Exhibit 99.2
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COUNTRYWIDE HOME LOANS, INC.
a Seller
PARK MONACO INC.
a Seller
CWHEQ, INC.
Purchaser
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PURCHASE AGREEMENT
Dated as of August 30, 2006
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REVOLVING HOME EQUITY LOAN ASSET BACKED NOTES,
Series 2006-G
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Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions......................................................1
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of the Mortgage Loans.......................................2
Section 2.02. Obligations of Sellers Upon Sale.................................3
Section 2.03. Payment of Purchase Price for the Mortgage Loans.................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Seller Representations and Warranties............................7
Section 3.02. Seller Representations and Warranties Relating to the Mortgage
Loans............................................................9
ARTICLE IV
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers........................................24
ARTICLE V
SERVICING
Section 5.01. Servicing.......................................................25
ARTICLE VI
TERMINATION
Section 6.01. Termination.....................................................25
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment.......................................................25
Section 7.02. Governing Law...................................................25
Section 7.03. Notices.........................................................25
Section 7.04. Severability of Provisions......................................26
Section 7.05. Counterparts; Electronic Delivery...............................26
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Section 7.06. Further Agreements..............................................27
Section 7.07. Successors and Assigns: Assignment of Purchase Agreement........27
Section 7.08. Survival........................................................27
SCHEDULES AND ANNEXES
Schedule I MORTGAGE LOAN SCHEDULE.....................................Sch-I-1
Schedule II STANDARD & POOR'S GLOSSARY................................Sch-II-1
Annex 1 ADOPTION ANNEX.............................................Xxx-1-1
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This PURCHASE AGREEMENT, dated as of August 30, 2006 (the "Agreement"),
between COUNTRYWIDE HOME LOANS, INC., a New York corporation, as a seller ("CHL"
or a "Seller"), PARK MONACO INC., a Delaware corporation, as a seller ("Park
Monaco" or a "Seller," and together with CHL, the "Sellers"), and CWHEQ, INC., a
Delaware corporation (the "Purchaser"),
WITNESSETH:
WHEREAS, each Seller is the owner of the applicable notes or other
evidence of indebtedness indicated on Schedule I as owned by that Seller, and
certain other notes or other evidence of indebtedness made or to be made in the
future, and Related Documentation; and
WHEREAS, by the date of their transfer, each Seller will own the mortgages
on the properties securing the Mortgage Loans indicated on Schedule I as owned
by that Seller, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any hazard
insurance policies on the Mortgaged Properties; and
WHEREAS, each Seller wants to sell its Mortgage Loans to the Purchaser
pursuant to this Agreement; and
WHEREAS, pursuant to the Sale and Servicing Agreement, of even date with
this Agreement (the "Sale and Servicing Agreement"), among the Purchaser, as
depositor, CHL, as sponsor and master servicer, the Trust, and the Indenture
Trustee, the Purchaser will transfer the Mortgage Loans to the Trust;
NOW, THEREFORE, the parties agree as follows.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Capitalized terms used in this Agreement that are not otherwise defined
have the meanings given to them in the Master Glossary of Defined Terms attached
as Annex 1 to the Indenture dated as of the date hereof between CWHEQ Revolving
Home Equity Loan Trust, Series 2006-G and JPMorgan Chase Bank, N.A., as
indenture trustee. In addition, Section 1.04 (Rules of Construction) of the
Indenture is incorporated by reference with appropriate substitution of this
Agreement for references in that Section to the Indenture so that the language
of that Section will read appropriately as applying to this Agreement.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of the Mortgage Loans.
(a) The Initial Mortgage Loans. Concurrently with the execution and
delivery of this Agreement, CHL, with respect to each Initial Mortgage Loan it
owns as indicated on Schedule I, hereby transfers to the Purchaser, without
recourse, all of its right, title, and interest existing now or in the future in
(1) that Mortgage Loan, including its Asset Balance (including all
Additional Balances), the related Mortgage File, all property that secures
that Mortgage Loan, and all collections received on it after the Cut-off
Date (excluding payments due by the Cut-off Date);
(2) property that secured that Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related to the
mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection with that
Mortgage Loan;
(5) all other assets included or to be included in the Trust for the
benefit of the Noteholders and the Credit Enhancer; and
(6) all proceeds of the foregoing.
Park Monaco, with respect to each Initial Mortgage Loan it owns as
indicated on Schedule I, hereby transfers to the Purchaser, without recourse,
all of its right, title, and interest existing now or in the future in
(1) that Mortgage Loan, including its Asset Balance (including all
Additional Balances), the related Mortgage File, all property that secures
that Mortgage Loan, and all collections received on it after the Cut-off
Date (excluding payments due by the Cut-off Date);
(2) property that secured that Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related to the
mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection with that
Mortgage Loan;
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(5) all other assets included or to be included in the Trust for the
benefit of the Noteholders and the Credit Enhancer; and
(6) all proceeds of the foregoing.
