument on its behalf and to perform such other act or acts as may
be customarily and reasonably necessary and appropriate to effectuate the
following enumerated transactions in respect of any of the mortgages or deeds of
trust (the "Mortgages" and the "Deeds of Trust", respectively) creating a trust,
second lien, third lien or an estate in fee simple interest in real property
securing a Loan and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Indenture Trustee for various Securityholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of Endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which [Name of Servicer] is acting as
Servicer pursuant to a Servicing Agreement, dated as of ____________ 1, ____
(the "Servicing Agreement").
This appointment shall apply only to transactions which the Indenture Trustee is
authorized to enter into under the Indenture, but in no event shall apply to any
transactions other than the following enumerated transactions only:
(1) The modification or re recording of a Mortgage or Deed of
Trust, where said modification or rerecording is for the purpose of correcting
the Mortgage or Deed of Trust to conform same to the original intent of the
parties thereto or to correct title errors discovered after such title insurance
was issued and said modification or re recording, in either instance, does not
adversely affect the lien of the Mortgage or Deed of Trust as insured.
(2) The subordination of the lien of a Mortgage or Deed of Trust
to an easement in favor of a public utility company or a government agency or
unit with powers of eminent domain; this section shall include, without
limitation, the execution of partial satisfactions/releases, partial
reconveyances or the execution of requests to Indenture Trustees to accomplish
same.
(3) With respect to a Mortgage or Deed of Trust, the foreclosure,
the taking of a deed in lieu of foreclosure, or the completion of judicial or
non judicial foreclosure or termination, cancellation or rescission of any such
foreclosure, including, without limitation, any and all of the following acts:
a) The substitution of Indenture Trustee(s) serving under a Deed
of Trust, in accordance with state law and the Deed of Trust;
b) Statements of breach or non performance;
c) Notices of default;
d) Cancellations/rescissions of notices of default and/or notices
of sale;
e) The taking of a deed in lieu of foreclosure; and
f) Such other documents and actions as may be necessary under the
terms of the Mortgage, Deed of Trust or state law to expeditiously complete said
transactions.
(4) The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
(5) The completion of loan assumption agreements.
(6) The full satisfaction/release of a Mortgage or Deed of Trust or
full reconveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage Note.
(7) The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the Loan secured and
evidenced thereby.
(8) The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the endorsement of the related Mortgage
Note.
(9) The modification or re recording of a Mortgage or Deed of Trust,
where said modification or rerecording is for the purpose of any modification
pursuant to Section 3.01 of the Servicing Agreement.
(10) The subordination of the lien of a Mortgage or Deed of Trust,
where said subordination is in connection with any modification pursuant to
Section 3.01 of the Servicing Agreement, and the execution of partial
satisfactions/releases in connection with such same Section 3.01.
The undersigned gives said Attorney in Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney in Fact shall lawfully do or cause
to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of Attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect has not been
revoked unless an instrument of revocation has been made in writing by the
undersigned.
[NAME OF INDENTURE
TRUSTEE], not in its
individual capacity, but
solely as Indenture Trustee
under the Agreements and
the Indentures.
Name: Name:
---------------------------- -----------------------------
Title: Title:
--------------------------- -----------------------------
STATE OF )
) SS.
COUNTY OF )
On this __ day of ____________, ____, before me the
undersigned, Notary Public of said State, personally appeared
_______________________________ and _____________________ personally known to me
to be duly authorized officers of [Name of Indenture Trustee] that executed the
within instrument and personally known to me to be the persons who executed the
within instrument on behalf of [Name of Indenture Trustee] therein named, and
acknowledged to me such [Name of Indenture Trustee] executed the within
instrument pursuant to its by laws.
WITNESS my hand and official seal.
Notary Public in and for the
State of __________________________
After recording, please mail to:
------------------------------
------------------------------
------------------------------
Attn:_________________________
EXHIBIT C
FORM OF REQUEST FOR RELEASE
To: [Custodian]
Re: Servicing Agreement, dated as of ____________ 1, ____, among
[Name of Indenture Trustee], as Indenture Trustee, ______
Trust Series ____ __, as Issuer, and [Name of Servicer], as
Servicer
In connection with the administration of the Loans held by you as the
Custodian on behalf of the Indenture Trustee under the Custodial Agreement,
dated as of _________ 1, ____, among the Indenture Trustee, and [Name of
Custodian], we request the release, and acknowledge receipt, of the (Custodial
File/[specify documents]) for the Loan described below, for the reason
indicated.
MORTGAGOR'S NAME ADDRESS & ZIP CODE:
LOAN NUMBER:
REASON FOR REQUESTING DOCUMENTS (check one)
___ 1. Loan Paid in Full (The undersigned hereby certifies that all amounts
received in connection therewith have been credited to the account of
the Indenture Trustee.)
___ 2. Loan Liquidated by ____________________ (The undersigned hereby
certifies that all proceeds of foreclosure, insurance, condemnation or
other liquidation have been finally received and credited to the
Custodial Account.)
___ 3. Loan in Foreclosure
___ 4. Other (explain)
If box 1 or 2 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Loan.
If box 3 or 4 above is checked, upon our return of all of the
above documents to you as the Custodian, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
[NAME OF SERVICER], as Servicer
By:
Name:
Title:
Date:_________________________________
Acknowledgment of Documents returned to the Custodian:
[NAME OF CUSTODIAN], as Custodian
By:
Name:
Title:
Date: ________________________________
