==============================================================================================
GMAC MORTGAGE CORPORATION
as Servicer,
GMACM HOME EQUITY LOAN TRUST 2006-HE2,
as Issuer
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
as Indenture Trustee
_________________________
SERVICING AGREEMENT
Dated as of June 29, 2006
_________________________
==============================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions...............................................................1
Section 1.01 Definitions.......................................................1
Section 1.02 Other Definitional Provisions.....................................1
Section 1.03 Interest Calculations. All calculations of interest
hereunder that are made in respect of a Mortgage Loan shall
be made in conformity with the related Mortgage Note..............2
ARTICLE II Representations and Warranties............................................2
Section 2.01 Representations and Warranties Regarding the Servicer.............2
Section 2.02 Representations and Warranties of the Issuer......................4
Section 2.03 Enforcement of Representations and Warranties.....................4
ARTICLE III Administration and Servicing of Mortgage Loans............................5
Section 3.01 The Servicer......................................................5
Section 3.02 Collection of Certain Mortgage Loan Payments......................8
Section 3.03 Withdrawals from the Custodial Account...........................11
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses....12
Section 3.05 Modification Agreements..........................................13
Section 3.06 Trust Estate; Related Documents..................................14
Section 3.07 Realization Upon Defaulted Mortgage Loans........................15
Section 3.08 Issuer and Indenture Trustee to Cooperate........................17
Section 3.09 Servicing Compensation; Payment of Certain Expenses by
Servicer.........................................................18
Section 3.10 Annual Statement as to Compliance................................18
Section 3.11 Annual Independent Public Accountants' Servicing Report..........19
Section 3.12 Access to Certain Documentation and Information Regarding
the Mortgage Loans...............................................19
Section 3.13 Maintenance of Certain Servicing Insurance Policies..............19
Section 3.14 Information Required by the Internal Revenue Service and
Reports of Foreclosures and Abandonments of Mortgaged
Property.........................................................19
Section 3.15 Optional Repurchase or Transfer of Mortgage Loans................20
Section 3.16 Reserved.........................................................21
Section 3.17 Reserved.........................................................21
Section 3.18 Pre-Funding Account..............................................21
Section 3.19 Capitalized Interest Account.....................................22
Section 3.20 Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.....................23
Section 3.21 Advance Facility.................................................25
ARTICLE IV Servicing Certificate....................................................26
Section 4.01 Statements to Securityholders....................................26
Section 4.02 Tax Returns and 1934 Act Reports.................................29
ARTICLE V Note Payment Account.....................................................30
Section 5.01 Note Payment Account.............................................30
ARTICLE VI The Servicer.............................................................31
Section 6.01 Liability of the Servicer........................................31
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer.................................................31
Section 6.03 Limitation on Liability of the Servicer and Others...............31
Section 6.04 Servicer Not to Resign...........................................32
Section 6.05 Delegation of Duties.............................................32
Section 6.06 Payment of Indenture Trustee's and Owner Trustee's Fees and
Expenses; Indemnification........................................32
ARTICLE VII Default..................................................................34
Section 7.01 Servicing Default................................................34
Section 7.02 Indenture Trustee to Act; Appointment of Successor...............35
Section 7.03 Notification to Securityholders..................................38
Section 7.04 Servicing Termination Event; Removal of Servicer.................38
ARTICLE VIII Miscellaneous Provisions.................................................40
Section 8.01 Amendment........................................................40
Section 8.02 GOVERNING LAW....................................................40
Section 8.03 Notices..........................................................40
Section 8.04 Severability of Provisions.......................................40
Section 8.05 Third-Party Beneficiaries........................................41
Section 8.06 Counterparts.....................................................41
Section 8.07 Effect of Headings and Table of Contents.........................41
Section 8.08 Termination Upon Purchase by the Servicer or Liquidation of
All Mortgage Loans; Partial Redemption...........................41
Section 8.09 Certain Matters Affecting the Indenture Trustee..................42
Section 8.10 Owner Trustee Not Liable for Related Documents...................42
ARTICLE IX Compliance With Regulation AB............................................44
Section 9.01 Intent of the Parties; Reasonableness............................44
Section 9.02 Additional Representations and Warranties of the Indenture
Trustee..........................................................44
Section 9.03 Information to Be Provided by the Indenture Trustee..............45
Section 9.04 Report on Assessment of Compliance and Attestation...............45
Section 9.05 Indemnification; Remedies........................................46
EXHIBIT A .....MORTGAGE LOAN SCHEDULE A-1
EXHIBIT B LIMITED POWER OF ATTORNEY...............................................B-1
EXHIBIT C FORM OF REQUEST FOR RELEASE.............................................C-1
EXHIBIT D-1 FORM OF FORM 10-K CERTIFICATION.........................................D-1
EXHIBIT D-2 FORM OF BACK-UP CERTIFICATION TO FORM 10-K
CERTIFICATE.............................................................D-2
This Servicing Agreement, dated as of June 29, 2006 (the "Agreement"), is among GMAC
Mortgage Corporation, as servicer (the "Servicer"), the GMACM Home Equity Loan Trust
2006-HE2, as issuer (the "Issuer"), and JPMorgan Chase Bank, National Association, as
indenture trustee (the "Indenture Trustee").
WITNESSETH:
WHEREAS, pursuant to the terms of the Purchase Agreement (as defined herein), GMAC
Mortgage Corporation, as seller (in such capacity, "GMACM") and as servicer, and Walnut
Grove Mortgage Loan Trust 2003-A, as seller ("WG Trust 2003" and, with GMACM, each a
"Seller" and together, the "Sellers"), will sell to Residential Asset Mortgage Products, Inc.
("RAMP"), as purchaser (in such capacity, the "Purchaser"), the Initial Mortgage Loans on
the Closing Date, and may sell Subsequent Mortgage Loans on one or more Subsequent Transfer
Dates, together with the Related Documents on the Closing Date and any Subsequent Transfer
Date;
WHEREAS, RAMP, as depositor (in such capacity, the "Depositor"), will sell the
Initial Mortgage Loans and assign all of its rights under the Purchase Agreement to the
Issuer, together with the Related Documents on the Closing Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will issue the
Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue the Notes; and
WHEREAS, pursuant to the terms of this Agreement, the Servicer will service the
Mortgage 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 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 June 29, 2006 (the "Indenture"),
between the Issuer and the 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 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 Agreement and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Agreement or
in any such certificate or other document, and accounting terms partly defined
in this 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 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 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 Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; the term "including" shall mean
"including without limitation"; "or" shall include "and/or"; and the term
"proceeds" shall have the meaning ascribed thereto in the UCC.
(d) The definitions contained in this 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 a Mortgage Loan shall be made in conformity with the related Mortgage Note. All
calculations of interest on the Notes and the Servicing Fee shall be made on the basis of a
360-day year consisting of twelve 30-day months. 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 for the benefit of the Indenture Trustee, as
pledgee of the Mortgage Loans, as of the Closing Date:
(a) the Servicer is a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania 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 (not in the ordinary course of business) on the
business, properties, assets, or condition (financial or other) of the
Servicer;
(b) the Servicer has the power and authority to make, execute, deliver and perform this
Agreement and all of the transactions contemplated under this Agreement, and
has taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement. When executed and delivered, this Servicing
Agreement will constitute the legal, valid and binding obligation of the
Servicer enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies;
(c) the Servicer is not required to obtain the consent of any other Person or any
consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as the case
may be;
(d) the execution and delivery of this Agreement and the performance of the transactions
contemplated hereby by the Servicer will not violate any material provision of
any existing law or regulation or any order or decree of any court applicable
to the Servicer or any provision of the Articles of Incorporation or Bylaws of
the Servicer, or constitute a material breach of any material mortgage,
indenture, contract or other agreement to which the Servicer is a party or by
which the Servicer may be bound;
(e) 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 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 Agreement;
(f) the Servicer is a member of MERS in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS; and
(g) the servicing of the Mortgage Loans has at all times been conducted in material
compliance with all applicable federal, state and local laws, rules and
regulations and there has been no material violation of any such laws, rules
or regulations arising out of the servicing of the Mortgage Loans.
The foregoing representations and warranties shall survive any termination of the
Servicer hereunder.
Section 2.02 Representations and Warranties of the Issuer. The Issuer hereby represents
and warrants to the Servicer and for the benefit of the Indenture Trustee, as pledgee of the
Mortgage Loans, as of the Closing Date:
(a) 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 Agreement and to perform its obligations under this
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement; and
(b) the execution and delivery by the Issuer of this Agreement and the performance by the
Issuer of its obligations under this 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 require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action with respect to, any governmental authority or agency regulating
the activities of limited liability companies. 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 Mortgage Loans, or the
Issuer, shall enforce the representations and warranties of the Sellers pursuant to the
Purchase Agreement. Upon the discovery by the Sellers, the Depositor, the Servicer, the
Indenture Trustee, the Enhancer, the Issuer, or the Custodian of a breach of any of the
representations and warranties made by a Seller in the Purchase Agreement, in respect of any
Mortgage Loan which materially and adversely affects the interests of the Securityholders or
the Enhancer, the party discovering such breach shall give prompt written notice to the
other parties (the Custodian being so obligated under the Custodial Agreement). The
Servicer shall promptly notify such Seller of such breach and request that, pursuant to the
terms of the Purchase Agreement, the Seller either (i) cure such breach in all material
respects within 90 days from the date the Seller was notified of such breach, or in the case
of a breach which has the effect of making the Mortgage Loan fail to be a "qualified
mortgage" within the meaning of Section 860G of the Internal Revenue Code, within 90 days
after the discovery thereof by the Sellers, the Depositor, the Servicer, the Indenture
Trustee, the Issuer or the Purchaser or (ii) purchase such Mortgage Loan from the Issuer at
the price and in the manner set forth in Section 3.1(e) of the Purchase Agreement; provided,
that the Seller shall, subject to the conditions set forth in the Purchase Agreement, have
the option to substitute an Eligible Substitute Loan or Loans for such Mortgage Loan,
provided that such substitution occurs within two years following the Closing Date. In the
event that the Seller elects to substitute one or more Eligible Substitute Loans pursuant to
Section 3.1(e) of the Purchase Agreement, the Seller shall deliver to the Custodian or the
Servicer, in accordance with the Purchase Agreement, with respect to such Eligible
Substitute Loans, the original Mortgage Note, the Mortgage, and such other documents and
agreements as are required by the 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 such Seller on the next
succeeding Payment Date except to the extent that a payment less than the applicable Monthly
Payment has been received by the Issuer for such month in respect of the Mortgage Loan to be
removed. The Servicer shall amend or cause to be amended the Mortgage Loan Schedule to
reflect the removal of such Mortgage Loan and the substitution of the Eligible Substitute
Loans and the Servicer shall promptly deliver the amended Mortgage Loan Schedule to the
Owner Trustee and Indenture Trustee.
It is understood and agreed that the obligation of the Sellers to cure such breach or
purchase or substitute for such Mortgage 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 Mortgage Loans, against any Seller. In
connection with the purchase of or substitution for any such Mortgage Loan by such Seller,
the Issuer shall assign to such Seller all of its right, title and interest in respect of
the Purchase Agreement applicable to such Mortgage Loan. Upon receipt of the Repurchase
Price, or upon completion of such substitution, the Servicer shall notify the Custodian, and
the Custodian shall deliver the Mortgage Notes to the Servicer, together with all relevant
endorsements and assignments prepared by the Servicer that the Indenture Trustee shall
execute.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 The Servicer.
(a) The Servicer shall service and administer the Mortgage Loans in a manner generally
consistent with the terms of the Program Guide and in a manner consistent with
the terms of this Agreement and that shall be normal and usual in its general
mortgage servicing activities and consistent with the manner in which it
services all other Mortgage Loans in its servicing portfolio with
characteristics similar to those of the Mortgage Loans. The Servicer shall
have full power and authority, acting alone or through a Subservicer, to do
any and all things in connection with such servicing and administration which
it may deem necessary or desirable, it being understood, however, that the
Servicer shall at all times remain responsible to the Issuer and the Indenture
Trustee, as pledgee of the Mortgage Loans, for the performance of its duties
and obligations hereunder in accordance with the terms hereof and the Program
Guide. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered by the Issuer and the
Indenture Trustee, as pledgee of the Mortgage Loans, to execute and deliver,
on behalf of itself, the Issuer, the Indenture Trustee or any of them, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge and all other comparable instruments with respect to the Mortgage
Loans and the Mortgaged Properties. The Issuer, the Indenture Trustee and the
Custodian, as applicable, shall furnish the Servicer with any powers of
attorney and other documents necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties hereunder. In addition,
the Servicer may, at its own discretion and on behalf of the Indenture
Trustee, obtain credit information in the form of a "credit score" from a
credit repository. On the Closing Date, the Indenture Trustee shall deliver
to the Servicer a limited power of attorney substantially in the form of
Exhibit B hereto. The Servicer is further authorized and empowered by the
Issuer and the Indenture Trustee, on behalf of the Noteholders and the
Indenture Trustee, in its own name or in the name of the Subservicer, when the
Servicer or the Subservicer, as the case may be, believes it appropriate in
its best judgment to register any Mortgage Loan on the MERS(R)System, or cause
the removal from the registration of any Mortgage Loan on the MERS(R)System, to
execute and deliver, on behalf of the Indenture Trustee and the Noteholders or
any of them, any and all instruments of assignment and other comparable
instruments with respect to such assignment or re-recording of a Mortgage in
the name of MERS, solely as nominee for the Indenture Trustee and its
successors and assigns. The Indenture Trustee shall have no ongoing
responsibility to check the status of the Mortgage Loans on the MERS(R)System.
Any expenses incurred in connection with the actions described in the
preceding sentence shall be borne by the Servicer, with no right of
reimbursement.
Notwithstanding the foregoing, subject to Section 3.02(a), the Servicer shall not
permit any modification with respect to any Mortgage Loan that would both constitute a sale
or exchange of such Mortgage Loan within the meaning of Section 1001 of the Code and any
proposed, temporary or final regulations promulgated thereunder and cause any REMIC to fail
to qualify as a REMIC under the Code or, except as provided in Section 11.01(f) of the
Indenture, cause the imposition of a tax upon any of the REMICs (including but not limited
to the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and the
tax on contributions to a REMIC set forth in Section 860G(d) of the Code).