The Additional Home Equity Loans. The Purchaser may use the funds in each
Additional Loan Account to purchase Additional Home Equity Loans on any
Subsequent Closing Date designated by the Purchaser by the Latest Subsequent
Closing Date. On each Subsequent Closing Date, each Seller shall deliver a
Transfer Document (properly completed and executed by the Seller) to the
Purchaser. When each Seller delivers a Transfer Document, that Seller hereby
transfers to the Purchaser without recourse, and the Purchaser purchases and
shall effect payment for, all of its right, title, and interest in each
Additional Home Equity Loan identified in the Transfer Document, including its
Asset Balance (including all Additional Balances) and all collections received
on it after the relevant Subsequent Cut-off Date (excluding payments due by the
Subsequent Cut-off Date) and all proceeds of the foregoing.
(b) By the sale of a Mortgage Loan and its Additional Balances, each
Seller has sold to the Purchaser, and the Purchaser has purchased from each
Seller, each future draw of new borrowing under the related Credit Line
Agreement. The Purchaser shall pay the applicable Seller for each Additional
Balance in cash in an amount equal to the principal amount of the Additional
Balance as it arises. The Trust, the applicable Seller, and the Purchaser may
agree to a netting arrangement in connection with this transaction, when
appropriate, rather than actually moving cash.
Section 2.02. Obligations of Sellers Upon Sale.
In connection with the transfers pursuant to Section 2.01(a), each Seller
further agrees, at its own expense:
(a) to deliver to the Purchaser by the Closing Date a Mortgage Loan
Schedule containing an accurate list of all Initial Mortgage Loans sold by it,
specifying for each Initial Mortgage Loan, among other things, its account
number and its Cut-off Date Asset Balance;
(b) to indicate in its books and records that the applicable Mortgage
Loans have been sold to the Indenture Trustee, as assignee of the Purchaser,
pursuant to this Agreement by the Closing Date for the Initial Mortgage Loans,
and by each Subsequent Closing Date for the related Additional Home Equity
Loans;
(c) to deliver to the Purchaser, or at the Purchaser's direction to the
Indenture Trustee and the Owner Trustee, and the Credit Enhancer, an Officer's
Certificate confirming the satisfaction of each of the conditions precedent in
Section 2.01(b) of the Sale and Servicing Agreement by each Subsequent Closing
Date; and
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(d) to deliver to the Purchaser, or at the Purchaser's direction to the
Indenture Trustee, a revised Mortgage Loan Schedule reflecting the addition of
the Additional Home Equity Loans within 15 days following each Subsequent
Closing Date.
The Initial Mortgage Loan Schedule containing the Mortgage Loans sold by
both Sellers is Exhibit A to the Sale and Servicing Agreement and shall also be
attached as Schedule I to this Agreement and is hereby incorporated into this
Agreement.
Each Seller agrees to perfect and protect the Purchaser's interest in each
Mortgage Loan transferred by it pursuant to Section 2.01(a) and its proceeds by
preparing, executing, and filing a UCC1 Financing Statement with the Secretary
of State in the State of New York or the Secretary of State in the State of
Delaware, as applicable, describing the Mortgage Loans and naming the applicable
Seller as debtor and the Purchaser as secured party and indicating that the
Mortgage Loans have been assigned to the Trust and all necessary Continuation
Statements and any additional UCC1 Financing Statements due to a change in the
name or the state of incorporation of that Seller. The Financing Statement shall
be filed by the Closing Date. This Financing Statement will state in bold-faced
type that a purchase of the Mortgage Loans included in the collateral covered by
the Financing Statement from the debtor will violate the rights of the secured
party and its assignee.
The Purchaser agrees to perfect and protect the Trust's interest in each
Mortgage Loan and its proceeds by preparing, executing, and filing a UCC1
Financing Statement with the Secretary of State in the State of Delaware
describing the Mortgage Loans and naming the Purchaser as debtor and the Trust
as secured party (and indicating that the Mortgage Loans have been pledged to
the Indenture Trustee) and all necessary Continuation Statements and any
additional UCC1 Financing Statements due to a change in the name or the state of
incorporation of the Purchaser. The Financing Statement shall be filed by the
Closing Date. This Financing Statement will state in bold-faced type that a
purchase of the Mortgage Loans included in the collateral covered by the
Financing Statement from the debtor will violate the rights of the secured party
and its assignee.
In connection with any transfer by a Seller, it shall deliver to the order
of the Purchaser the following documents for each Mortgage Loan transferred by
that Seller (the "Related Documentation"):
(1) the original Mortgage Note endorsed in blank or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original
lost note affidavit from the Sponsor stating that the original Mortgage
Note was lost, misplaced, or destroyed, together with a copy of the
related Mortgage Note;
(2) unless the Mortgage Loan is registered on the MERS(R) System, an
original assignment of mortgage in blank in recordable form;
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(3) the original recorded mortgage with evidence of recording on it
(noting the presence of the MIN of the Mortgage Loan and language
indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
MOM Loan) or, if the original recorded mortgage with evidence of recording
on it cannot be delivered by the Closing Date because of a delay caused by
the public recording office where the original Mortgage has been delivered
for recordation or because the original Mortgage has been lost, the
Sponsor shall deliver to the Indenture Trustee an accurate copy of the
mortgage, together with (i) when the delay is caused by the public
recording office, an Officer's Certificate of the Sponsor or the Purchaser
stating that the original mortgage has been dispatched to the appropriate
public recording official or (ii) when the original mortgage has been
lost, a certificate by the appropriate county recording office where the
mortgage is recorded;
(4) any original intervening assignments needed for a complete chain
of title to the Trust with evidence of recording on them, or, if any
original intervening assignment has not been returned from the applicable
recording office or has been lost, an accurate copy of it, together with
(i) when the delay is caused by the public recording office, an Officer's
Certificate of the Sponsor or the Purchaser stating that the original
intervening assignment has been dispatched to the appropriate public
recording official for recordation or (ii) when the original intervening
assignment has been lost, a certificate by the appropriate county
recording office where the mortgage is recorded;
(5) a title policy for each Mortgage Loan with a Credit Limit in
excess of $100,000;
(6) the original of any guaranty executed in connection with the
Mortgage Note;
(7) the original of each assumption, modification, consolidation, or
substitution agreement relating to the Mortgage Loan; and
(8) any security agreement, chattel mortgage, or equivalent
instrument executed in connection with the Mortgage.
