SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of June, 1998, by and between XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS
HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and OPTION ONE
MORTGAGE CORPORATION, a California corporation ("the Servicer"), recites and
provides as follows:
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans identified
on Schedule I hereto (the "Serviced Mortgage Loans") to Structured Asset
Securities Corporation ("SASCO"), which in turn has conveyed the Serviced
Mortgage Loans to First Union National Bank, as trustee (the "Trustee") under a
trust agreement dated as of June 1, 1998 (the "Trust Agreement"), among the
Trustee, Norwest Bank Minnesota, National Association, as master servicer
("Norwest," and, together with any successor Master Servicer appointed pursuant
to the provisions of the Trust Agreement, the "Master Servicer") and SASCO.
WHEREAS, Xxxxxx Capital desires that the Servicer service the Serviced
Mortgage Loans, and the Servicer has agreed to do so, subject to the conditions
set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be obligated,
among other things, to supervise the servicing of the Serviced Mortgage Loans on
behalf of the Trustee, and shall have the right, under certain circumstances, to
terminate the rights and obligations of the Servicer under this Servicing
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxx Capital and the Servicer
hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Seller's
Warranties and Servicing Agreement dated as of September 30, 1997, between
Xxxxxx Capital and the Servicer (the "Warranties and Servicing Agreement")
incorporated by reference herein, shall have the meanings ascribed to such terms
in the Trust Agreement.
2. Servicing. The Servicer agrees, with respect to the Serviced
Mortgage Loans, to perform and observe the duties, responsibilities and
obligations that are to be performed and observed under the provisions of the
Warranties and Servicing Agreement, except as otherwise provided herein and on
Exhibit A hereto, and that the provisions of the Warranties and Servicing
Agreement, as so modified, are and shall be a part of this Agreement to the same
extent as if set forth herein in full.
3. Master Servicing; Termination of Servicer. The Servicer, including
any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the provisions
of this Agreement. The Master Servicer, acting on behalf of the Trustee pursuant
to the Trust Agreement, shall have the same rights as the "Purchaser" (as
defined in the Warranties and Servicing Agreement) to enforce the obligations of
the Servicer under the Warranties and Servicing Agreement. The Master Servicer
shall be entitled to terminate the rights and obligations of the Servicer under
this Agreement upon the failure of the Servicer to perform any of its
obligations under this Agreement, as provided in Article X of the Warranties and
Servicing Agreement.
4. No Representations. Neither the Servicer nor the Master Servicer
shall be obligated or required to make any representations and warranties
regarding the Serviced Mortgage Loans in connection with the transactions
contemplated by the Trust Agreement and issuance of the certificates issued
pursuant thereto.
5. Notices. All notices and communications between or among the parties
hereto shall be in writing and shall be deemed received or given when mailed
first-class mail, postage prepaid, addressed to each other party at its address
specified below. Each party may designate to the other parties in writing, from
time to time, other addresses to which notices and communications hereunder
shall be sent.
6. Governing Law. THIS SERVICING AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING
NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all of which counterparts shall together constitute but one and the same
instrument.
8. Reconstitution. Xxxxxx Capital and the Servicer agree that this
Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Warranties and Servicing Agreement.
9. Notices and Remittances to the Master Servicer. All notices required
to be delivered to the Purchaser or the Master Servicer under this Agreement
shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1998-6
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: #13445400, SASCO 1998-6
10. Errors and Omissions Insurance. The Servicer shall keep in force
during the term of this Agreement a fidelity bond and a policy or policies of
insurance covering errors and omissions in the performance of the Servicer's
obligations under this Agreement. Such fidelity bond and policy or policies
shall be maintained with recognized insurers and shall be in such form and
amount as would permit the Servicer to be qualified as a FNMA or FHLMC
seller-servicer. The Servicer shall be deemed to have complied with this
provision if an affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. The Servicer
shall furnish to the Master Servicer a copy of each such bond and insurance
policy upon receipt thereof by the Servicer.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
OPTION ONE MORTGAGE CORPORATION
By:
Name:
Title:
X- 0
EXHIBIT A
Modifications to the Warranties and Servicing Agreement
1. All references to "Pool I," "Pool 1," "Pool 2" and "Pool II" in the
Warranties and Servicing Agreement are hereby deleted.
2. The definition of "Custodial Agreement" in Article I is hereby
deleted and replaced with the following:
"The custodial agreement relating to custody of the Serviced
Mortgage Loans among: U.S. Bank Trust National Association, as
Custodian, First Union National Bank, as Trustee, and Structured Asset
Securities Corporation, dated as of June 1, 1998."
3. The definition of "Monthly Advance" in Article I is hereby amended by
adding at the end of such definition the following: ", but only to the
extent that such amount is expected, in the reasonable judgment of the
Company, to be recoverable from collections or other recoveries in
respect of such Mortgage Loan."