Subject to Section 3.15, if the Mortgage did not have a Lien senior to the related
Mortgage Loan on the related Mortgaged Property as of the related Cut-Off Date, then the
Servicer, in such capacity, may not consent to the placing of a Lien senior to that of the
Mortgage on the related Mortgaged Property. Subject to Section 3.15, if the Mortgage had a
Lien senior to the related Mortgage Loan on the related Mortgaged Property as of the related
Cut-Off Date, then the Servicer, in such capacity, may not consent to the refinancing of
such prior senior Lien; unless (i) the resulting CLTV of such Mortgage Loan is no higher
than the greater of the CLTV prior to such refinancing or a 70% CLTV (or a 80% CLTV for
those borrowers with a FICO "credit score" of 720 or greater) and (ii) the interest rate for
the loan evidencing the refinanced senior Lien is no higher than the interest rate on the
loan evidencing the existing senior Lien immediately prior to the date of such refinancing
(meaning, in the case of an adjustable rate loan, a substantially similar index and a gross
margin no higher than that of the existing senior Lien); provided, however, that if the loan
evidencing the existing senior Lien prior to the date of refinancing is an adjustable rate
loan and the loan evidencing the refinanced senior Lien is a fixed rate loan, then the
interest rate on the loan evidencing the refinanced senior Lien may be up to 2.0% higher
than the then-current mortgage rate of the loan evidencing the existing senior Lien and
(iii) the loan evidencing the refinanced senior Lien is not subject to negative amortization.
In connection with servicing the Mortgage Loans, the Servicer may take reasonable
actions to encourage or effect the termination of Mortgage Notes that have become dormant.
The relationship of the Servicer (and of any successor to the Servicer as servicer
under this Agreement) to the Issuer under this Agreement is intended by the parties to be
that of an independent contractor and not that of a joint venturer, partner or agent.
(b) The Servicer may enter into Subservicing Agreements with Subservicers for the
servicing and administration of certain of the Mortgage Loans. The Servicer
shall provide notice to the Indenture Trustee upon entering into a
Subservicing Agreement. References in this Agreement to actions taken or to
be taken by the Servicer in servicing the Mortgage Loans include actions taken
or to be taken by a Subservicer on behalf of the Servicer and any amount
actually received by such Subservicer in respect of a Mortgage Loan shall be
deemed to have been received by the Servicer whether or not actually received
by the Servicer. Each Subservicing Agreement will be upon such terms and
conditions as are not inconsistent with this Agreement and as the Servicer and
the Subservicer have agreed. With the approval of the Servicer, a Subservicer
may delegate its servicing obligations to third-party servicers, but such
Subservicers will remain obligated under the related Subservicing Agreements.
The Servicer and the Subservicer may enter into amendments to the related
Subservicing Agreements; provided, however, that any such amendments shall not
cause the Mortgage Loans to be serviced in a manner that would be materially
inconsistent with the standards set forth in this Agreement. The Servicer
shall be entitled to terminate any Subservicing Agreement in accordance with
the terms and conditions thereof and without any limitation by virtue of this
Agreement; provided, however, that in the event of termination of any
Subservicing Agreement by the Servicer or the Subservicer, the Servicer shall
either act as servicer of the related Mortgage Loan or enter into a
Subservicing Agreement with a successor Subservicer which will be bound by the
terms of the related Subservicing Agreement. The Servicer shall be entitled
to enter into any agreement with a Subservicer for indemnification of the
Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
In the event that the rights, duties and obligations of the Servicer are terminated
hereunder, any successor to the Servicer in its sole discretion may, to the extent permitted
by applicable law, terminate the existing Subservicing Agreement with any Subservicer in
accordance with the terms of the applicable Subservicing Agreement or assume the terminated
Servicer's rights and obligations under such subservicing arrangements which termination or
assumption will not violate the terms of such arrangements.
As part of its servicing activities hereunder, the Servicer, for the benefit of the
Indenture Trustee, the Enhancer and the Securityholders, shall use reasonable efforts to
enforce the obligations of each Subservicer under the related Subservicing Agreement, to the
extent that the non-performance of any such obligation would have a material adverse effect
on a Mortgage Loan. 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 Mortgage 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 Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys fees against the party against whom such enforcement is directed.
(c) All other documents contained in the Mortgage File and any original documents
relating to the Mortgage Loans not contained in the Mortgage File or delivered to the
Custodian, if any, or the Indenture Trustee are and shall be held by the Servicer in trust
as agent for the Indenture Trustee on behalf of the Noteholders.
Section 3.02 Collection of Certain Mortgage Loan Payments.
(a) The Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and generally consistent
with the Program Guide, follow such collection procedures as shall be normal
and usual in its general mortgage servicing activities and consistent with the
procedures the Servicer employs in servicing all other Mortgage Loans in the
servicing portfolio with characteristics similar to those of the Mortgage
Loans. Consistent with the foregoing, and without limiting the generality of
the foregoing, the Servicer may in its discretion (i) waive any late payment
charge, penalty interest or other fees which may be collected in the ordinary
course of servicing a Mortgage Loan and (ii) arrange with a Mortgagor a
schedule for the payment of principal and interest due and unpaid; provided,
that such arrangement is consistent with the Servicer's policies with respect
to home equity mortgage loans; and provided further, that notwithstanding such
arrangement, such Mortgage Loans will be included in the information regarding
delinquent Mortgage Loans set forth in the Servicing Certificate. The
Servicer may also extend the Due Date for payment due on a Mortgage Loan in
accordance with the Program Guide; provided, however, that the Servicer shall
first determine that any such waiver or extension will not impair the coverage
of any related insurance policy or materially adversely affect the Lien of the
related Mortgage or the interests of the Securityholders or the Enhancer, and
the Servicer shall not grant any such waiver or extension that would have any
such effect. Consistent with the terms of this Agreement, the Servicer may
also:
(i) waive, modify or vary any term of any Mortgage Loan;
(ii) consent to the postponement of strict compliance with any such term or in any manner
grant indulgence to any Mortgagor;
(iii) arrange with a Mortgagor a schedule for the payment of principal and interest due and
unpaid;
(iv) forgive any portion of the amounts contractually owed under the Mortgage Loan;
(v) capitalize past due amounts owed under the Mortgage Loan by adding any amounts in
arrearage to the existing principal balance of the Mortgage Loan (a "Capitalization
Workout") which will result in an increased Monthly Payment amount, provided that:
(A) the amount added to the existing principal balance of the Mortgage Loan (the
"Capitalized Amount") shall be no greater than five times the Mortgagor's current
Minimum Monthly Payment amount; and (B) the Servicer shall not enter into a
Capitalization Workout unless the CLTV of the Mortgage Loan prior to the
Capitalization Workout equals or exceeds 80% and the Mortgagor has qualified for the
Capitalization Workout under the Servicer's servicing guidelines; or
(vi) reset the maturity date for the Mortgage Loan, but in no event shall such reset date
extend beyond the end of the Collection Period preceding the Final Payment Date;
or any combination of the foregoing, if in the Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to the interests
of the Securityholders or the Enhancer; provided, however, that the Servicer may not modify
or permit any Subservicer to modify any Mortgage Loan (including without limitation any
modification that would change the Loan Rate, forgive the payment of any principal or
interest (unless in connection with the liquidation of the related Mortgage Loan) or extend
the final maturity date of such Mortgage Loan) unless such Mortgage Loan is in default or,
in the judgment of the Servicer, such default is reasonably foreseeable. The general terms
of any waiver, modification, forgiveness, postponement or indulgence with respect to any of
the Mortgage Loans will be included in the Servicing Certificate, and such Mortgage Loans
will not be considered "delinquent" for the purposes of the Basic Documents so long as the
Mortgagor complies with the terms of such waiver, modification, forgiveness, postponement or
indulgence.
(b) The Servicer shall establish a Custodial Account, which shall be an Eligible Account,
titled "GMACM Home Equity Loan Trust Series 2006-HE2," in which the Servicer
shall deposit or cause to be deposited any amounts representing payments and
collections in respect of the Initial Mortgage Loans received by it subsequent
to or on the Cut-Off Date or, with respect to the Subsequent Mortgage Loans,
the Subsequent Cut-Off Date (other than in respect of the payments referred to
in the following paragraph), within two Business Days following receipt
thereof (or otherwise on or prior to the Closing Date), including the
following payments and collections received or made by it (without
duplication):
(i) all payments of principal of or interest on the Mortgage Loans received or advanced
by the Servicer, net of any portion of the interest thereof retained by any
Subservicer as subservicing fees;
(ii) the aggregate Repurchase Price of the Mortgage Loans purchased by the Servicer
pursuant to Section 3.15;
(iii) Net Liquidation Proceeds, net of any related Foreclosure Profit and all Subsequent
Net Recovery Amounts;
(iv) all proceeds of any Mortgage Loans repurchased by a Seller pursuant to the Purchase
Agreement, and all Substitution Adjustment Amounts required to be deposited in
connection with the substitution of an Eligible Substitute Loan pursuant to the
Purchase Agreement;
(v) Insurance Proceeds, other than Net Liquidation Proceeds, resulting from any insurance
policy maintained on a Mortgaged Property; and
(vi) amounts required to be paid by the Servicer pursuant to Section 8.08;
provided, however, that with respect to each Collection Period, the Servicer shall be
permitted to retain from payments in respect of interest on the Mortgage Loans, the
Servicing Fee for such Collection Period. The foregoing requirements respecting deposits to
the Custodial Account are exclusive, it being understood that, without limiting the
generality of the foregoing, the Servicer need not deposit in the Custodial Account amounts
representing Foreclosure Profits, fees (including annual fees) or late charge penalties,
payable by Mortgagors (such amounts to be retained as additional servicing compensation in
accordance with Section 3.09 hereof), or amounts received by the Servicer for the accounts
of Mortgagors for application towards the payment of taxes, insurance premiums, assessments
and similar items. In the event any amount not required to be deposited in the Custodial
Account is so deposited, the Servicer may at any time withdraw such amount from the
Custodial Account, any provision herein to the contrary notwithstanding. The Servicer shall
retain all Foreclosure Profits as additional servicing compensation.
The Servicer, in its sole discretion, may deposit into the Custodial Account,
Servicer Advances, representing installments of principal of or interest on Mortgage Loans
that were delinquent as of the end of any Collection Period, provided that the Servicer
reasonably believes that such amounts will be recoverable from Collections on the related
Mortgage Loan. If the Servicer makes any such Servicer Advances, the Servicer shall be
entitled to reimburse itself by withdrawing from the Custodial Account, as provided herein,
any amounts so advanced. The Servicer may cause the institution maintaining the Custodial
Account to invest any funds in the Custodial Account in Permitted Investments (including
obligations of the Servicer or any of its Affiliates, if such obligations otherwise qualify
as Permitted Investments), which investments shall mature not later than the Business Day
preceding the next succeeding Payment Date, and which investments shall not be sold or
disposed of prior to maturity. In addition, no such Permitted Investment shall be purchased
at a price in excess of par. Except as provided above, all income and gain realized from
any such investment shall inure to the benefit of the Servicer and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in respect of the
principal amount of any such investments shall be deposited in the Custodial Account by the
Servicer out of its own funds immediately as realized.
(c) The Servicer shall require each Subservicer to hold all funds constituting
collections on the Mortgage Loans, pending remittance thereof to the Servicer,
in one or more accounts meeting the requirements of an Eligible Account, and
shall require all such funds to be invested in Permitted Investments, unless
all such collections are remitted on a daily basis to the Servicer for deposit
into the Custodial Account.
Section 3.03 Withdrawals from the Custodial Account. The Servicer shall, from time to time
as provided herein, make withdrawals from the Custodial Account of amounts on deposit
therein pursuant to Section 3.02 that are attributable to the Mortgage Loans for the
following purposes:
(a) on each Determination Date, the Servicer shall determine the aggregate amounts to be
withdrawn from the Custodial Account and applied pursuant to Section 3.05(a)
of the Indenture and, prior to close of business on the Business Day prior to
the related Payment Date (provided, however, that the Indenture Trustee shall
not be required to invest any amounts deposited into the Note Payment Account
after 1:00 p.m.), shall withdraw such amounts from the Custodial Account and
deposit such amounts into the Note Payment Account to be distributed by the
Paying Agent in accordance with and in the order or priority set forth in
Section 3.05(a) of the Indenture for such Payment Date, in accordance with the
Servicing Certificate;
(b) to pay to itself any monthly payments received from the Mortgagors, the amount of
such payment that represents interest accrued on the related Mortgage Loan for
any period prior to the Cut-Off Date;
(c) to the extent deposited to the Custodial Account, to reimburse itself or the related
Subservicer for previously unreimbursed expenses incurred in maintaining
individual insurance policies pursuant to Section 3.04, or Liquidation
Expenses, paid pursuant to Section 3.07 or otherwise reimbursable pursuant to
the terms of this Agreement (to the extent not payable pursuant to Section
3.09), such withdrawal right being limited to amounts received on particular
Mortgage Loans (other than any Repurchase Price in respect thereof) that
represent late recoveries of the payments for which such advances were made,
or from related Net Liquidation Proceeds or the proceeds of the purchase of
such Mortgage Loan;
(d) to pay to itself out of each payment received on account of interest on a Mortgage
Loan as contemplated by Section 3.09, an amount equal to the related Servicing
Fee and the Recovery Fee (to the extent not retained pursuant to Section 3.02
or 3.07), and to pay to any Subservicer any subservicing fees not previously
withheld by such Subservicer;
(e) to the extent deposited in the Custodial Account, to pay to itself as additional
servicing compensation any (i) interest or investment income earned on funds
deposited in the Custodial Account that it is entitled to withdraw pursuant to
Sections 3.02(b) and 5.01, and (ii) Foreclosure Profits (to the extent
permitted by law);
(f) to pay to itself or a Seller, with respect to any Mortgage Loan or property acquired
in respect thereof that has been purchased or otherwise transferred to such
Seller, the Servicer or other entity, all amounts received thereon and not
required to be distributed to Securityholders as of the date on which the
related Purchase Price or Repurchase Price is determined;
(g) to withdraw any other amount deposited in the Custodial Account that was not required
to be deposited therein pursuant to Section 3.02;
(h) to pay to itself, with respect to any Mortgage Loan for which it has made a Servicer
Advance of delinquent principal or interest, any previously unreimbursed
Servicer Advances of such amounts theretofore made to the extent of receipts
of late recoveries of such payments from the related Mortgagors, out of
related Net Liquidation Proceeds or the proceeds of the purchase of such
Mortgage Loans;
(i) to reimburse itself for the amount of any investment earnings advanced prior to
maturity pursuant to Section 5.01, to the extent not reimbursed from earnings
received on the related investment at maturity;
(j) at its option, for so long as it is the sole Certificateholder, to pay to itself from
amounts otherwise required to be remitted to the Distribution Account in
accordance with Section 3.05(a)(xvi) of the Indenture, all amounts payable to
it as a Certificateholder on the related Payment Date, and
(k) to reimburse itself for Servicer Advances of delinquent principal or interest on a
Mortgage Loan or other advances that are made pursuant to this Agreement that
are not reimbursed pursuant to clauses (c) or (h) of this Section 3.03.