The Related Documentation for the Initial Mortgage Loans will be
delivered:
(1) no later than the Closing Date, with respect to no less than 50%
of the Initial Mortgage Loans in each Loan Group,
(2) no later than the twentieth day after the Closing Date, with
respect to no less than 40% of the Initial Mortgage Loans in each Loan
Group in addition to those delivered on the Closing Date, and
(3) within thirty days following the Closing Date, with respect to
the remaining Initial Mortgage Loans.
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The Related Documentation for the Additional Home Equity Loans will be
delivered:
(1) no later than relevant Subsequent Closing Date, with respect to no
less than 10% of the relevant Additional Home Equity Loans in each Loan Group;
and
(2) within twenty days following the relevant Subsequent Closing Date,
with respect to the remaining relevant Additional Home Equity Loans in each Loan
Group.
Each Seller confirms to the Purchaser that, as of the Closing Date, it has
caused the portions of the Electronic Ledger relating to the Initial Mortgage
Loans maintained by that Seller to be clearly and unambiguously marked to
indicate that the Initial Mortgage Loans have been sold to the Purchaser, and
sold by the Purchaser to the Trust, and Granted by the Trust to the Indenture
Trustee, and that a purchase of those Mortgage Loans from that Seller or the
Purchaser will violate the rights of the Trust, as secured party with respect to
those Mortgage Loans. By the relevant Subsequent Closing Date or the applicable
date of substitution, as applicable, CHL shall cause the portions of the
Electronic Ledgers relating to the relevant Additional Home Equity Loans or
Eligible Substitute Mortgage Loans, as the case may be, to be clearly and
unambiguously marked, and shall make appropriate entries in its general
accounting records, to indicate that those Mortgage Loans have been transferred
to the Trust at the direction of the Purchaser and that they have been Granted
by the Trust to the Indenture Trustee, and that a purchase of the Mortgage Loans
from CHL or the Purchaser will violate the rights of the Trust, as secured party
with respect to those Mortgage Loans.
The Purchaser accepts all right, title, and interest of each of the
Sellers existing now or in the future in the Mortgage Loans and other property
transferred to it pursuant to this Section.
The transfer of the Mortgage Loans is a sale by each Seller to the
Purchaser of all its interest in the applicable Mortgage Loans and other
property described above. However, to provide for the possibility that either
transfer might be characterized as a transfer for security and not as a sale,
each Seller hereby Grants to the Purchaser a Security Interest in all of its
right, title, and interest in the applicable Mortgage Loans and other property
described above, whether existing now or in the future, to secure all of that
its obligations under this Agreement; and this Agreement shall constitute a
Security Agreement under applicable law.
Section 2.03. Payment of Purchase Price for the Mortgage Loans.
(a) In consideration of the sale of the Initial Mortgage Loans from each
of the Sellers to the Purchaser on the Closing Date, the Purchaser agrees to
transfer to the applicable Seller on the Closing Date the purchase price for the
applicable Initial Mortgage Loans provided in the Adoption Annex attached as
Annex 1 to this Agreement (the "Adoption Annex").
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(b) In consideration of the sale of the Additional Home Equity Loans from
the Seller to the Purchaser on each Subsequent Closing Date, the Purchaser
agrees to cause the Trust to pay to the Seller, when the conditions to the
release of the purchase price for the Additional Home Equity Loans under the
Sale and Servicing Agreement have been met, an amount equal to their Cut-off
Date Asset Balance.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Sellers Representations and Warranties.
(a) CHL represents and warrants to the Purchaser as of the Closing Date:
(1) CHL is a New York corporation, validly existing and in good
standing under the laws of the State of New York, and has the corporate
power to own its assets and to transact the business in which it is
currently engaged. CHL 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 any properties owned or
leased by it requires such qualification and in which the failure so to
qualify would have a material adverse effect on the business, properties,
assets, or condition (financial or other) of CHL;
(2) CHL has the power and authority to make, execute, deliver, and
perform this Agreement and all of the transactions contemplated by this
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery, and performance of this Agreement. When executed and
delivered, this Agreement will constitute the valid and legally binding
obligation of CHL enforceable in accordance with its terms;
(3) CHL is not required to obtain the consent of any other party 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 any consents, licenses,
approvals or authorizations, or registrations or declarations, that have
been obtained or filed, as the case may be, before the Closing Date;
(4) The execution, delivery, and performance of this Agreement by
the Seller will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the Seller or
any provision of the certificate of incorporation or bylaws of CHL, or
constitute a material breach of any mortgage, indenture, contract, or
other agreement to which CHL is a party or by which CHL may be bound; and
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(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of CHL threatened, against CHL or any of its properties or with
respect to this Agreement or the Notes that in the opinion of CHL has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement.