4. The definition of "Servicing Advance" in Article I is hereby amended by
adding, immediately after the phrase "but not limited to, the cost of",
the following: "transfer of servicing of Delinquent Mortgage Loans to
the Special Servicer pursuant to Section 11.02, and".
5. The word "or" at the beginning of line twelve of the second paragraph
in Section 4.01 is hereby deleted and replaced with a comma, and the
following is hereby added immediately following the words "change the
final maturity date on such Mortgage Loan" in such line twelve: "or
permit any alteration, substitution or release of any collateral for
such Mortgage Loan."
6. The fourth and fifth paragraphs of Section 4.01 are hereby deleted
in their entirety and replaced with the following:
"Notwithstanding anything to the contrary in this Agreement,
the Company shall not waive any premium or penalty in connection with a
prepayment of principal of any Mortgage Loan, and shall not consent to
the modification of any Mortgage Note to the extent that such
modification relates to payment of a prepayment premium or penalty."
7. The following paragraph is hereby added at the end of Section 4.02:
"Notwithstanding the foregoing, in the event of any conflict
between the provisions of this Section 4.02 and the provisions of
Section 11.02, the provisions of Section 11.02 shall control."
8. The words "the Purchaser of Conventional Residential Adjustable and
Fixed Rate Mortgage Loans, Group No. 1997-LB/00" in the first paragraph
of Section 4.04 are hereby deleted and replaced with the following:
"Norwest Bank Minnesota, National Association, as master servicer for
SASCO 1998-6."
9. Section 4.05 is amended by deleting the word "and" at the end of clause
(vi), replacing the period at the end of clause (vii) with "; and", and
adding the following immediately following clause (viii):
"(viii) to reimburse itself for Monthly Advances of the
Company's funds made pursuant to Section 7.03, the Company's right to
reimburse itself pursuant to this subclause (viii) (x) being limited to
amounts received on the related Mortgage Loan which represent late
payments of principal and/or interest respecting which any such advance
was made, related Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, REO Property, and such other amounts as may be
collected by the Company from the Mortgagor or otherwise relating to
such Mortgage Loan, and (y) if, after the liquidation of such Mortgage
Loan, such amounts are insufficient to reimburse the Company for such
unreimbursed Monthly Advances, the Company may seek reimbursement from
other amounts in the Custodial Account, it being understood that, in
the case of any such reimbursement, the Company's right thereto shall
be prior to the rights of the Purchaser;
10. Section 4.05 is further amended by adding, immediately after the words
"unreimbursed Servicing Advances" in the first line of clause (ii), the
following: ", and for any unpaid Servicing Fees,".
11. The words "the Purchaser of Conventional Residential Adjustable and
Fixed Rate Mortgage Loans, Group No. 1997-LB/00" in the first paragraph
of Section 4.06 are hereby deleted and replaced with the following:
"Norwest Bank Minnesota, National Association, as master servicer for
SASCO 1998-6."
12. All references in Section 4.15 to the disposition of REO Properties
within a two year period are hereby deleted and replaced with a three
year period.
13. The first paragraph of Section 5.01 is hereby deleted and replaced
with the following:
"On each Remittance Date the Company shall remit by wire
transfer of immediately available funds to the Master Servicer (a) all
amounts deposited in the Custodial Account as of the close of business
on the last day of the related Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 4.05), plus
(b) all advances, if any, which the Company is obligated to make
pursuant to Section 7.03, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds or REO Disposition Proceeds received after the
applicable Prepayment Period, which amounts shall be remitted on the
following Remittance Date, together with any additional interest
required to be deposited in the Custodial Account in connection with
such Principal Prepayment in accordance with Section 7.04, and minus
(d) any amounts attributable to Monthly Payments collected but due
(giving effect to Section 5.03) on a due date or dates subsequent to
the first day of the month in which such Remittance Date occurs, which
amounts shall be remitted on the Remittance Date next succeeding the
Due Period for such amounts."
14. Section 5.02 is hereby amended by deleting the words "Remittance Date"
in the first line of such Section, and substituting the following:
"tenth day of each month, or if such tenth day is not a Business Day,
the immediately preceding Business Day,"
15. Section 5.03 is hereby deleted in its entirety.
16. Section 6.03 is hereby amended by adding the following immediately
after the words "other ancillary fees" in the second paragraph of such
Section: ", but not including any premium or penalty associated with a
prepayment of principal of a Mortgage Loan."