Since, in connection with withdrawals pursuant to clauses (c), (d), (f) and (h), the
Servicer's entitlement thereto is limited to collections or other recoveries on the related
Mortgage Loan, the Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Custodial
Account pursuant to such clauses. Notwithstanding any other provision of this Agreement,
the Servicer shall be entitled to reimburse itself for any previously unreimbursed expenses
incurred pursuant to Section 3.07 or otherwise reimbursable pursuant to the terms of this
Agreement that the Servicer determines to be otherwise nonrecoverable (except with respect
to any Mortgage Loan as to which the Repurchase Price has been paid), by withdrawal from the
Custodial Account of amounts on deposit therein attributable to the Mortgage Loans on any
Business Day prior to the Payment Date succeeding the date of such determination.
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses. To the extent
permitted under the related Mortgage Note and Mortgage, and to the extent the Servicer
receives notice that a hazard insurance policy has been cancelled, the Servicer shall cause
to be maintained for each Mortgage Loan hazard insurance naming the Servicer or related
Subservicer as loss payee thereunder providing extended coverage in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the improvements securing
such Mortgage Loan from time to time or (ii) the combined principal balance owing on such
Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time to time;
provided, however, that such coverage may not be less than the minimum amount required to
fully compensate for any loss or damage on a replacement cost basis. The Servicer shall use
its best efforts to monitor that hazard insurance is maintained as described in the previous
sentence in the same manner as it would for mortgage loans in its own portfolio. The
Servicer shall also cause to be maintained on property acquired upon foreclosure, or deed in
lieu of foreclosure, of any Mortgage Loan, fire insurance with extended coverage in an
amount which is at least equal to the amount necessary to avoid the application of any
co-insurance clause contained in the related hazard insurance policy. Amounts collected by
the Servicer under any such policies (other than amounts to be applied to the restoration or
repair of the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Servicer's normal servicing procedures) shall be
deposited in the Custodial Account to the extent called for by Section 3.02. In cases in
which any Mortgaged Property is located at any time during the life of a Mortgage Loan in a
federally designated flood area, to the extent permitted under the related Mortgage Note and
Mortgage, and to the extent the Servicer receives notice that the related flood insurance
has been cancelled, the hazard insurance to be maintained for the related Mortgage Loan
shall include flood insurance (to the extent available). All such flood insurance shall be
in amounts equal to the lesser of (i) the amount required to compensate for any loss or
damage to the related Mortgaged Property on a replacement cost basis and (ii) the maximum
amount of such insurance available for such Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is located is
participating in such program). The Servicer shall use its best efforts to monitor such
flood insurance as described in the previous sentence in the same manner as it would for
mortgage loans in its own portfolio. The Servicer shall be under no obligation to require
that any Mortgagor maintain earthquake or other additional insurance and shall be under no
obligation itself to maintain any such additional insurance on property acquired in respect
of a Mortgage Loan, 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 Servicer shall
obtain and maintain a blanket policy consistent with its general mortgage servicing
activities insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the first sentence
of this Section 3.04, 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 a policy complying with the first sentence
of this Section 3.04 and there shall have been a loss which would have been covered by such
policy, deposit in the Custodial Account the amount not otherwise payable under the blanket
policy because of such deductible clause. Any such deposit by the Servicer shall be made on
the last Business Day of the Collection Period in the month in which payments under any such
policy would have been deposited in the Custodial Account. In connection with its
activities as servicer of the Mortgage Loans, the Servicer agrees to present, on behalf of
itself, the Issuer and the Indenture Trustee, claims under any such blanket policy.
Section 3.05 Modification Agreements. The Servicer or the related Subservicer, as the case
may be, shall be entitled to (a) execute assumption agreements, substitution agreements, and
instruments of satisfaction or cancellation or of partial or full release or discharge, or
any other document contemplated by this Agreement and other comparable instruments with
respect to the Mortgage Loans and with respect to the related Mortgaged Properties (and the
Issuer and the Indenture Trustee each shall promptly execute any such documents on request
of the Servicer) and (b) approve the granting of an easement thereon in favor of another
Person, any alteration or demolition of such Mortgaged Properties or other similar matters,
if it has determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loans, that the security for, and the
timely and full collectability of, such Mortgage Loans would not be adversely affected
thereby. A partial release pursuant to this Section 3.05 shall be permitted only if the
CLTV for the related Mortgage Loan after such partial release does not exceed the CLTV for
such Mortgage Loan as of the related Cut-Off Date, and provided further that the Servicer
and the Enhancer have received an Opinion of Counsel to the effect that such partial release
will not result in an Adverse REMIC Event. Any fee collected by the Servicer or the related
Subservicer for processing such request will be retained by the Servicer or such Subservicer
as additional servicing compensation.
Section 3.06 Trust Estate; Related Documents.
(a) When required by the provisions of this Agreement, the Issuer or the Indenture
Trustee shall execute instruments to release property from the terms of the
Trust Agreement, Indenture or Custodial Agreement, as applicable, or convey
the Issuer's or the Indenture Trustee's interest in the same, in a manner and
under circumstances that are not inconsistent with the provisions of this
Agreement. No party relying upon an instrument executed by the Issuer or the
Indenture Trustee as provided in this Section 3.06 shall be bound to ascertain
the Issuer's or the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
(b) If from time to time any written assurance, assumption agreement or substitution
agreement or other similar agreement shall be executed pursuant to Section
3.05, the Servicer shall check that each of such documents purports to be an
original executed copy (or a copy of the original executed document if the
original executed copy has been submitted for recording and has not yet been
returned) and, if so, shall file such documents, and upon receipt of the
original executed copy from the applicable recording office or receipt of a
copy thereof certified by the applicable recording office shall file such
originals or certified copies, with the Related Documents held by the
Servicer.
(c) Upon receipt of a Request for Release from the Servicer, substantially in the form of
Exhibit C hereto, to the effect that a Mortgage Loan has been the subject of a
final payment or a prepayment in full and such Mortgage Loan has been
terminated or that substantially all Net Liquidation Proceeds that have been
determined by the Servicer in its reasonable judgment to be finally
recoverable have been recovered, and upon deposit to the Custodial Account of
such final monthly payment, prepayment in full together with accrued and
unpaid interest to the date of such payment with respect to such Mortgage Loan
or, if applicable, Net Liquidation Proceeds, the Custodian shall promptly
release the Related Documents held by the Custodian to the Servicer. The
Indenture Trustee shall execute such Related Documents, along with such
documents as the Servicer or the related Mortgagor may request to evidence
satisfaction and discharge of such Mortgage Loan, upon request of the
Servicer. If from time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Servicer requests the Custodian to
release the Related Documents held by the Custodian and delivers to the
Custodian a trust receipt reasonably satisfactory to the Custodian and signed
by a Responsible Officer of the Servicer, the Custodian shall release such
Related Documents to the Servicer. If such Mortgage Loans shall be liquidated
and the Custodian receives a certificate from the Servicer as provided above,
then, upon request of the Servicer, the Custodian shall release the trust
receipt to the Servicer.
Section 3.07 Realization Upon Defaulted Mortgage Loans. With respect to any Mortgage Loan
that comes into and continues in default, the Servicer shall decide whether to (i) foreclose
upon the related Mortgaged Property, (ii) write off the unpaid Principal Balance thereof as
bad debt, (iii) take a deed in lieu of foreclosure, (iv) accept a short sale (a payoff of
the Mortgage Loan for an amount less than the total amount contractually owed in order to
facilitate a sale of the Mortgaged Property by the Mortgagor), (v) permit a short
refinancing (a payoff of the Mortgage 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), (vi) arrange for a repayment plan, (vii) agree
to a modification in accordance with this Agreement or (viii) take an unsecured note 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 shall 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 as shall be required or permitted by
the Program Guide; 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 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 the related Net Liquidation Proceeds. In the event of a
determination by the Servicer that any such expenditure previously made pursuant to this
Section 3.07 will not be reimbursable from Net Liquidation Proceeds, the Servicer shall be
entitled to reimbursement of its funds so expended pursuant to Section 3.03.
Notwithstanding any provision of this Agreement, a Mortgage Loan may be deemed to be
finally liquidated if substantially all amounts expected by the Servicer to be received in
connection therewith have been received; provided, however, that the Servicer may continue
to pursue recovery of such Mortgage Loan and any Recovery Amount with respect to any such
Mortgage Loan shall be deposited into the Custodial Account. If the Servicer continues to
pursue recovery, the Servicer shall be entitled to the Recovery Fee with respect to that
Mortgage Loan and to be reimbursed for any Servicer Advances and expenses from Recovery
Amounts with respect to such Mortgage Loan as though such Mortgage Loan continued to be an
Outstanding Mortgage Loan hereunder. For purposes of determining the amount of any Net
Liquidation Proceeds, Insurance Proceeds or other unscheduled collections, the Servicer may
take into account minimal amounts of additional receipts expected to be received or any
estimated additional liquidation expenses expected to be incurred in connection with such
Mortgage Loan.
In the event that title to any Mortgaged Property is acquired in foreclosure or by
deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the
Indenture Trustee, which shall hold the same on behalf of the Issuer in accordance with
Section 3.13 of the Indenture. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such Mortgaged Property shall (except as
otherwise expressly provided herein) be considered to be an outstanding Mortgage Loan held
as an asset of the Issuer until such time as such property shall be sold. Consistent with
the foregoing for purposes of all calculations hereunder, so long as the related Mortgage
Loan shall be considered to be an outstanding Mortgage Loan, it shall be assumed that,
notwithstanding that the indebtedness evidenced by the related Mortgage Note shall have been
discharged, such Mortgage Note in effect at the time of any such acquisition of title before
any adjustment thereto by reason of any bankruptcy or similar proceeding or any moratorium
or similar waiver or grace period will remain in effect.
Any proceeds from foreclosure proceedings or the purchase or repurchase of any
Mortgage Loan pursuant to the terms of this Agreement, as well as any recovery resulting
from a collection of Net Liquidation Proceeds or Insurance Proceeds, shall be applied in the
following order of priority: first, to reimburse the Servicer or the related Subservicer in
accordance with this Section 3.07; second, to pay the Servicer or the related Subservicer
all Servicing Fees payable therefrom; third, to pay accrued and unpaid interest on such
Mortgage Loan, at the Net Loan Rate to the Payment Date on which such amounts are to be
deposited in the Note Payment Account or Distribution Account; and fourth, as a recovery of
principal on such Mortgage Loan. Any remaining amount shall constitute Foreclosure Profits.
In the event that the Trust acquires any Mortgaged Property as aforesaid or otherwise
in connection with a default or imminent default on a Mortgage Loan, the Servicer on behalf
the Trust shall dispose of such Mortgaged Property as soon as practicable, giving due
consideration to the interests of the Noteholders, the Certificateholders and the Enhancer,
but in all cases within three full years after the taxable year of its acquisition by the
Trust for purposes of Section 860G(a)(8) of the Code (or such shorter period as may be
necessary under applicable state (including any state in which such property is located) law
to maintain the status of any REMIC as a REMIC under applicable state law and avoid taxes
resulting from such property failing to be foreclosure property under applicable state law)
or, at the expense of the Trust, request, more than 60 days before the day on which such
grace period would otherwise expire, an extension of such grace period unless the Servicer
obtains for the Indenture Trustee an Opinion of Counsel, addressed to the Indenture Trustee,
the Enhancer and the Servicer, to the effect that the holding by the Trust of such Mortgaged
Property subsequent to such period will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code or cause the Trust to fail to qualify
as a REMIC (for federal (or any applicable State or local) income tax purposes) at any time
that any Certificates are outstanding, in which case the Trust may continue to hold such
Mortgaged Property (subject to any conditions contained in such Opinion of Counsel). The
Servicer shall be entitled to be reimbursed from the Custodial Account for any costs
incurred in obtaining such Opinion of Counsel, as provided in Section 3.03. Notwithstanding
any other provision of this Agreement, no Mortgaged Property acquired by the Trust shall be
rented (or allowed to continue to be rented) or otherwise used by or on behalf of the Trust
in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to
fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the
Code or (ii) subject any REMIC to the imposition of any federal income taxes on the income
earned from such Mortgaged Property, including any taxes imposed by reason of Section
860G(c) of the Code, unless the Servicer has agreed to indemnify and hold harmless the Trust
and the Enhancer with respect to the imposition of any such taxes.
Section 3.08 Issuer and Indenture Trustee to Cooperate. On or before each Payment Date,
the Servicer will notify the Indenture Trustee or the Custodian, with a copy to the Issuer,
of the termination of or the payment in full and the termination of any Mortgage Loan during
the preceding Collection Period. Upon receipt of payment in full, the Servicer is
authorized to execute, pursuant to the authorization contained in Section 3.01, an
instrument of satisfaction regarding the related Mortgage, which instrument of satisfaction
shall be recorded by the Servicer if required by applicable law and be delivered to the
Person entitled thereto and to cause the removal from the registration on the MERS(R)System
of such Mortgage. It is understood and agreed that any expenses incurred in connection with
such instrument of satisfaction or transfer shall be reimbursed from amounts deposited in
the Custodial Account. From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Custodian shall, upon request of the Servicer and
delivery to the Custodian, with a copy to the Issuer, of a Request for Release, in the form
attached hereto as Exhibit C, signed by a Servicing Officer, release or cause to be released
the related Mortgage Note to the Servicer. The Issuer or Indenture Trustee shall promptly
execute such documents, in the forms provided by the Servicer, as shall be necessary for the
prosecution of any such proceedings or the taking of other servicing actions. Such trust
receipt shall obligate the Servicer to return such Mortgage Note to the Custodian (as
specified in such receipt) when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate of a
Servicing Officer similar to that specified above, such trust receipt shall be released to
the Servicer.