(6) The representations in Section 3.01(b) are true.
(b) Park Monaco represents and warrants to the Purchaser as of the Closing
Date:
(1) Park Monaco is a Delaware corporation, validly existing and in
good standing under the laws of the State of Delaware, and has the
corporate power to own its assets and to transact the business in which it
is currently engaged. Park Monaco 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 any properties owned or
leased by it requires such qualification and in which the failure so to
qualify would have a material adverse effect on the business, properties,
assets, or condition (financial or other) of Park Monaco.
(2) Park Monaco has the power and authority to make, execute,
deliver, and perform this Agreement and all of the transactions
contemplated by this Agreement, and has taken all necessary corporate
action to authorize the execution, delivery, and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
valid and legally binding obligation of Park Monaco enforceable in
accordance with its terms;
(3) Park Monaco is not required to obtain the consent of any other
party 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 any consents, licenses,
approvals or authorizations, or registrations or declarations, that have
been obtained or filed, as the case may be, before the Closing Date;
(4) The execution, delivery, and performance of this Agreement by
Park Monaco will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to Park Monaco
or any provision of the certificate of incorporation or bylaws of Park
Monaco, or constitute a material breach of any mortgage, indenture,
contract, or other agreement to which Park Monaco is a party or by which
Park Monaco may be bound; and
(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of Park Monaco threatened, against Park Monaco or any of its
properties or with respect to this
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Agreement or the Notes that in the opinion of Park Monaco has a reasonable
likelihood of resulting in a material adverse effect on the transactions
contemplated by this Agreement.
(c) The representations and warranties in this Section 3.01 shall survive
the transfer of the Mortgage Loans to the Purchaser. CHL shall cure a breach of
any of the representations and warranties of CHL and Park Monaco in accordance
with the Sale and Servicing Agreement. The remedy specified in the Sale and
Servicing Agreement shall constitute the sole remedy against a Seller with
respect to any breach.
Section 3.02. Seller Representations and Warranties Relating to the
Mortgage Loans.
(a) CHL represents and warrants to the Purchaser as of the Cut-off Date,
unless specifically stated otherwise:
(1) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, this Agreement constitutes a valid
and legally binding obligation of CHL, enforceable against CHL in
accordance with its terms.
(2) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, either
(A) this Agreement constitutes a valid transfer to the
Purchaser of all right, title, and interest of each of the Sellers
in the applicable Mortgage Loans, and all collections received in
respect of the applicable Mortgage Loans after the Cut-off Date or
Subsequent Cut-off Date, as applicable (excluding payments due by
the Cut-off Date or Subsequent Cut-off Date, as applicable), all
proceeds of the applicable Mortgage Loans, and all other property
specified in Section 2.01(a) or (b), and the Sale and Servicing
Agreement constitutes a valid transfer to the Trust of the foregoing
property and all other property specified in Section 2.01(a) or (b)
of the Sale and Servicing Agreement such that, on execution of the
Sale and Servicing Agreement, it is owned by the Trust free of all
liens and other encumbrances, and is part of the corpus of the Trust
transferred to the Trust by the Purchaser, and upon payment for the
Additional Balances, this Agreement and the Sale and Servicing
Agreement will constitute a valid transfer to the Trust of all
interest of each of the Sellers in the Additional Balances, all
proceeds of the Additional Balances, and all other
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property specified in Section 2.01(a) of the Sale and Servicing
Agreement relating to the Additional Balances free of all liens and
other encumbrances, and the Indenture constitutes a valid Grant of a
Security Interest to the Indenture Trustee in that property, and the
Indenture Trustee has a first priority perfected Security Interest
in the property, subject to the effect of Section 9-315 of the UCC
with respect to collections on the Mortgage Loans that are deposited
in the Collection Account in accordance with the next to last
paragraph of Section 3.02(b) of the Sale and Servicing Agreement, or
(B) this Agreement or the Sale and Servicing Agreement, as
appropriate, constitutes a Grant of a Security Interest to the Owner
Trustee on behalf of the Trust and the Indenture constitutes a Grant
of a Security Interest to the Indenture Trustee in the property
described in clause (A) above. If this Agreement and the Sale and
Servicing Agreement constitute the Grant of a Security Interest to
the Trust and the Indenture constitutes a Grant of a Security
Interest to the Indenture Trustee in such property, the Indenture
Trustee will have a first priority perfected Security Interest in
the property, subject to the effect of Section 9-315 of the UCC with
respect to collections on the Mortgage Loans that are deposited in
the Collection Account in accordance with the next to last paragraph
of Section 3.02(b) of the Sale and Servicing Agreement. This
Security Interest is enforceable as such against creditors of and
purchasers from the Trust, the Purchaser, and each of the Sellers.
(3) CHL has not authorized the filing of and is not aware of any
financing statements against either Seller that include a description of
collateral covering the Collateral other than any financing statement (A)
relating to the Security Interests granted to the Depositor, the Trust, or
the Indenture Trustee under this Agreement, pursuant to the Sale and
Servicing Agreement, or pursuant to the Indenture, (B) that has been
terminated, or (C) that names the Depositor, the Trust, or the Indenture
Trustee as secured party.