17. The second paragraph of Section 11.02 is hereby deleted in its
entirely and replaced with the following:
"On the second Business Day of each month, the Company shall
orally inform the Master Servicer and the Special Servicer as to which
Mortgage Loans have become delinquent for a period of 61 days or more,
without giving effect to any grace period permitted by the related
Mortgage Note (each, a "Distressed Mortgage Loan"). Any such Mortgage
Loan as to which all past due payments are made prior to the Notice
Date shall not be considered to be a Distressed Mortgage Loan, and the
servicing thereof shall not be transferred as provided below. On the
fourth Business Day of each month (the "Notice Date"), the Company
shall send by facsimile a written listing of the Distressed Mortgage
Loans to the Master Servicer, the Trustee and the Custodian, and shall
mail to the Mortgagor of each Mortgage Loan listed in a Transfer Notice
a letter advising each such Mortgagor of the transfer of the servicing
of the related Mortgage Loan to the Special Servicer, in accordance
with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of such letter shall have the
prior approval of the Special Servicer. The Company shall promptly
provide the Special Servicer with copies of all such notices. The
transfer of servicing with respect to each such Mortgage Loan to the
Special Servicer shall be effected by the Company not later than the
fifteenth day following the applicable Notice Date (the "Transfer
Date"). By the Business Day immediately following each Notice Date, the
Company shall provide the Master Servicer, the Special Servicer, the
Trustee and the Custodian with a certification (the "Transfer Notice")
listing the Distressed Mortgage Loans.
At least five Business Days prior to each Transfer Date, the
Company shall deliver, with respect to the Distressed Mortgage Loans
listed on the related Transfer Notice, to the Special Servicer all
Servicing Files, and to the Special Servicer and the Master Servicer a
loan level tape or other electronic media containing loan set-up
information in form reasonably acceptable to the Master Servicer and
the Special Servicer. Within two Business Days following such Transfer
Date, the Servicer shall deliver a final trial balance (subject to
special claims), in form reasonably acceptable to the Master Servicer
and the Special Servicer, and commensurate with generally acceptable
industry standards, detailing the amount of any unreimbursed Monthly
Advances, Servicing Advances and accrued and unpaid Servicing Fees on a
loan level basis. Should the Master Servicer or the Special Servicer
desire a loan level tape or other electronic media containing
information which is not readily extractable from the Company's
servicing system, the Company shall reasonably cooperate to make such
loan level data available to the Master Servicer and Special Servicer.
In addition, no more than two Business Days after the Transfer Date,
the Company shall transfer to the Special Servicer any funds held in an
Escrow Account or Custodial Account relating to the Distressed Mortgage
Loans listed in the related Transfer Notice. Upon reasonable compliance
by the Company with the provisions of this Section regarding the
transfer of servicing for Distressed Mortgage Loans, the Special
Servicer will reimburse the Company within five Business Days for any
unreimbursed Monthly Advances, Servicing Advances and accrued and
unpaid Servicing Fees with respect to such Distressed Mortgage Loans
which have been properly documented. Notwithstanding anything herein to
the contrary, the transfer of servicing for Distressed Mortgage Loans
shall not require the payment of a termination fee therefor.
In connection with the transfer of any Distressed Mortgage
Loan, (i) the Company will be responsible for servicing the Distressed
Mortgage Loan until the effective date of transfer of servicing to the
Special Servicer, but shall have no right or obligation to service such
Distressed Mortgage Loan from and after the effective date of the
transfer of servicing to the Special Servicer, (ii) notwithstanding
clause (i) above, the Company shall include the Distressed Mortgage
Loan in its monthly remittance report pursuant to Section 5.02 for the
month in which such transfer is effected and shall be obligated,
subject to Section 7.03, to make the Monthly Advance with respect to
such Distressed Mortgage Loan on the Remittance Date in the month in
which such transfer is effected, in each case, regardless of whether
the Remittance Date occurs before or after the effective date of such
transfer, (iii) the amount of Monthly Advances to be reimbursed to the
Company by the Special Servicer hereunder shall include the Monthly
Advance described in clause (ii) above regardless of whether the
Company makes such Monthly Advance before or after the effective date
of such transfer, (iv) the Company shall, no later than the end of the
month in which such transfer is effected, provide to the Special
Servicer loan level information (in the loan level tape or other
electronic media or other agreed-upon form) regarding the Distressed
Mortgage Loan during the month of such transfer as may be necessary to
enable the Special Servicer to provide such information in its
remittance report for the next following month, and (v) the Company
shall be entitled to its pro rata portion of the Servicing Fee with
respect to any such Distressed Mortgage Loan for the month in which
such transfer occurs, based on the number of days in such month that
precede the Transfer Date."
18. The following paragraph is added at the end of Section 12.01:
"Neither the Master Servicer nor any successor servicer
(including the Purchaser and the Master Servicer) shall be liable for
any acts or omissions of the Company or any predecessor servicer. In
particular, neither the Master Servicer nor any successor servicer
(including the Purchaser and the Master Servicer) shall be liable for
any servicing errors or interruptions resulting from any failure of the
Company to maintain computer and other information systems that are
year-2000 compliant."
19. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date,
the period beginning on the Cut-off Date and ending on July 1. With
respect to each subsequent Remittance Date, the period commencing on
the second day of the month immediately preceding the month in which
such Remittance Date occurs and ending on the first day of the month in
which such Remittance Date occurs."