In order to facilitate the foreclosure of the Mortgage securing any Mortgage Loan
that is in default following recordation of the related Assignment of Mortgage in accordance
with the provisions of the Purchase Agreement, the Indenture Trustee or the Issuer shall, if
so requested in writing by the Servicer, promptly execute an appropriate assignment in the
form provided by the Servicer to assign such Mortgage Loan for the purpose of collection to
the Servicer (any such assignment shall unambiguously indicate that the assignment is for
the purpose of collection only), and, upon such assignment, such assignee for collection
will thereupon bring all required actions in its own name and otherwise enforce the terms of
such Mortgage Loan and deposit or credit the Net Liquidation Proceeds, exclusive of
Foreclosure Profits, received with respect thereto into the Custodial Account. In the event
that all delinquent payments due under any such Mortgage Loan are paid by the Mortgagor and
any other defaults are cured, then the assignee for collection shall promptly reassign such
Mortgage Loan to the Indenture Trustee and return all Related Documents to the place where
the related Mortgage File was being maintained.
In connection with the Issuer's obligation to cooperate as provided in this Section
3.08 and all other provisions of this Agreement requiring the Issuer to authorize or permit
any actions to be taken with respect to the Mortgage Loans, the Indenture Trustee, as
pledgee of the Mortgage Loans and as assignee of record of the Mortgage Loans on behalf of
the Issuer pursuant to Section 3.13 of the Indenture, expressly agrees, on behalf of the
Issuer, to take all such actions on behalf of the Issuer and to promptly execute and return
all instruments reasonably required by the Servicer in connection therewith; provided, that
if the Servicer requests a signature of the Indenture Trustee, on behalf of the Issuer, then
the Servicer shall deliver to the Indenture Trustee an Officer's Certificate stating that
such signature is necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties under this Agreement.
Section 3.09 Servicing Compensation; Payment of Certain Expenses by Servicer. The Servicer
shall be entitled to receive the Servicing Fee in accordance with Section 3.03 as
compensation for its services in connection with servicing the Mortgage Loans. Moreover,
late payment charges and other receipts not required to be deposited in the Custodial
Account as specified in Section 3.02 shall be retained by the Servicer as additional
servicing compensation. The Servicer shall be required to pay all expenses incurred by it
in connection with its activities hereunder (including payment of all other fees and
expenses not expressly stated hereunder to be for the account of the Securityholders),
including the fees and expenses of the Owner Trustee, Indenture Trustee and the Custodian,
and shall not be entitled to reimbursement therefor.
Section 3.10 Annual Statement as to Compliance.
(a) The Servicer will deliver to the Depositor, the Credit Enhancer and the Indenture
Trustee on or before the earlier of (a) March 31 of each year or (b) with
respect to any calendar year during which the Depositor's annual report on
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, the date on which the annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and
the rules and regulations of the Commission, a servicer compliance
certificate, signed by an authorized officer of the Servicer, as described in
Item 1123 of Regulation AB, to the effect that:
(i) A review of the Servicer's activities during the reporting period and
of its performance under this Servicing Agreement has been made under such officer's
supervision; and
(ii) To the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Servicing Agreement in all
materials respects throughout the reporting period or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such failure known to
such officer and the nature and status thereof.
The Servicer shall use commercially reasonable efforts to obtain from all
other parties participating in the servicing function any additional certifications required
under Item 1123 of Regulation AB to the extent required to be included in a Report on Form
10-K; provided, however, that a failure to obtain such certifications shall not be a breach
of the Servicer's duties hereunder if any such party fails to deliver such a certification.
(b) The Servicer shall deliver to the Issuer and the Indenture Trustee, with a copy to
the Enhancer, promptly after having obtained knowledge thereof, but in no
event later than five Business Days thereafter, written notice by means of an
Officer's Certificate of any event which with the giving of notice or the
lapse of time or both, would become a Servicing Default.
Section 3.11 Annual Independent Public Accountants' Servicing Report. On or before the
earlier of (a) March 31 of each year or (b) with respect to any calendar year during which
the Depositor's annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, the date on which the annual
report is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the Servicer at its expense shall cause a firm of independent
public accountants, which shall be members of the American Institute of Certified Public
Accountants, to furnish a report to the Depositor and the Indenture Trustee the attestation
required under Item 1122(b) of Regulation AB. In rendering such statement, such firm may
rely, as to matters relating to the direct servicing of Home Loans by Subservicers, upon
comparable statements for examinations conducted by independent public accountants
substantially in accordance with standards established by the American Institute of
Certified Public Accountants (rendered within one year of such statement) with respect to
such Subservicers.
Section 3.12 Access to Certain Documentation and Information Regarding the Mortgage Loans.
Whenever required by statute or regulation, the Servicer shall provide to the Enhancer, any
Securityholder upon reasonable request (or a regulator for a Securityholder) or the
Indenture Trustee, reasonable access to the documentation regarding the Mortgage Loans.
Such access shall be afforded without charge, but only upon reasonable request and during
normal business hours at the offices of the Servicer. Nothing in this Section 3.12 shall
derogate from the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding Mortgagors, and the failure of the Servicer to provide
access as provided in this Section 3.12 as a result of such obligation shall not constitute
a breach of this Section 3.12.
Section 3.13 Maintenance of Certain Servicing Insurance Policies. The Servicer shall,
during the term of its service as servicer, maintain in force and effect (i) a policy or
policies of insurance covering errors and omissions in the performance of its obligations as
Servicer hereunder and (ii) a fidelity bond in respect of its officers, employees or
agents. Each such policy or policies and fidelity bond shall be at least equal to the
coverage that would be required by Xxxxxx Xxx or Xxxxxxx Mac, whichever is greater, for
Persons performing servicing for mortgage loans purchased by such entity.
Section 3.14 Information Required by the Internal Revenue Service and Reports of
Foreclosures and Abandonments of Mortgaged Property. The Servicer shall prepare and deliver
all federal and state information reports with respect to the Mortgage Loans when and as
required by all applicable state and federal income tax laws. In particular, with respect
to the requirement under Section 6050J of the Code to the effect that the Servicer or
Subservicer shall make reports of foreclosures and abandonments of any mortgaged property
for each year beginning in 2005, the Servicer or Subservicer shall file reports relating to
each instance occurring during the previous calendar year in which the Servicer (a) on
behalf of the Issuer, acquired an interest in any Mortgaged Property through foreclosure or
other comparable conversion in full or partial satisfaction of a Mortgage Loan, or (b) knew
or had reason to know that any Mortgaged Property had been abandoned. The reports from the
Servicer or Subservicer shall be in form and substance sufficient to meet the reporting
requirements imposed by Section 6050J and Section 6050H (reports relating to mortgage
interest received) of the Code.
Section 3.15 Optional Repurchase or Transfer of Mortgage Loans.
(a) Notwithstanding any provision in Section 3.07 to the contrary, the Servicer, at its
option and in its sole discretion, may repurchase any Mortgage Loan that is
delinquent in payment by a period of ninety (90) days or longer for a price
equal to the Repurchase Price, provided that any such repurchase shall occur
only during the 60-day period commencing on the first day of the next calendar
month.
(b) The Servicer shall repurchase any Mortgage Loan for a price equal to the Repurchase
Price (i) if the related Mortgage did not have a Lien senior to it as of the
related Cut-Off Date, and, at the request of the related Mortgagor, the
Servicer at its option and in its sole discretion agrees to the placement of a
Lien on the related Mortgaged Property senior to that of such Mortgage or
(ii) at the request of the Mortgagor, the Servicer agrees to the refinancing
of the Lien senior to that of the related Mortgage resulting in a CLTV that
does not satisfy the conditions set forth in Section 3.01(a) herein.
(c) Subject to the conditions set forth below, the Servicer, upon receipt of written
notice and direction from the Issuer, shall cause the retransfer of Mortgage
Loans from the Trust Estate to the Issuer as of the close of business on a
Payment Date (the "Transfer Date"). On the fifth Business Day (the "Transfer
Notice Date") prior to the Transfer Date designated in such notice, the
Servicer shall give the Indenture Trustee, the Rating Agencies and the
Enhancer a notice of the proposed retransfer that contains a list of the
Mortgage Loans to be retransferred. Such retransfers of Mortgage Loans shall
be permitted upon satisfaction of the following conditions:
(i) On the Transfer Date, the Overcollateralization Amount (after giving effect to the
removal from the Trust Estate of the Mortgage Loans proposed to be retransferred)
will equal or exceed the Overcollateralization Target Amount;
(ii) On or before the Transfer Date, the Servicer shall have delivered to the Indenture
Trustee a revised Mortgage Loan Schedule showing that the Mortgages Loans transferred
to the Certificateholders are no longer owned by the Trust Estate;
(iii) The Servicer shall represent and warrant that the Mortgage Loans to be removed from
the Trust Estate were selected at random and the Servicer shall have received the
consent of the Enhancer as to the selection of the particular Mortgage Loans to be
removed; and
(iv) The Servicer shall have delivered to the Indenture Trustee and the Enhancer an
officer's certificate certifying that the items set forth in subparagraphs (i)
through (v), inclusive, have been performed or are true and correct, as the case may
be. The Indenture Trustee may conclusively rely on such officer's certificate, shall
have no duty to make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
The Servicer shall not be permitted to effect the retransfer of any Mortgage Loan
except under the conditions specified above. Upon receiving the requisite notice and
direction from the Issuer, the Servicer shall perform in a timely manner those acts required
of it, as specified above. Upon satisfaction of the above conditions, on the Transfer Date
the Indenture Trustee shall deliver, or cause to be delivered, to the Issuer a written
itemization of each Mortgage Loan being transferred, together with the Mortgage File for
each such Mortgage Loan, and the Indenture Trustee shall execute and deliver to the Issuer
or its designee such other documents prepared by the Servicer as shall be reasonably
necessary to transfer such Mortgage Loans to the Certificateholders. Any such transfer of
the Trust Estate's right, title and interest in and to Mortgage Loans shall be without
recourse, representation or warranty by or of the Indenture Trustee or the Trust Estate to
the Issuer or its designee.
Section 3.16 Reserved.
Section 3.17 Reserved
Section 3.18 Pre-Funding Account.
(a) No later than the Closing Date, the Indenture Trustee shall establish and
maintain on behalf of itself one or more segregated trust accounts, which shall be Eligible
Accounts, titled "Pre-Funding Account, JPMorgan Chase Bank, National Association, as
Indenture Trustee for GMACM Home Equity Loan Trust 2006-HE2" (the "Pre-Funding Account").
Notwithstanding anything herein to the contrary, the Pre-Funding Account shall not be an
asset of any REMIC. To the extent that the Pre-Funding Account constitutes a reserve fund
for federal income tax purposes, (1) it shall be an outside reserve fund and not an asset
any REMIC, (2) it shall be owned by GMACM, as Seller and (3) amounts transferred any REMIC
to the Pre-Funding Account shall be treated as transferred to GMACM, as Seller, or any
successor, all within the meaning of Section 1.860G-2(h) of the Treasury Regulations. On the
Closing Date, GMACM shall deposit into the Pre-Funding Account an amount equal to the
Original Pre-Funded Amount from the proceeds of the sale of the Securities. On each
Subsequent Transfer Date, the Servicer shall instruct the Indenture Trustee in writing to
withdraw from the Pre-Funding Account an amount equal to the aggregate Principal Balance as
of the related Subsequent Cut-Off Date of the Subsequent Mortgage Loans to be sold to the
Trust on such Subsequent Transfer Date and purchased with funds on deposit in the
Pre-Funding Account, and to pay such amount to or upon the order of GMACM upon satisfaction
of the conditions set forth in this Agreement, in the Purchase Agreement and in the related
Subsequent Transfer Agreement with respect thereto.
(b) If the Pre-Funded Amount has not been reduced to zero at the close of business
on the last day of the Pre-Funding Period, after giving effect to any withdrawal therefrom
on such day, any remaining Pre-Funded Amount shall be deposited in the Note Payment Account
and applied as a principal distribution on the Notes on the next succeeding Payment Date in
accordance with the terms of the Indenture.
(c) The Servicer may cause the institution maintaining the Pre-Funding Account to
invest any funds therein in Permitted Investments having a maturity of up to 90 days or
maturing or otherwise available not later than the Business Day preceding the related
Payment Date on which funds are scheduled to be withdrawn to purchase Subsequent Mortgage
Loans; provided, that any investment in an obligation of the institution with which the
Pre-Funding Account is maintained may mature on or before 10:30 a.m., New York time, on such
Payment Date; and provided further, that no such investment may be sold or disposed of prior
to maturity. In addition, no such Permitted Investment shall be purchased at a price in
excess of par. Notwithstanding the foregoing, in the event investment earnings have not
matured on any Payment Date, the amount of such earnings accrued as of such Payment Date
shall be advanced by the Servicer for deposit into the Note Payment Account (which advance
shall be reimbursed to the Servicer from such investment earnings at maturity). At any time
when the Indenture Trustee is maintaining the Pre-Funding Account, any request by the
Servicer to invest funds on deposit therein shall be in writing, delivered to the Indenture
Trustee at or before 10:30 a.m., New York time, if such investment is to be made on such
day. The Servicer shall certify that the requested investment is a Permitted Investment
maturing at or prior to the time required hereby. Any such investment shall be registered
in the name of the Indenture Trustee or its nominee, and to the extent that any such
investment is certificated, such investment shall be maintained with the Indenture Trustee
at its Corporate Trust Office. All net income or other gain received from any such
investment shall be deposited into or credited to the Note Payment Account, and may be
withdrawn therefrom in accordance with Section 3.05 of the Indenture. In no event shall the
Indenture Trustee be liable for any investment losses on Permitted Investments held in or
credited to the Pre-Funding Account, provided that such investments are made in accordance
with the provisions of this Agreement and the Indenture Trustee is not the obligor under the
Permitted Investment.