(4) As of the Closing Date, the information in the Mortgage Loan
Schedule for the Initial Mortgage Loans is correct in all material
respects. As of the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, the information in the Mortgage Loan
Schedule for the relevant Additional Home Equity is correct in all
material respects. As of the applicable date of substitution for an
Eligible Substitute Mortgage Loan, the information with respect to the
Eligible Substitute Mortgage Loan in the Mortgage Loan Schedule is correct
in all material respects. As of the date any Additional Balance is
created, the information as to the Mortgage Loan
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identification number and the Additional Balance of that Mortgage Loan
reported for inclusion in the Mortgage Loan Schedule is correct in all
material respects.
(5) The applicable Mortgage Loans have not been assigned or pledged,
and the related Seller is their sole owner and holder free of any liens,
claims, encumbrances, participation interests, equities, pledges, charges,
or Security Interests of any nature, and has full authority, under all
governmental and regulatory bodies having jurisdiction over the ownership
of the applicable Mortgage Loans, to transfer them pursuant to this
Agreement.
(6) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, the related Mortgage Note and the
mortgage for each Mortgage Loan have not been assigned or pledged, and
immediately before the sale of the Mortgage Loans to the Purchaser, the
related Seller was the sole owner and holder of the Mortgage Loan free of
any liens, claims, encumbrances, participation interests, equities,
pledges, charges, or Security Interests of any nature, and has full
authority, under all governmental and regulatory bodies having
jurisdiction over the ownership of the applicable Mortgage Loans, to
transfer it pursuant to this Agreement.
(7) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, the related mortgage is a valid and
subsisting first or second lien on the property described in it, as shown
on the Mortgage Loan Schedule with respect to each related Mortgage Loan,
and as of the Cut-off Date, relevant Subsequent Closing Date, or date of
substitution, as applicable, the related Mortgaged Property is free of all
encumbrances and liens having priority over the first or second lien, as
applicable, of the mortgage except for liens for
(A) real estate taxes and special assessments not yet
delinquent;
(B) any first mortgage loan secured by the Mortgaged Property
and specified on the Mortgage Loan Schedule;
(C) covenants, conditions and restrictions, rights of way,
easements, and other matters of public record as of the date of
recording that are acceptable to mortgage lending institutions
generally; and
(D) other matters to which like properties are commonly
subject that do not materially interfere with the benefits of the
security intended to be provided by the mortgage.
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(8) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, no obligor has a valid offset,
defense, or counterclaim under any Credit Line Agreement or mortgage.
(9) To the best knowledge of CHL, as of the Closing Date with
respect to the Initial Mortgage Loans, the relevant Subsequent Closing
Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage
Loan, no related Mortgaged Property has any delinquent recording or other
tax or fee or assessment lien or governmental charge against it, other
than those that have been or will be paid by the Seller.
(10) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, no proceeding is pending or, to the
best knowledge of CHL, threatened for the total or partial condemnation of
the related Mortgaged Property, and the property is free of material
damage and is in good repair.
(11) To the best knowledge of CHL, as of the Closing Date with
respect to the Initial Mortgage Loans, the relevant Subsequent Closing
Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage
Loan, no mechanics' or similar liens or claims have been filed for work,
labor, or material affecting the related Mortgaged Property that are, or
may be, liens prior or equal to the lien of the related mortgage, except
liens that are fully insured against by the title insurance policy
referred to in clause (16).
(12) As of the Initial Cut-off Date, no Initial Mortgage Loan is 60
days or more delinquent and no more than the applicable percentage
specified in the Adoption Annex of the Initial Mortgage Loans in a Loan
Group being transferred on the Closing Date (by Cut-off Date Loan Balance)
were 30-59 days delinquent; and as of the applicable date on which any
other Mortgage Loan is being subsequently transferred, no such Mortgage
Loan is 30 days or more delinquent.
(13) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, the Mortgage File for each Mortgage
Loan contains each of the documents specified to be included in it.
(14) At origination, each Mortgage Loan and the related Mortgage
Note complied in all material respects with applicable local, state, and
federal laws, including
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all applicable predatory and abusive lending laws, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, or disclosure laws applicable to the
Mortgage Loan, and the servicing practices used by the Master Servicer
with respect to each Mortgage Loan have been consistent with the practices
and the degree of skill and care the Master Servicer exercises in
servicing for itself loans that it owns that are comparable to the
Mortgage Loans.
(15) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, no Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or
after October 1, 2002 through March 6, 2003 is governed by the Georgia
Fair Lending Act; and "High Cost Loan" and "Covered Loan" have the meaning
assigned to them in the Standard & Poor's LEVELS(R) Glossary attached as
Schedule II (the "Glossary") where
(x) a "High Cost Loan" is each loan identified in the column
"Category under applicable anti-predatory lending law" of the table
entitled "Standard & Poor's High Cost Loan Categorization" in the
Glossary as each such loan is defined in the applicable
anti-predatory lending law of the state or jurisdiction specified in
such table and
(y) "Covered Loan" is each loan identified in the column
"Category under applicable anti-predatory lending law" of the table
entitled "Standard & Poor's Covered Loan Categorization" in the
Glossary as each such loan is defined in the applicable
anti-predatory lending law of the state or jurisdiction specified in
such table.
(16) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, either a lender's title insurance
policy or binder was issued or a guaranty of title customary in the
relevant jurisdiction was obtained, on the date of origination of the
Mortgage Loan being transferred on the relevant date and each policy is
valid and remains in full force.
(17) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, none of the Mortgaged Properties is
a mobile home or a manufactured housing unit that is not considered or
classified as part of the real estate under the laws of the jurisdiction
in which it is located.
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(18) No more than the percentage specified in the Adoption Annex of
the Initial Mortgage Loans in each Loan Group, by aggregate principal
balance of the related Mortgage Loans, are secured by Mortgaged Properties
located in one United States postal zip code.
(19) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, the Combined Loan-to-Value Ratio
for each Mortgage Loan in each Loan Group was not in excess of the
percentage specified in the Adoption Annex.
(20) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, no selection procedure reasonably
believed by CHL to be adverse to the interests of the Transferor, the
Noteholders, or the Credit Enhancer was used in selecting the Mortgage
Loans.
(21) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, neither Seller has transferred the
Mortgage Loans to the Trust with any intent to hinder, delay, or defraud
any of its creditors.
(22) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, the Minimum Monthly Payment with
respect to any Mortgage Loan is not less than the interest accrued at the
applicable Loan Rate on the average daily Asset Balance during the
interest period relating to the date on which the Minimum Monthly Payment
is due.
(23) The Mortgage Notes constitute either "instruments" or "general
intangibles" as defined in the UCC.
(24) By the Closing Date with respect to the Initial Mortgage Loans,
the relevant Subsequent Closing Date with respect to any Additional Home
Equity Loans, or within 30 days of the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the Sponsor will
file UCC1 financing statements in the proper filing office in the
appropriate jurisdiction to perfect the Security Interest in the
Collateral Granted under the Indenture.
(25) The Mortgage Notes that constitute or evidence the Collateral
do not have any marks or notations indicating that they have been pledged,
assigned, or otherwise
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transferred to any person other than the Purchaser, the Trust, or the
Indenture Trustee. All financing statements filed or to be filed against
each Seller in favor of the Purchaser, the Trust, or the Indenture Trustee
in connection with this Agreement, the Sale and Servicing Agreement, or
the Indenture describing the Collateral contain a statement to the
following effect: "A purchase of the Mortgage Loans included in the
collateral covered by this financing statement will violate the rights of
the Purchaser, the Trust, or the Indenture Trustee."
(26) As of the Closing Date, CHL and Park Monaco will have received
a written acknowledgement from the Custodian that is acting solely as
agent of the Indenture Trustee.
(27) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, each Credit Line Agreement and each
Mortgage Loan is an enforceable obligation of the related mortgagor.
(28) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, neither Seller has received a
notice of default of any senior mortgage loan related to a Mortgaged
Property that has not been cured by a party other than the Master
Servicer.
(29) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, the definition of "prime rate" in
each Credit Line Agreement relating to a Mortgage Loan does not differ
materially from "the highest `prime rate' as published in the `Money
Rates' table of The Wall Street Journal as of the first business day of
the calendar month for the applicable interest rate adjustment date."
(30) The weighted average remaining term to maturity of the Initial
Mortgage Loans in each Loan Group on a contractual basis as of the Cut-off
Date is approximately the number of months specified for that Loan Group
in the Adoption Annex. On each date that the Loan Rates have been
adjusted, interest rate adjustments on the Initial Mortgage Loans were
made in compliance with the related mortgage and Mortgage Note and
applicable law. Over the term of each Mortgage Loan, the Loan Rate may not
exceed the related Loan Rate Cap. The Loan Rate Cap for the Initial
Mortgage Loans ranges between the percentages specified in the Adoption
Annex for that Loan Group and the weighted average Loan Rate Cap is
approximately the percentage specified in the Adoption Annex for that Loan
Group. The Gross Margins for the Initial Mortgage Loans in each Loan Group
range between the percentages specified in the Adoption Annex for that
Loan Group and the weighted average Gross Margin is approximately the
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percentage specified in the Adoption Annex for that Loan Group as of the
Cut-off Date for the Initial Mortgage Loans. The Loan Rates on the Initial
Mortgage Loans in each Loan Group range between the percentages specified
in the Adoption Annex for that Loan Group and the weighted average Loan
Rate on the Initial Mortgage Loans is approximately the percentage
specified in the Adoption Annex for that Loan Group..
(31) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, each Mortgaged Property consists of
a single parcel of real property with a one-to-four unit single family
residence erected on it, or an individual condominium unit, planned unit
development unit, or townhouse.
(32) No more than the percentage specified in the Adoption Annex (by
Cut-off Date Loan Balance) for each Loan Group of the Initial Mortgage
Loans in the related Loan Group are secured by real property improved by
individual condominium units, units in planned unit developments,
townhouses, or two-to-four family residences erected on them, and at least
the percentage specified in the Adoption Annex (by Cut-off Date Loan
Balance) for each Loan Group of the Mortgage Loans in the related Loan
Group are secured by real property with a detached one-family residence
erected on them.