Section 3.19 Capitalized Interest Account.
(a) No later than the Closing Date, the Indenture Trustee shall establish and
maintain on behalf of itself one or more segregated trust accounts, which shall be Eligible
Accounts, titled "Capitalized Interest Account, JPMorgan Chase Bank, National Association,
as Indenture Trustee for GMACM Home Equity Loan Trust 2006-HE2" (the "Capitalized Interest
Account"). The Indenture Trustee shall, promptly upon receipt, deposit in the Capitalized
Interest Account and retain therein the Interest Coverage Amount. Notwithstanding anything
herein to the contrary, the Capitalized Interest Account shall not be an asset of any
REMIC. To the extent that the Capitalized Interest Account constitutes a reserve fund for
federal income tax purposes, (1) it shall be an outside reserve fund and not an asset any
REMIC, (2) it shall be owned by GMACM, as Seller and (3) amounts transferred any REMIC to
the Capitalized Interest Account shall be treated as transferred to GMACM, as Seller, or any
successor, all within the meaning of Section 1.860G-2(h) of the Treasury Regulations. If the
Indenture Trustee shall not have received an investment direction from GMACM, the Indenture
Trustee shall invest funds on deposit in the Capitalized Interest Account in Permitted
Investments of the kind described in clause (v) of the definition of Permitted Investments
having a maturity date no later than the next succeeding Payment Date. In addition, no such
Permitted Investment shall be purchased at a price in excess of par. The Servicer shall be
entitled to retain any investment earnings on amounts on deposit in the Capitalized Interest
Account and shall deposit into the Capitalized Interest Account the amount of any net loss
incurred in respect of any such Permitted Investment immediately upon realization of such
loss without any right of reimbursement therefor. The Servicer shall be the owner of the
Capitalized Interest Account and shall report all items of income, deduction, gain or loss
arising therefrom. In no event shall the Indenture Trustee be liable for any investment
losses on Permitted Investments held in or credited to the Capitalized Interest Account,
provided that such investments are made in accordance with the provisions of this Agreement
and the Indenture Trustee is not the obligor under the Permitted Investment.
(b) On each Payment Date during the Pre-Funding Period and on the Payment Date
immediately after the end of the Pre-Funding Period, the Indenture Trustee, at the written
direction of the Servicer, shall withdraw from the Capitalized Interest Account and deposit
into the Note Payment Account an amount equal to the Capitalized Interest Requirement for
such Payment Date.
(c) In connection with each Subsequent Transfer Date occurring in the Pre-Funding
Period, the Servicer, at its option, may recalculate the Interest Coverage Amount and shall
notify the Indenture Trustee of such calculation taking into account the amount remaining in
the Pre-Funding Account following the sale of Subsequent Mortgage Loans to the Trust on such
date. The recomputed Interest Coverage Amount shall be not less than the amount necessary to
cover the Capitalized Interest Requirement for each remaining Payment Date in the
Pre-Funding Period. On any such Subsequent Transfer Date, GMACM shall instruct in writing
the Indenture Trustee to pay to it from funds in the Capitalized Interest Account the excess
of the amount on deposit therein over the recomputed Interest Coverage Amount notified to
the Indenture Trustee.
(d) Upon the earlier of (i) termination of the Trust Agreement in accordance with
Section 8.01 thereof and (ii) the Payment Date following the end of the Pre-Funding Period,
any amount remaining on deposit in the Capitalized Interest Account shall be withdrawn by
the Indenture Trustee and paid to GMACM.
Section 3.20 Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements;
Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Servicer or
Subservicer, to the extent it has knowledge of such conveyance, shall enforce
any due-on-sale clause contained in any Mortgage Note or Mortgage, to the
extent permitted under applicable law and governmental regulations, but only
to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing:
(i) the Servicer shall not be deemed to be in default under this Section 3.20(a) by
reason of any transfer or assumption which the Servicer is restricted by law from
preventing; and
(ii) if the Servicer determines that it is reasonably likely that any Mortgagor will
bring, or if any Mortgagor does bring, legal action to declare invalid or otherwise
avoid enforcement of a due-on-sale clause contained in any Mortgage Note or Mortgage,
the Servicer shall not be required to enforce the due-on-sale clause or to contest
such action.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to the extent set
forth in Section 3.20(a), in any case in which a Mortgaged Property is to be
conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption or modification agreement or supplement to the Mortgage Note or
Mortgage which requires the signature of the Indenture Trustee, or if an
instrument of release signed by the Indenture Trustee is required releasing
the Mortgagor from liability on the Mortgage Loan, the Servicer is authorized,
subject to the requirements of the sentence next following, to execute and
deliver, on behalf of the Indenture Trustee, the assumption agreement with the
Person to whom the Mortgaged Property is to be conveyed and such modification
agreement or supplement to the Mortgage Note or Mortgage or other instruments
as are reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person provided, however,
none of such terms and requirements shall either (i) both (A) constitute a
"significant modification" effecting an exchange or reissuance of such
Mortgage Loan under the REMIC Provisions and (B) cause any REMIC to fail to
qualify as a REMIC under the Code, or (subject to Section 11.01(f) of the
Indenture), result in the imposition of any tax on "prohibited transactions"
or (ii) constitute "contributions" after the start-up date under the REMIC
Provisions. The Servicer shall execute and deliver such documents only if it
reasonably determines that (i) its execution and delivery thereof will not
conflict with or violate any terms of this Agreement or cause the unpaid
balance and interest on the Mortgage Loan to be uncollectible in whole or in
part, (ii) any required consents of insurers under any Required Insurance
Policies have been obtained and (iii) subsequent to the closing of the
transaction involving the assumption or transfer (A) such transaction will not
adversely affect the coverage under any Required Insurance Policies, (B) the
Mortgage Loan will fully amortize over the remaining term thereof, (C) no
material term of the Mortgage Loan (including the interest rate on the
Mortgage Loan) will be altered nor will the term of the Mortgage Loan be
changed and (D) if the seller/transferor of the Mortgaged Property is to be
released from liability on the Mortgage Loan, such release will not (based on
the Servicer's or Subservicer's good faith determination) adversely affect the
collectability of the Mortgage Loan. Upon receipt of appropriate instructions
from the Servicer in accordance with the foregoing, the Indenture Trustee
shall execute any necessary instruments for such assumption or substitution of
liability as directed in writing by the Servicer. Upon the closing of the
transactions contemplated by such documents, the Servicer shall cause the
originals or true and correct copies of the assumption agreement, the release
(if any), or the modification or supplement to the Mortgage Note or Mortgage
to be delivered to the Indenture Trustee or the Custodian and deposited with
the Mortgage File for such Mortgage Loan. Any fee collected by the Servicer
or such related Subservicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer or such Subservicer as
additional servicing compensation.
Section 3.21 Advance Facility.
(a) The Servicer is hereby authorized to enter into any facility (an "Advance Facility")
with any Person (any such Person, an "Advance Facility Counterparty"), without
the consent of any party to this Agreement or the Enhancer, which provides
that the Servicer may pledge or sell its rights to receive reimbursement of
Servicer Advances pursuant to this Agreement ("Advance Reimbursement Rights")
pursuant to credit facilities, repurchase facilities, or similar facilities
providing liquidity for the funding of the Servicer Advances, including
facilities providing that such Advance Facility Counterparty may make all or a
portion of the Servicer Advances. Notwithstanding the existence of any
Advance Facility under which an Advance Facility Counterparty agrees to fund
Servicer Advances on the Servicer's behalf, the Servicer shall remain
obligated pursuant to this Agreement to make any Servicer Advances as required
by this Agreement, and shall not be relieved of such obligations by virtue of
such Advance Facility.
(b) If the Servicer enters into an Advance Facility, and for so long as an Advance
Facility Counterparty remains entitled to receive reimbursement for any
Servicer Advances ("Advance Reimbursement Amount"), then the Servicer shall
identify such Advance Reimbursement Amount as received, consistently with the
reimbursement rights set forth in Sections 3.03 of this Agreement, and shall
remit such Advance Reimbursement Amount in accordance with the documentation
establishing the Advance Facility to such Advance Facility Counterparty or to
a trustee, agent or custodian (an "Advance Facility Trustee") designated by
such Advance Facility Counterparty. Notwithstanding the foregoing, if so
required pursuant to the terms of the Advance Facility, the Servicer may
withdraw from the Custodial Account or direct the Indenture Trustee to
withdraw, as applicable, and the Servicer shall, or if so directed, the
Indenture Trustee is hereby authorized to and shall pay to the Advance
Facility Counterparty or the Advance Facility Trustee the Advance
Reimbursement Amount identified pursuant to the preceding sentence.
(c) The Advance Reimbursement Amount shall consist solely of amounts in respect of
Servicer Advances made with respect to the Mortgage Loans for which the
Servicer would be permitted to reimburse itself in accordance with this
Agreement, assuming the Servicer had made the related Servicer Advances. Any
Advance Reimbursement Amount that the Servicer, in its capacity as Servicer,
is entitled to be paid shall not be included in distributions to Noteholders.
An Advance Facility Counterparty whose obligations are limited to the making
of Servicer Advances will not be deemed to be a Subservicer under this
Agreement or be required to meet the criteria for qualification as a
Subservicer under this Agreement.
(d) Any Advance Reimbursement Amount allocated to reimburse Servicer Advances made with
respect to any particular Mortgage Loan shall be allocated to the
reimbursement of the unreimbursed Servicer Advances made with respect to that
Mortgage Loan on a "first-in, first out" ("FIFO") basis, such that the Advance
Reimbursement Amount shall be applied to reimburse the Servicer Advance for
that Mortgage Loan that was disbursed earliest in time first, and to reimburse
the Servicer Advance for that Mortgage Loan that was disbursed latest in time,
last. The Servicer shall provide to the related Advance Facility Counterparty
or Advance Facility Trustee loan-by-loan information with respect to each
Advance Reimbursement Amount remitted to such Advance Facility Counterparty or
Advance Facility Trustee, to enable the Advance Facility Counterparty or
Advance Facility Trustee to make the FIFO allocation of each such Advance
Reimbursement Amount with respect to each Mortgage Loan.
(e) Upon request of the Servicer, the Indenture Trustee agrees to execute such
acknowledgments, certificates, and other documents recognizing the interests
of any Advance Facility Counterparty in such Advance Reimbursement Rights as
the Servicer may cause to be made subject to Advance Facilities pursuant to
this Section 3.21.
(f) The Indenture Trustee shall not, as a result of the existence of any Advance
Facility, have any duty or liability with respect to the calculation of any
Advance Reimbursement Amount nor have any responsibility to track or monitor
the administration of the Advance Facility.
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 and
the Indenture Trustee pursuant to Section 3.26 of the Indenture shall forward
or cause to be forwarded by mail or otherwise make available electronically at
xxx.xxxxxxxx.xxx/xxx to each Certificateholder, Noteholder, the Enhancer, the
Depositor, the Owner Trustee, the Certificate Paying Agent and each Rating
Agency, a statement setting forth the following information (the "Servicing
Certificate") as to the Notes and Certificates, to the extent applicable:
(i) the applicable Record Date, Determination Date and Payment Date;
(ii) the aggregate amount of payments received with respect to the Mortgage Loans,
including prepayment amounts;
(iii) the Servicing Fee payable to the Servicer;
(iv) the amount of any other fees or expenses paid, and the identity of the party
receiving such fees or expenses;
(v) the aggregate amount of (a) Interest Collections, (b) Principal Collections,
(c) Substitution Adjustment Amounts and (d) Excess Spread, for the related Collection
Period;
(vi) the amount paid as principal to the Noteholders;
(vii) the amount paid as interest to the Noteholders and the amount of any Relief Act
Shortfalls for the related Payment Date;
(viii) the aggregate amount of interest remaining unpaid, if any, for each of the Notes,
after giving effect to the payments made on such Payment Date;
(ix) each Policy Draw Amount, if any, for such Payment Date, the aggregate amount of prior
draws on the Policy thereunder not yet reimbursed the amount paid to the Credit
Enhancer in reimbursement for prior draws;
(x) the amount of such distribution as principal and interest to the Certificateholders
of the Certificates, separately stating the portion thereof which resulted in a
reduction of the Certificate Balance thereof;
(xi) the aggregate Principal Balance of the Mortgage Loans as of the end of the related
Collection Period;
(xii) the number and aggregate Principal Balances of Mortgage Loans (a) as to which the
Minimum Monthly Payment is delinquent for 30-59 days, 60-89 days, 90-119 days,
120-149 days, 150-179 days and greater than 180 days, respectively, (b) the related
Mortgaged Property of which has been foreclosed upon and (c) as to which the related
Mortgaged Property has become REO Property, in each case as of the end of the related
Collection Period; provided, however, that such information shall not be provided on
the statements relating to the first Payment Date;
(xiii) the number and aggregate Principal Balance of Mortgage Loans repurchased pursuant to
Section 3.15(a) herein during the related Collection Period;
(xiv) the Net WAC Rate for the related Collection Period;
(xv) the aggregate Liquidation Loss Amounts with respect to the related Collection Period,
the amount distributed as principal to Noteholders in respect of Liquidation Loss
Amounts and the aggregate of the Liquidation Loss Amounts (minus any Subsequent Net
Recovery Amounts) from all Collection Periods to date expressed as dollar amount and
as a percentage of the aggregate Cut-Off Date Principal Balances of the Mortgage
Loans;
(xvi) the aggregate Note Balance and the Certificate Balance after giving effect to the
distribution of principal on such Payment Date;
(xvii) the balance of the Pre-Funding Account and Capitalized Interest Account, as of the
end of the related Collection Period;
(xviii) the Percentage Interest applicable to each of the Securities, after application of
payments made on such Payment Date;
(xix) the Overcollateralization Amount as of the end of the related Collection Period; and
(xx) the aggregate Principal Balance of Subsequent Mortgage Loans transferred to the Trust
Estate during the related Collection Period.
In the case of information furnished pursuant to clauses (vi) and (vii) above, the
amounts shall be expressed as an aggregate dollar amount per Note or Certificate, as
applicable, with a $25,000 denomination per Note and with a denomination equal to a 100%
Percentage Interest per Certificate.