(33) The Credit Limits on the Initial Mortgage Loans in each Loan
Group range between approximately the dollar amounts specified in the
Adoption Annex for that Loan Group with an average of approximately the
dollar amount specified in the Adoption Annex for that Loan Group. As of
the Cut-off Date for the Initial Mortgage Loans, no Mortgage Loan in
either Loan Group had a principal balance in excess of approximately the
dollar amount specified in the Adoption Annex for that Loan Group and the
average principal balance of the Initial Mortgage Loans in each Loan Group
is equal to approximately the dollar amounts specified in the Adoption
Annex for that Loan Group.
(34) Approximately the percentages specified in the Adoption Annex
of the Initial Mortgage Loans, by aggregate principal balance as of the
Cut-off Date, are secured by first and second liens.
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(35) As of the Closing Date, no more than the percentage specified
in the Adoption Annex for each Loan Group of the Initial Mortgage Loans in
the related Loan Group, by aggregate principal balance, were appraised
electronically.
(36) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, no default exists under any
applicable Mortgage Note or applicable Mortgage Loan and no event that,
with the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default under any applicable Mortgage Note
or applicable Mortgage Loan has occurred and been waived. As of the
Closing Date with respect to the Initial Mortgage Loans, the relevant
Subsequent Closing Date with respect to any Additional Home Equity Loans,
or the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, no modifications to the applicable Mortgage
Notes and applicable Mortgage Loans have been made and not disclosed.
(37) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, each Mortgage Loan was originated
in accordance with the Sponsor's underwriting guidelines and the Sponsor
had no knowledge of any fact that would have caused a reasonable
originator of mortgage loans to conclude on the date of origination of
each Mortgage Loan that each such Mortgage Loan would not be paid in full
when due.
(38) To the best knowledge of CHL at the time of origination of each
Mortgage Loan, no improvement located on or being part of the Mortgaged
Property was in violation of any applicable zoning and subdivision laws or
ordinances.
(39) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, any leasehold estate securing a
Mortgage Loan has a term of not less than five years in excess of the term
of the related Mortgage Loan.
(40) Based on the drawn balances of the Initial Mortgage Loans, the
Initial Mortgage Loans had the characteristics set out in the Adoption
Annex for each Loan Group in respect of the following: weighted average
Combined Loan-to-Value Ratio; range of Combined Loan-to-Value Ratios;
percentage of primary residences; weighted average FICO score; range of
FICO scores; Weighted Average Net Loan Rate; range of net Loan Rates;
weighted average original stated term to maturity; range of original
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term to maturity; range of remaining term to maturity; average drawn
balance; weighted average utilization ratio; and percentage of the Initial
Mortgage Loans that have their respective Mortgaged Properties located in
the top five states, measured by aggregate drawn balances.
(41) Any Initial Mortgage Loan that has been modified in any manner
has been so modified in accordance with the policies and procedures of the
Master Servicer and in a manner that was permitted by the Sale and
Servicing Agreement, the Indenture, and any other Transaction Document.
(42) Each Initial Mortgage Loan was originated (within the meaning
of Section 3(a)(41) of the Securities Exchange Act of 1934) by an entity
that satisfied at the time of origination the requirements of Section
3(a)(41) of the Securities Exchange Act of 1934.
(43) At the time each Initial Mortgage Loan was originated, each
Seller was, and each Seller is an approved seller of conventional mortgage
loans for Xxxxxx Xxx and Xxxxxxx Mac and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and
211 of the National Housing Act.
(44) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if applicable,
in an amount at least equal to the principal balance of the related
Mortgage Loan as of the Cut-off Date or the relevant Subsequent Cut-off
Date, as applicable, or a commitment (binder) to issue the same was
effective on the date of the origination of each Mortgage Loan, each such
policy is valid and remains in full force, and each such policy was issued
by a title insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located and acceptable to Xxxxxx Mae and Xxxxxxx Mac
and is in a form acceptable to Xxxxxx Mae and Xxxxxxx Mac, which policy
insures the Sponsor and successor owners of indebtedness secured by the
insured Mortgage, as to the first priority lien, of the Mortgage subject
to the exceptions in paragraph (7) above.
(45) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, the improvements on each Mortgaged
Property are covered by a valid and existing hazard insurance policy with
a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the area
where the Mortgaged Property is located in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing the Mortgage Loan or (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the
proceeds of the policy will be sufficient to prevent the
18
Mortgagor or the mortgagee from becoming a co-insurer. If the Mortgaged
Property is a condominium unit, it is included under the coverage afforded
by a blanket policy for the condominium unit. All such individual
insurance policies and all flood policies referred to in item (46) below
contain a standard mortgagee clause naming the Sponsor or the original
mortgagee, and its successors in interest, as mortgagee, and the Sponsor
has received no notice that any premiums due and payable thereon have not
been paid, and the Mortgage obligates the Mortgagor thereunder to maintain
all such insurance, including flood insurance, at the Mortgagor's expense,
and upon the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at the Mortgagor's expense
and to seek reimbursement therefor from the Mortgagor.
(46) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to the Mortgaged Property with a
generally acceptable carrier in an amount representing coverage not less
than the least of (A) the outstanding principal balance of the Mortgage
Loan and any mortgage loan senior to that Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost
basis, or (C) the maximum amount of insurance that is available under the
National Flood Insurance Act of 1968.