If a Servicing Default shall occur, on the Business Day following the related
Determination Date, the Servicer shall forward to the Indenture Trustee a statement to such
effect, including the nature of such Servicing Default. The Indenture Trustee, pursuant to
Section 3.26 of the Indenture, shall deliver or cause to be delivered by mail to each
Certificateholder, each Noteholder, the Enhancer, the Depositor, the Owner Trustee, the
Certificate Paying Agent and each Rating Agency, notice of such Servicing Default, including
the nature thereof. Such statement may be included in, or separate from, the regular
statement made available to Securityholders.
The Indenture Trustee will make the Servicing Certificate (and, at its option, any
additional files containing the same information in an alternative format) available each
month to Securityholders, and other parties to this Agreement via the Indenture Trustee's
internet website. The Indenture Trustee's internet website shall initially be located at
"xxx.xxxxxxxx.xxx/xxx." Assistance in using the website can be obtained by calling the
Indenture Trustee's customer service desk at (000) 000-0000. Parties that are unable to use
the above distribution options are entitled to have a paper copy mailed to them via first
class mail by calling the customer service desk and indicating such. The Indenture Trustee
shall have the right to change the way the statements to Securityholders are distributed in
order to make such distribution more convenient or more accessible to the above parties and
the Indenture Trustee shall provide timely and adequate notification to all above parties
regarding any such changes. The Indenture Trustee may require registration and the
acceptance of a disclaimer in connection with access to its website.
(b) The Servicer shall 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 Payment Account or Distribution
Account on the Business Day preceding the related Payment Date pursuant to
Section 3.03. The determination by the Servicer of such amounts shall, in the
absence of obvious error, be deemed to be presumptively correct for all
purposes hereunder, and the Owner Trustee and the 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 such 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 Returns and 1934 Act Reports
(a) The Servicer will act as the Tax Matters Partner or the agent for the Tax Matters
Partner pursuant to the Trust Agreement. The Servicer agrees to perform the
obligations of the Servicer set forth in Section 5.03 of the Trust Agreement.
The Servicer will prepare and file or cause to be prepared and filed all tax
and information returns of the Trust Estate.
(b) he Servicer shall, on behalf of the Depositor and in respect of the Trust Estate,
sign and cause to be filed with the Commission any periodic reports required
to be filed under the provisions of the Exchange Act, and the rules and
regulations of the Commission thereunder including, without limitation,
reports on Form 10-K, Form 10-D and Form 8-K. In connection with the
preparation and filing of such periodic reports, the Indenture Trustee shall
timely provide to the Servicer (I) a list of Securityholders as shown on the
Certificate Register and the Note Register as of the end of each calendar
year, (II) copies of all pleadings, other legal process and any other
documents relating to any claims, charges or complaints involving the
Indenture Trustee, as trustee hereunder, or the Trust Estate that are received
by the Indenture Trustee, (III) notice of all matters that, to the actual
knowledge of a Responsible Officer of the Indenture Trustee, have been
submitted to a vote of the Securityholders, other than those matters that have
been submitted to a vote of the Securityholders at the request of the
Depositor or the Servicer, and (IV) notice of any failure of the Indenture
Trustee to make any distribution to the Securityholders as required pursuant
to this Agreement. The Indenture Trustee shall not have any liability with
respect to the Servicer's failure to properly prepare or file such periodic
reports and the Servicer shall not have any liability with respect to such
failure resulting from or relating to the Servicer's inability or failure to
obtain any information not resulting from the Servicer's own negligence or
willful misconduct.
(c) Any Form 10-K filed with the Commission in connection with this Section 4.03 shall
include:
(i) A certification, signed by the senior officer in charge of the
servicing functions of the Servicer, in the form attached as Exhibit E hereto or such
other form as may be required or permitted by the Commission (the "Form 10-K
Certification"), in compliance with Rules 13a-14 and 15d-14 under the Exchange Act
and any additional directives of the Commission.
(ii) A report regarding its assessment of compliance during the preceding
calendar year with all applicable servicing criteria set forth in relevant Commission
regulations with respect to mortgage-backed securities transactions taken as a whole
involving the Servicer that are backed by the same types of assets as those backing
the certificates, as well as similar reports on assessment of compliance received
from other parties participating in the servicing function as required by relevant
Commission regulations, as described in Item 1122(a) of Regulation AB. The Servicer
shall obtain from all other parties participating in the servicing function any
required certifications.
(iii) With respect to each assessment report described immediately above, a
report by a registered public accounting firm that attests to, and reports on, the
assessment made by the asserting party, as set forth in relevant Commission
regulations, as described in Regulation 1122(b) of Regulation AB and Section 3.11.
(iv) The servicer compliance certificate required to be delivered pursuant
Section 3.10.
(d) In connection with the Form 10-K Certification, the Indenture Trustee shall provide
the Servicer with a back-up certification substantially in the form attached
hereto as Exhibit D-2.
(e) This Section 4.03 may be amended in accordance with this Servicing Agreement without
the consent of the Securityholders.
(f) The Indenture Trustee shall make available on the Indenture Trustee's internet
website each of the reports filed with the Commission by or on behalf of the
Depositor under the Exchange Act, as soon as reasonably practicable upon
delivery of such reports to the Indenture Trustee.
ARTICLE V
Note Payment Account
Section 5.01 Note Payment Account. The Indenture Trustee shall establish and maintain an
Eligible Account entitled "JPMorgan Chase Bank, National Association, as Indenture Trustee,
for the benefit of the Securityholders, the Certificate Paying Agent and the Enhancer,
pursuant to the Indenture, dated as of June 29, 2006, between GMACM Home Equity Loan Trust
2006-HE2 and JPMorgan Chase Bank, National Association" (the "Note Payment Account"). On
each Payment Date, amounts on deposit in the Note Payment Account shall be distributed by
the Indenture Trustee in accordance with Section 3.05 of the Indenture. Amounts on deposit
in the Note Payment Account will remain uninvested and all benefit therefrom shall be for
the benefit of the Indenture Trustee.
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 Person 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 Person 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
Agreement; provided, that the Person accepting such assignment or delegation shall be a
Person qualified to service mortgage loans, is reasonably satisfactory to the Enhancer
(provided, that such consent to assignment may not be unreasonably withheld), is willing to
service the Mortgage Loans and executes and delivers to the Issuer (with a copy to the
Enhancer) an agreement, in form and substance reasonably satisfactory to the Enhancer, that
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
Agreement; and provided further, that no Rating Event will occur as a result of such
assignment and delegation (as evidenced by a letter to such effect from each Rating Agency),
if determined without regard to the Policy; and provided further, that the Owner Trustee
shall receive an Opinion of Counsel to the effect that such assignment or delegation will
not result in an Adverse REMIC Event.
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 Agreement; provided, however, that this provision shall not protect the Servicer or any
such Person against any liability that 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, officer, 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 Agreement
or the Securities, including any amount paid to the Owner Trustee or the Indenture Trustee
pursuant to Section 6.06(b), other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and 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 that is not incidental to its duties to service the
Mortgage Loans in accordance with this Agreement, and that 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 that it may deem necessary or desirable in respect of this
Agreement, 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 (a)
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 Agreement or (b) upon
satisfaction of the following conditions: (i) the Servicer shall have proposed a successor
Servicer to the Issuer and the Indenture Trustee in writing and such proposed successor
Servicer is reasonably acceptable to the Issuer, the Indenture Trustee and the Enhancer;
(ii) each Rating Agency shall have delivered a letter to the Issuer, the Enhancer 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 cause a
Rating Event, if determined without regard to the Policy; and (iii) such proposed successor
Servicer is reasonably acceptable to the Enhancer, as evidenced by a letter to the Issuer
and the Indenture Trustee; provided, however, that no such resignation by the Servicer shall
become effective until such successor Servicer or, in the case of (a) above, the Indenture
Trustee, as pledgee of the Mortgage Loans, shall have assumed the Servicer's
responsibilities and obligations hereunder or the Indenture Trustee, as pledgee of the
Mortgage 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 and the Enhancer.
Section 6.05 Delegation of Duties. 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, that 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 obligations, liabilities and responsibilities with respect to
such duties and shall not constitute a resignation within the meaning of Section 6.04.
Section 6.06 Payment of Indenture Trustee's and Owner Trustee's Fees and Expenses;
Indemnification.
(a) After the Closing Date, the Servicer covenants and agrees to pay to the Owner
Trustee, the Indenture Trustee and any co-trustee of the Indenture Trustee or
the Owner Trustee from time to time, and the Owner Trustee, the Indenture
Trustee and any such co-trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust and, in the case of the
Indenture Trustee, for so long as GMAC Mortgage Corporation is the Servicer
shall be as set forth in the letter agreement between the Indenture Trustee
and the Servicer dated as of June 22, 2006) for all services rendered by each
of them in the execution of the trusts created under the Trust Agreement and
the Indenture and in the exercise and performance of any of the powers and
duties under the Trust Agreement or the Indenture, as the case may be, of the
Owner Trustee, the Indenture Trustee and any co-trustee, and the Servicer will
pay or reimburse the Indenture Trustee and any co-trustee upon request for all
reasonable expenses, disbursements and advances incurred or made by the
Indenture Trustee or any co-trustee in accordance with any of the provisions
of this Agreement, the Indenture or the Trust Agreement except any such
expense, disbursement or advance as may arise from its negligence, willful
misfeasance or bad faith. In addition, the Indenture Trustee shall be
entitled to be reimbursed from the Servicer for all reasonable costs
associated with the transfer of servicing from the predecessor servicer
pursuant to Section 7.02 hereunder, including, without limitation, any
reasonable costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such
servicing data as may be required by the Indenture Trustee to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Indenture Trustee to service the Mortgage Loans properly and effectively.
(b) The Servicer agrees to indemnify the Indenture Trustee and the Owner Trustee for, and
to hold the Indenture Trustee and the Owner Trustee, as the case may be,
harmless against, any loss, liability or expense incurred without negligence,
bad faith or willful misconduct on the part of the Indenture Trustee or the
Owner Trustee, as the case may be, arising out of, or in connection with, the
acceptance and administration of the Issuer and the assets thereof, including
the costs and expenses (including reasonable legal fees and expenses) of
defending the Indenture Trustee or the Owner Trustee, as the case may be,
against any claim in connection with the exercise or performance of any of its
powers or duties under any Basic Document; provided that:
(i) with respect to any such claim, the Indenture Trustee or Owner Trustee, as the case
may be, shall have given the Servicer written notice thereof promptly
after the Indenture Trustee or Owner Trustee, as the case may be, shall
have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Issuer, the Indenture Trustee or
Owner Trustee, as the case may be, shall cooperate and consult fully
with the Servicer in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the Servicer shall not be
liable for settlement of any claim by the Indenture Trustee or the
Owner Trustee, as the case may be, entered into without the prior
consent of the Servicer.
No termination of this Agreement or resignation or removal of the Indenture Trustee shall
affect the obligations created by this Section 6.06 of the Servicer to indemnify the
Indenture Trustee and the Owner Trustee under the conditions and to the extent set forth
herein.
Notwithstanding the foregoing, the indemnification provided by the Servicer in this
Section 6.06(b) shall not pertain to any loss, liability or expense of the Indenture Trustee
or the Owner Trustee, including the costs and expenses of defending itself against any
claim, incurred in connection with any actions taken by the Indenture Trustee or the Owner
Trustee at the direction of the Noteholders or Certificateholders, as the case may be,
pursuant to the terms of this Agreement.
ARTICLE VII
Default
Section 7.01 Servicing Default.
(a) If a Servicing Default shall occur and be continuing, 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, upon actual knowledge of the
occurrence of a Servicing Default (in each case with the consent of the
Enhancer so long as no Enhancer Default exists), or the Enhancer, by notice
then given in writing to the Servicer, the Issuer and the Indenture Trustee,
may terminate all of the rights and obligations of the Servicer as servicer
under this Agreement other than its right to receive servicing compensation
and expenses for servicing the Mortgage Loans hereunder during any period
prior to the date of such termination, and the Enhancer or the Issuer or the
Indenture Trustee (in each case with the consent of the Enhancer so long as no
Enhancer Default exists), 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, the Enhancer and the Issuer. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Securities or the Mortgage Loans
or otherwise, shall pass to and be vested in the Indenture Trustee, subject to
Section 7.02 hereof, as pledgee of the Mortgage Loans, 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 Mortgage Loan and related documents, or
otherwise. The Servicer agrees to cooperate with the Issuer, the Enhancer and
Indenture Trustee, as the case may be, 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 Mortgage 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 Mortgage Loans, the
recordation of Assignments of Mortgages to the Indenture Trustee if MERS is
not the mortgagee of a Mortgage Loan, and the delivery of the Mortgage Files
in its possession to the Indenture Trustee. All reasonable costs and expenses
(including, but not limited to, attorneys' fees) incurred in connection with
amending this 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.
(b) 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 Mortgage 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 3.03 and 3.09 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 clause (i)
or (ii) of the definition of Servicing Default, after the applicable grace periods specified
therein, 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 Agreement. The Servicer shall provide the
Indenture Trustee, the Enhancer and the Securityholders with notice of any 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, the Enhancer and the Issuer in
writing of any Servicing Default.
Section 7.02 Indenture Trustee to Act; Appointment of Successor.
(a) (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 as pledgee of the Mortgage Loans shall itself become, or shall with
the consent of the Enhancer appoint an affiliate of the Indenture Trustee to
become the successor in all respects to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall immediately assume all of the obligations of the Servicer to
make advances on Mortgage Loans under Section 3.02(b) and will be subject to
all other responsibilities, duties and liabilities relating thereto placed on
the Servicer by the terms and provisions hereof as soon as practicable, but in
no event later than 90 days after the Indenture Trustee becomes successor
servicer. During such 90 day period, the Indenture Trustee, with the consent
of the Enhancer, may require the Servicer being terminated to continue to
perform such servicing responsibilities (other than making advances on the
Mortgage Loans under Section 3.02(b)) as the Indenture Trustee deems
appropriate. In such event, the Servicer being terminated shall provide such
services as directed by the Indenture Trustee until the earliest of the date
the Indenture Trustee notifies such Servicer to discontinue providing such
services, the date on which a successor servicer or the Indenture Trustee has
assumed all responsibilities, duties and liabilities of the Servicer hereunder
or the expiration of the 90 day period. The Servicer shall be entitled to the
Servicing Fee hereunder for any period during which the Servicer is obligated
to provide such services as if no termination of the Servicer had occurred.
Nothing in this Agreement or in the Trust Agreement shall be construed to
permit or require the Indenture Trustee to (i) succeed to the
responsibilities, duties and liabilities of the initial Servicer in its
capacity as Seller under the Purchase Agreement, (ii) be responsible or
accountable for any act or omission of the Servicer prior to the issuance of a
notice of termination hereunder, (iii) require or obligate the Indenture
Trustee, in its capacity as successor Servicer, to purchase, repurchase or
substitute any Mortgage Loan, (iv) fund any losses on any Permitted Investment
directed by any other Servicer, or (v) 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 foregoing, if the Indenture Trustee is (x) unwilling to
act as successor Servicer itself or to appoint an affiliate to become
successor Servicer, or (y) legally unable so to act, the Indenture Trustee as
pledgee of the Mortgage Loans may (in the situation described in clause (x))
or shall (in the situation described in clause (y)) appoint at the direction
of the Enhancer or, if the Enhancer fails to make such direction, petition a
court of competent jurisdiction to appoint any established housing and home
finance institution, bank or other mortgage 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 any such successor Servicer shall be
acceptable to the Enhancer, as evidenced by the Enhancer's prior written
consent, which consent shall not be unreasonably withheld; and provided
further, that the appointment of any such successor Servicer will not result
in a Rating Event, if determined without regard to the Policy. Pending
appointment of a successor to the Servicer hereunder, unless the Indenture
Trustee is prohibited by law from so acting, the Indenture Trustee itself
shall act or appoint an affiliate to act in such capacity as provided above.
In connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Mortgage Loans in an
amount equal to the compensation that the Servicer would otherwise have
received pursuant to Section 3.09 (or such other 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 that may
have arisen under this Agreement prior to its termination as Servicer
(including the obligation to purchase Mortgage Loans pursuant to Section 3.01,
to pay any deductible under an insurance policy pursuant to Section 3.04 or to
indemnify the Indenture Trustee pursuant to Section 6.06), 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 Agreement and the requirements (including any notice requirements) of
applicable law, as shall be necessary to effectuate any such succession.
Notwithstanding the foregoing, the Indenture Trustee, in its capacity as
successor Servicer, shall not be responsible for the lack of information
and/or documents that it cannot obtain through reasonable efforts or for
failing to take any action that the Indenture Trustee is legally prohibited
from taking by applicable law.
(b) Any successor, including the Indenture Trustee, to the Servicer as servicer shall
during its term as Servicer (i) continue to service and administer the
Mortgage Loans for the benefit of the Securityholders, (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 3.13 and (iii) be bound by the
terms of the Insurance Agreement.
(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.
(d) In connection with the termination or resignation of the Servicer hereunder, either
(i) the successor Servicer, including the Indenture Trustee if the Indenture
Trustee is acting as successor Servicer, shall represent and warrant that it
is a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS, in which case
the predecessor Servicer shall cooperate with the successor Servicer in
causing MERS to revise its records to reflect the transfer of servicing to the
successor Servicer as necessary under MERS' rules and regulations, or (ii) the
predecessor Servicer shall cooperate with the successor Servicer in causing
MERS to execute and deliver an assignment of Mortgage in recordable form to
transfer the Mortgage from MERS to the Indenture Trustee and to execute and
deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R)System to the successor Servicer. The
predecessor Servicer shall file or cause to be filed any such assignment in
the appropriate recording office. The predecessor Servicer shall bear any and
all fees of MERS, costs of preparing any assignments of Mortgage, and fees and
costs of filing any assignments of Mortgage that may be required under this
subsection (d). The successor Servicer shall cause such assignment to be
delivered to the Indenture Trustee or the Custodian promptly upon receipt of
the original with evidence of recording thereon or a copy certified by the
public recording office in which such assignment was recorded.
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 Enhancer, the
Issuer and each Rating Agency.
Section 7.04 Servicing Termination Event; Removal of Servicer .
(a) Upon determination by the Credit Enhancer that a Servicing Termination Event has
occurred, the Credit Enhancer shall give written notice of such Servicing
Termination Event to the Servicer, the Depositor, the Indenture Trustee and to
each Rating Agency.
(b) At any time after such determination and while a Servicing Termination Event is
continuing, the Credit Enhancer may direct the Indenture Trustee in writing to
remove the Servicer if the Credit Enhancer makes a determination that the
manner of servicing was a factor contributing to the size of the delinquencies
or losses incurred in the Trust Estate.
(c) Upon receipt of directions to remove the Servicer pursuant to the preceding
clause (b), the Indenture Trustee shall notify the Servicer that it has been
terminated and the Servicer shall be terminated in the same manner as
specified in Sections 7.01 and 7.02.
(d) After notice of occurrence of a Servicing Termination Event has been given and while
a Servicing Termination Event is continuing, until and unless the Servicer has
been removed as provided in clause (b), the Servicer covenants and agrees to
act as the Servicer for a term from the occurrence of the Servicing
Termination Event to the end of the calendar quarter in which such Servicing
Termination Event occurs, which term may at the Credit Enhancer's discretion
be extended by written notice to the Indenture Trustee and the Servicer for
successive terms of three (3) calendar months each, until the termination of
the Trust Estate. The Servicer will, upon the receipt of each such notice of
extension (a "Servicer Extension Notice") become bound for the duration of the
term covered by such Servicer Extension Notice to continue as Servicer subject
to and in accordance with this Servicing Agreement. If, as of the fifteenth
(15th) day prior to the last day of any term as the Servicer, the Indenture
Trustee shall not have received any Servicer Extension Notice from the Credit
Enhancer, the Indenture Trustee shall, within five (5) days thereafter, give
written notice of such nonreceipt to the Credit Enhancer and the Servicer. If
any such term expires without a Servicer Extension Notice then a successor
Servicer shall be appointed as provided in Section 7.02.
(e) No provision of this Section 7.04 shall have the effect of limiting the rights of the
Depositor, the Indenture Trustee, the Noteholders or the Credit Enhancer under
Section 7.01.
ARTICLE VIII
Miscellaneous Provisions
Section 8.01 Amendment. This Agreement may be amended from time to time by the parties
hereto; provided, that any such amendment shall be accompanied by a letter from each Rating
Agency to the effect that such amendment will not result in a Rating Event, if determined
without regard to the Policy; and provided further, that the Enhancer and the Indenture
Trustee shall consent thereto.
Section 8.02 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.03 Notices. Where this Servicing Agreement provides for a notice, certificate,
opinions, report or similar delivery to be given to any transaction party or to a Rating
Agency, a copy of such document shall be contemporaneously sent to the Enhancer. 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, 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxxxx Xxxxx, (b) in the case of the Enhancer, Financial Guaranty Insurance
Company, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000: Attention: Structured Finance
Surveillance-GMACM 2006-HE2 (c) in the case of Moody's, Home Mortgage Loan Monitoring Group,
4th Floor, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (d) in the case of Standard & Poor's,
00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Residential Mortgage Surveillance
Group, (e) in the case of the Owner Trustee, Wilmington Trust Company, Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000 and (f) in the case of the Issuer,
GMACM Home Equity Loan Trust 2006-HE2, c/o the Owner Trustee at the address set forth in
clause (e) above, and (g) in the case of the Indenture Trustee, at the Corporate Trust
Office of the Indenture Trustee; or, with respect to each of the foregoing Persons, at such
other address as shall be designated by such Person in a written notice to the other
foregoing Persons. 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 Note Register or Certificate Register, as the case may be. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively presumed to have
been duly given, whether or not the related 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 deliver any
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 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 Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or the Securities or
the rights of the Securityholders.
Section 8.05 Third-Party Beneficiaries. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, the Securityholders, the Enhancer, the Owner Trustee and
their respective successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person shall 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 Mortgage
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 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 the Trust Agreement is terminated, or
(ii) the purchase by the Servicer from the Issuer of all Mortgage Loans and REO Property
in accordance with Section 8.08(b).
(b) The Servicer shall have the right to purchase from the Issuer all of the Mortgage
Loans and related REO Property if the aggregate Note Balance of the Notes as
of any Payment Date, prior to giving effect to any payments on such Payment
Date, is less than 10% of the aggregate Note Balance of the Notes as of the
Closing Date (provided that a draw on the Policy would not occur as a result
of such purchase and provided further that the purchase price will provide
sufficient funds to pay the outstanding Note Balance and accrued and unpaid
interest on the Notes to the Payment Date on which such amounts are to be
distributed to the Securityholders), at a price equal to 100% of the aggregate
unpaid Principal Balance of all such remaining Mortgage Loans, plus accrued
and unpaid interest thereon at the weighted average of the Loan Rates thereon
up to the date preceding the Payment Date on which such amounts are to be
distributed to the Securityholders (and in the case of REO Property, the fair
market value of the REO Property), plus any amounts due and owing to the
Enhancer under the Insurance Agreement related to the Mortgage Loans or the
Notes (and any unpaid Servicing Fee relating to the Mortgage Loans shall be
deemed to have been paid at such time),
The Servicer shall send written notice to the Enhancer of its intent to
exercise its right to purchase any of the Mortgage Loans pursuant to this Section 8.08(b).
In the event that the Servicer fails to exercise its right set forth in this
Section 8.08(b) on or prior to the third Payment Date that it can exercise such right and if
there is an unreimbursed draw on the Policy, or the Enhancer, in its reasonable judgment
factoring in among other things the Overcollateralization Amount, reasonably believes that
there will be a draw on the Policy, the Enhancer may exercise such right of the Servicer
upon notice to the Servicer of its intent.
If such right is exercised by the Servicer or the Enhancer, as applicable, the
Servicer or Enhancer, as applicable, shall deposit the amount calculated pursuant to this
Section 8.08(b) 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 or Enhancer, as applicable, the files pertaining to the Mortgage Loans being
purchased. The Servicer or Enhancer, as applicable, at its expense, shall prepare and
deliver to the Indenture Trustee for execution, at the time the related Mortgage Loans are
to be released to the Servicer or Enhancer, as applicable, appropriate documents assigning
each such Mortgage Loans from the Indenture Trustee or the Issuer to the Servicer, Enhancer
or the appropriate party.
Section 8.09 Certain Matters Affecting the Indenture Trustee. For all purposes of this
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 Servicer, and the Owner Trustee and the Indenture
Trustee assume no responsibility for the correctness thereof. The Owner Trustee and the
Indenture Trustee make no representations as to the validity or sufficiency of this
Agreement, of any Basic Document or Related Document, or of the Certificates (other than the
signatures of the Owner Trustee and the Indenture Trustee on the Certificates) or the
Notes. The Owner Trustee and the Indenture Trustee shall at no time have any responsibility
or liability with respect to the sufficiency of the Trust Estate or its ability to generate
the payments to be distributed to Certificateholders under the Trust Agreement or the
Noteholders under the Indenture, including the compliance by the Depositor, the Sellers or
the Servicer with any warranty or representation made under any Basic Document or the
accuracy of any such warranty or representation, or any action of any person taken in the
name of the Owner Trustee or the Indenture Trustee.
ARTICLE IX
Compliance With Regulation AB
Section 9.01 Intent of the Parties; Reasonableness.
The Depositor, the Indenture Trustee and the Servicer acknowledge and agree
that the purpose of this Article IX is to facilitate compliance by the Depositor with the
provisions of Regulation AB and related rules and regulations of the Commission. The
Depositor shall not exercise its right to request delivery of information or other
performance under these provisions other than in good faith, or for purposes other than
compliance with the Securities Act, the Exchange Act and the rules and regulations of the
Commission under the Securities Act and the Exchange Act. Each of the Servicer and the
Indenture Trustee acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the Commission or its
staff, consensus among participants in the mortgage-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with reasonable requests made by the Depositor
in good faith for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. Each of the Servicer and the Indenture Trustee shall
cooperate reasonably with the Depositor to deliver to the Depositor (including any of its
assignees or designees), any and all disclosure, statements, reports, certifications,
records and any other information necessary in the reasonable, good faith determination of
the Depositor to permit the Depositor to comply with the provisions of Regulation AB.
Section 9.02 Additional Representations and Warranties of the Indenture Trustee.
(a) The Indenture Trustee shall be deemed to represent and warrant to the Depositor as of
the date hereof and on each date on which information is provided to the Depositor under
Sections 9.01, 9.02(b) or 9.03 that, except as disclosed in writing to the Depositor prior
to such date: (i) there are no material legal or governmental proceedings pending (or known
to be contemplated) against it that would be material to Noteholders; (ii) there are no
relationships or transactions (as described in Item 1119(b) of Regulation AB) relating to
the Indenture Trustee with respect to the Depositor or any sponsor, issuing entity,
servicer, trustee, originator, significant obligor, enhancement or support provider or other
material transaction party (as each of such terms are used in Regulation AB) relating to the
Securitization Transaction contemplated by the Servicing Agreement, as identified by the
Depositor to the Indenture Trustee in writing as of the Closing Date (each, a "Transaction
Party") that are outside the ordinary course of business or on terms other than would be
obtained in an arm's length transaction with an unrelated third party, apart from the
Securitization Transaction, and that are material to the investors' understanding of the
Notes; and (iii) the Indenture Trustee is not an affiliate (as contemplated by Item 1119(a)
of Regulation AB) of any Transaction Party. The Depositor shall notify the Indenture
Trustee of any change in the identity of a Transaction Party after the Closing Date.
(b) If so requested by the Depositor on any date following the Closing Date, the
Indenture Trustee shall, within five Business Days following such request, confirm in
writing the accuracy of the representations and warranties set forth in paragraph (a) of
this Section or, if any such representation and warranty is not accurate as of the date of
such confirmation, provide the pertinent facts, in writing, to the Depositor. Any such
request from the Depositor shall not be given more than once each calendar quarter, unless
the Depositor shall have a reasonable basis for questioning the accuracy of any of the
representations and warranties.
Section 9.03 Information to Be Provided by the Indenture Trustee.
For so long as the Company is subject to Exchange Act reporting requirements with
respect to the Trust Fund, for the purpose of satisfying the Depositor's reporting
obligation under the Exchange Act with respect to any class of Notes, the Indenture Trustee
shall provide to the Depositor a written description of (a) any litigation or governmental
proceedings pending against the Indenture Trustee as of the last day of each calendar month
that would be material to Noteholders, and (b) any affiliations or relationships (as
described in Item 1119 of Regulation AB) that develop following the Closing Date between the
Indenture Trustee and any Transaction Party of the type described in Section 9.02(a)(ii) or
9.02(a)(iii) as of the last day of each calendar year. Any descriptions required with
respect to legal proceedings, as well as updates to previously provided descriptions, under
this Section 9.03 shall be given no later than five Business Days prior to the Determination
Date following the month in which the relevant event occurs, and any notices and
descriptions required with respect to affiliations, as well as updates to previously
provided descriptions, under this Section 9.03 shall be given no later than January 31 of
the calendar year following the year in which the relevant event occurs. As of the related
Payment Date with respect to each Report on Form 10-D with respect to the Notes filed by or
on behalf of the Depositor, and as of March 15 preceding the date each Report on Form 10-K
with respect to the Notes is filed, the Indenture Trustee shall be deemed to represent and
warrant that any information previously provided by the Indenture Trustee under this
Article IX is materially correct and does not have any material omissions unless the
Indenture Trustee has provided an update to such information. The Depositor will allow the
Indenture Trustee to review any disclosure relating to material litigation against the
Indenture Trustee prior to filing such disclosure with the Commission to the extent the
Depositor changes the information provided by the Indenture Trustee.
Section 9.04 Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Indenture Trustee shall:
(a) deliver to the Depositor a report (in form and substance reasonably satisfactory to
the Depositor) regarding the Indenture Trustee's assessment of compliance with the
applicable Servicing Criteria during the immediately preceding calendar year, as required
under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such
report shall be signed by an authorized officer of the Indenture Trustee, and shall address
each of the Servicing Criteria specified on Exhibit G hereto; and
(b) deliver to the Depositor a report of a registered public accounting firm satisfying
the requirements of Rule 2-01 of Regulation S-X under the Securities Act and the Exchange
Act that attests to, and reports on, the assessment of compliance made by the Indenture
Trustee and delivered pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and
the Exchange Act.
Section 9.05 Indemnification; Remedies.
(a) The Indenture Trustee shall indemnify the Depositor, each affiliate of the Depositor,
the Servicer and each affiliate of the Servicer, and the respective present and former
directors, officers, employees and agents of each of the foregoing, and shall hold each of
them harmless from and against any losses, damages, penalties, fines, forfeitures, legal
fees and expenses and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification, accountants' attestation
or other material provided under this Article IX by or on behalf of the Indenture Trustee
(collectively, the "Indenture Trustee Information"), or (B) the omission or alleged omission
to state in the Indenture Trustee Information a material fact required to be stated in the
Indenture Trustee Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or
(ii) any failure by the Indenture Trustee to deliver any
information, report, certification, or other material when and as required under this
Article IX, other than a failure by the Indenture Trustee to deliver an accountants'
attestation.
(b) In the case of any failure of performance described in clause (ii) of Section
9.05(a), as well as a failure to deliver an accountants' attestation, the Indenture Trustee
shall (i) promptly reimburse the Depositor for all costs reasonably incurred by the
Depositor in order to obtain the information, report, certification, accountants'
attestation or other material not delivered by the Indenture Trustee as required and
(ii) cooperate with the Depositor to mitigate any damages that may result from such failure.
(c) The Depositor and the Servicer shall indemnify the Indenture Trustee, each affiliate
of the Indenture Trustee and the respective present and former directors, officers,
employees and agents of the Indenture Trustee, and shall hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of them may
sustain arising out of or based upon (i) any untrue statement of a material fact contained
or alleged to be contained in any information provided under this Servicing Agreement by or
on behalf of the Depositor or Servicer for inclusion in any report filed with Commission
under the Exchange Act (collectively, the "RFC Information"), or (ii) the omission or
alleged omission to state in the RFC Information a material fact required to be stated in
the RFC Information or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) Notwithstanding any provision in this Section 9.05 to the contrary, the parties agree
that none of the Indenture Trustee, the Depositor or the Servicer shall be liable to the
other for any consequential or punitive damages whatsoever, whether in contract, tort
(including negligence and strict liability), or any other legal or equitable principle;
provided, however, that such limitation shall not be applicable with respect to third party
claims made against a party.
IN WITNESS WHEREOF, the Servicer, the Issuer and the Indenture Trustee have caused
this Agreement to be duly executed by their respective officers or representatives all as of
the day and year first above written.
GMAC MORTGAGE CORPORATION,
as Servicer
By: _______________________________________
Name:
Title:
GMACM HOME EQUITY LOAN TRUST 2006-HE2, as
Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee
By: ________________________________________
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as
Indenture Trustee
By: _________________________________________
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[ON FILE WITH THE INDENTURE TRUSTEE]
EXHIBIT B
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That JPMorgan Chase Bank, National Association, as indenture trustee (the "Indenture
Trustee"), under the indenture dated as of June 29, 2006 (the "Indenture"), between GMACM
Home Equity Loan Trust 2006-HE2, as issuer and the Indenture Trustee, a national banking
association organized and existing under the laws of the United States of America, and
having its principal office located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, hath made, constituted and appointed, and does by these presents make, constitute and
appoint GMAC Mortgage Corporation, a corporation organized and existing under the laws of
the Commonwealth of Pennsylvania, 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 securing a Mortgage Loan and the related 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 such Mortgage Note secured by any such Mortgage) and for which GMAC
Mortgage Corporation is acting as Servicer pursuant to a Servicing Agreement dated as of
June 29, 2006 (the "Servicing Agreement").
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage, where said modification or
re-recording is for the purpose of correcting the Mortgage 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 as insured.
2. The subordination of the Lien of a Mortgage 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
trustees to accomplish same.
3. With respect to a Mortgage, 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 trustee(s) serving under a Mortgage, in accordance with
state law and the Mortgage;
b. the preparation and issuance of statements of breach or non-performance;
c. the preparation and filing of notices of default and/or notices of sale;
d. Cancellations/rescissions of notices of default or notices of sale;
e. The taking of a deed in lieu of foreclosure; and
f. The preparation and execution of such other documents and the performance of
such other actions as may be necessary under the terms of the Mortgage or
state law to expeditiously complete said transactions in this paragraph 3.
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 and modification agreements.
6. The full satisfaction/release of a Mortgage 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 and the related Mortgage Note, in connection with the
repurchase of the Mortgage Loan secured and evidenced thereby.
8. The full assignment of a Mortgage upon payment and discharge of all sums secured
thereby in conjunction with the refinancing thereof, including, without limitation,
the assignment of the related Mortgage Note.
9. The modification or re-recording of a Mortgage, where said modification or
re-recording is for the purpose of any modification pursuant to Section 3.01 of the
Servicing Agreement.
10. The execution of partial satisfactions/releases pursuant to Section 3.01 of the
Servicing Agreement.
Capitalized terms used herein that are not otherwise defined shall have the meanings
ascribed thereto in Appendix A to the Indenture.
This Power of Attorney is effective for one (1) year from the date hereof or the
earlier of (i) revocation by the Indenture Trustee, (ii) the Attorney shall no longer be
retained on behalf of the Indenture Trustee or an affiliate of the Indenture Trustee; or
(iii) the expiration of one year from the date of execution.
The authority granted to the attorney-in-fact by the Power of Attorney is not
transferable to any other party or entity.
This Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York without regard to its conflicts of law principles.
All actions heretofore taken by said Attorney, which the Attorney could properly have
taken pursuant to this Power of Attorney, be, and hereby are, ratified and affirmed.
IN WITNESS WHEREOF, JPMorgan Chase Bank, National Association, as Indenture Trustee,
and these present to be signed and acknowledged in its name and behalf by
___________________ its duly elected and authorized Senior Vice President this _______ day
of ___________________, 200_.
XX Xxxxxx Xxxxx Bank, National Association
By: ______________________________________
Name:
Title:
__________________________________________
Witness
Printed Name:
__________________________________________
Witness
Printed Name:
ACKNOWLEDGEMENT
STATE OF ______________________
COUNTY OF _____________________
Personally appeared before me the above-named _________________________, known or
proved to me to be the same person who executed the foregoing instrument and to be the
[Title] JPMorgan Chase Bank, National Association, as Trustee
for __________ _______, and acknowledged that s/he executed the same as her/his free act and
deed and the free act and deed of the Trustee.
Subscribed and sworn before me this _______ day of _______________, 200__.
_______________________________
NOTARY PUBLIC
My Commission expires:
EXHIBIT C
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Loans, we request the release of the
Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan
Prepaid in Full Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection with such
payments which are required to be deposited have been or will be so deposited as provided in
the Servicing Agreement."
GMAC Mortgage Corporation
Authorized Signature
******************************************************************************
TO CUSTODIAN: Please acknowledge this request, and check off documents being enclosed with
a copy of this form. You should retain this form for your files in accordance with the
terms of the Servicing Agreement.
Enclosed Documents: [__] Mortgage Note
Name ________________________________________
Title
Date
EXHIBIT D-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D required
to be filed in respect of the period covered by this report on Form 10-K of the trust (the
Exchange Act periodic reports) pursuant to the Servicing Agreement dated June 29, 2006 (the
"Agreement") among GMAC Mortgage Corporation (the "Servicer"), Home Loan Trust 2006-HE2 (the
"Issuer") and JPMorgan Chase Bank, National Association (the "Indenture Trustee") and
acknowledged and agreed to by Residential Asset Mortgage Products, Inc;
2. Based on my knowledge, Exchange Act periodic reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the servicing information required to be provided to
the Indenture Trustee by the Servicer under the Servicing Agreement is included in these
reports;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by this report is
included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the Servicer and
based on my knowledge and the compliance review conducted in preparing the servicer
compliance statement required in this report under Item 1123 of Regulation AB and except as
disclosed in the Exchange Act periodic reports, the Servicer has fulfilled its obligations
under the Agreement; and
5. All of the reports on assessment of compliance with servicing criteria for
asset-backed securities and their related attestation reports on assessment of compliance
with servicing criteria for asset-backed securities required to be included in this report
in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have
been included as an exhibit to this report, except as otherwise disclosed in this report.
Any material instances of noncompliance described in such reports have been disclosed in
this report on Form 10-K.
In giving the certifications above, I have reasonably relied on the information
provided to me by the following unaffiliated parties: [the Indenture Trustee]
IN WITNESS WHEREOF, I have duly executed this certificate as of _________, 20__.
____________________________*
Name:
Title:
* to be signed by the senior officer in charge of the servicing functions of the
Servicer
EXHIBIT D-2
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of JPMorgan Chase Bank, National Association,
(the "Indenture Trustee") certifies that:
(a) The Indenture Trustee has performed all of the duties specifically required to
be performed by it pursuant to the provisions of the Servicing Agreement dated as of June
29, 2006 (the "Agreement") by and among GMACM Home Equity Loan Trust 2006-HE2, as depositor,
GMAC Mortgage Corporation, as Servicer, and the Indenture Trustee in accordance with the
standards set forth therein.
(b) Based on my knowledge, the information that is provided by the Indenture
Trustee pursuant to Section 4.02(b) of the Agreement is accurate as of the last day of the
20[__] calendar year.
Capitalized terms used and not defined herein shall have the meanings given such
terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of _________, 20[__].
____________________________*
Name:
Title:
EXHIBIT E
SERVICING CRITERIA
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Indenture Trustee shall address,
at a minimum, the criteria identified as below as "Applicable Servicing Criteria":
-------------------------------------------------------------------------- ------------------
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
----------------- -------------------------------------------------------- ------------------
REFERENCE CRITERIA
----------------- -------------------------------------------------------- ------------------
GENERAL SERVICING CONSIDERATIONS
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted
to monitor the third party's performance and
compliance with such servicing activities.
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the pool assets are
maintained.
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount
of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
----------------- -------------------------------------------------------- ------------------
CASH COLLECTION AND ADMINISTRATION
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(i) Payments on pool assets are deposited into the |X| (as to
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days accounts held by
following receipt, or such other number of days Indenture
specified in the transaction agreements. Trustee)
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an |X| (as to
obligor or to an investor are made only by authorized investors only)
personnel.
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of |X| (as to
overcollateralization, are separately maintained accounts held by
(e.g., with respect to commingling of cash) as set Indenture
1122(d)(2)(iv) forth in the transaction agreements. Trustee)
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(v) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this
criterion, "federally insured depository institution"
with respect to a foreign financial institution means
a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.*
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for
all asset-backed securities related bank accounts,
including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number
of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person
who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their
original identification, or such other number of days
specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
INVESTOR REMITTANCES AND REPORTING
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(i) Reports to investors, including those to be filed with
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of pool assets serviced by the
servicer.
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in |X|
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
Disbursements made to an investor are posted within
two business days to the servicer's investor records,
or such other number of days specified in the |X|
1122(d)(3)(iii) transaction agreements.
----------------- -------------------------------------------------------- ------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, |X|
1122(d)(3)(iv) or custodial bank statements.
----------------- -------------------------------------------------------- ------------------
POOL ASSET ADMINISTRATION
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as
required by the transaction agreements or related
asset pool documents.
----------------- -------------------------------------------------------- ------------------
Pool assets and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance
with any conditions or requirements in the transaction
agreements.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made
in accordance with the related pool asset documents
are posted to the servicer's obligor records
maintained no more than two business days after
receipt, or such other number of days specified in the
transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance
with the related pool asset documents.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(v) The servicer's records regarding the pool assets agree
with the servicer's records with respect to an
obligor's unpaid principal balance.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an
obligor's pool asset (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
documents.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with
the timeframes or other requirements established by
the transaction agreements.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a pool asset is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or
such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent pool assets including, for
example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
pool assets with variable rates are computed based on
the related pool asset documents.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's pool asset documents, on
at least an annual basis, or such other period
specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in
accordance with applicable pool asset documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of
the related pool asset, or such other number of days
specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
transaction agreements.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(xii) Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
obligor's error or omission.
----------------- -------------------------------------------------------- ------------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of
1122(d)(4)(xiii) days specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts
are recognized and recorded in accordance with the
transaction agreements.
----------------- -------------------------------------------------------- ------------------
Any external enhancement or other support, identified
in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the |X|
1122(d)(4)(xv) transaction agreements.
----------------------------------------------------------------------------------------------
* Subject to clarification by the Commission.