(47) Each Mortgage Note and the related Mortgage are genuine, and
each is the valid and legally binding obligation of its maker, enforceable
in accordance with its terms and under applicable law, except that (a) its
enforceability may be limited by bankruptcy, insolvency, moratorium,
receivership, and other similar laws relating to creditors' rights
generally and (b) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and
to the discretion of the court before which any proceeding therefor may be
brought. To the best of CHL's knowledge, all parties to the Mortgage Note
and the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage and each Mortgage Note and Mortgage have been duly and properly
executed by such parties.
(48) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(49) To the best of CHL's knowledge, all of the improvements that
were included for the purpose of determining the appraised value of the
Mortgaged Property lie wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach on the Mortgaged Property.
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(50) To the best of CHL's knowledge, all inspections, licenses, and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities, unless their lack would not have a material adverse effect on
the value of the Mortgaged Property, and the Mortgaged Property is
lawfully occupied under applicable law.
(51) Each Mortgage contains customary and enforceable provisions
that render the rights and remedies of its holder adequate for the
realization against the Mortgaged Property of the benefits of the security
intended to be provided by it, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(52) Before the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the Sponsor, who had no interest, direct or
indirect, in the Mortgaged Property or in any loan secured by the
Mortgaged Property, and whose compensation is not affected by the approval
or disapproval of the Mortgage Loan.
(53) Except for (A) payments in the nature of escrow payments, and
(B) interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is later, to the day that
precedes by one month the Due Period of the first installment of principal
and interest and taxes and insurance payments, the Sponsor has not
advanced funds, or induced, solicited, or knowingly received any advance
of funds by a party other than the Mortgagor, directly or indirectly, for
the payment of any amount required by the Mortgage.
(54) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, no foreclosure proceedings are
pending against any Mortgaged Property and no Mortgage Loan is subject to
any pending bankruptcy or insolvency proceeding.
(55) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or the applicable date of substitution with respect to
any Eligible Substitute Mortgage Loan, there is no homestead exemption
available and enforceable that materially interferes with the right to
sell any Mortgaged Property at a trustee's sale or the right to foreclose
the related Mortgage.
(56) No borrower was required to purchase any single premium credit
insurance policy (e.g., life, disability, accident, unemployment, or
health insurance product) or
20
debt cancellation agreement as a condition of obtaining the extension of
credit. No borrower obtained a prepaid single-premium credit insurance
policy (e.g., life, disability, accident, unemployment, mortgage, or
health insurance) in connection with the origination of the Mortgage Loan.
No proceeds from any Mortgage Loan were used to purchase debt cancellation
agreements as part of the origination of, or as a condition to closing,
the Mortgage Loan.
(57) The Initial Mortgage Loans, individually and in the aggregate,
conform in all material respects to their descriptions in the Prospectus
Supplement.
(58) Each Mortgage Loan represents a "qualified mortgage" within the
meaning of Section 860(a)(3) of the Code (but without regard to the rule
in Treasury Regulation ss. 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any substantially similar successor
provision).
(59) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994.
(60) No Mortgage Loan originated on or after October 1, 2002 and
before March 7, 2003 is secured by Mortgaged Property located in the State
of Georgia. No Mortgage Loan in Loan Group 1 originated on or after March
7, 2003 is a "high cost home loan" as defined under the Georgia Fair
Lending Act.
(61) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any Additional
Home Equity Loans, or, with respect to any Eligible Substitute Mortgage
Loan, the applicable date of substitution, no Mortgage Loan is classified
as (1) a "high cost" loan under the Home Ownership and Equity Protection
Act of 1994 or (2) a "high cost," "threshold," "covered," "predatory," or
similar loan under any other applicable state, federal, or local law that
applies to mortgage loans (or a similar classified loan using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points, or fees).
(62) No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, the Mortgage Loan.
(63) No subprime Mortgage Loan originated on or after October 1,
2002 will impose a prepayment premium after the third anniversary of the
Mortgage Loan. No subprime Mortgage Loan originated before October 1,
2002, and no non-subprime Mortgage Loan, will impose a prepayment penalty
after the fifth anniversary of the Mortgage Loan.
(64) The servicer for each Mortgage Loan has fully furnished, and
will continue to furnish, in accordance with the Fair Credit Reporting Act
and its implementing
21
regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company on a monthly basis.
(65) All of the Mortgage Loans in Loan Group 1 conform to Xxxxxx Xxx
or Xxxxxxx Mac maximum principal balance (by credit limit) guidelines.
(66) All of the Mortgage Loans in Loan Group 1:
o Are backed by a one- to four-family residence that is
the principal residence of the borrower at the time of
the origination of the Mortgage Loan;
o Have original loan amounts that do not exceed
one-half of the one-unit limitation for first
mortgages, or $208,500 (in Alaska, Guam, Hawaii or
Virgin Islands: $312,750), without regard to the
number of units; and
o The aggregate original principal balance of the first
and subordinate lien mortgage loans relating to the same
mortgaged property does not exceed Xxxxxxx Mac's
applicable loan limits for first-lien mortgages for that
property type.
(67) As of the Closing Date with respect to the Initial Mortgage
Loans in Loan Group 1, the relevant Subsequent Closing Date with respect
to any Additional Home Equity Loans added to Loan Group 1, or the
applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan added to Loan Group 1, the borrower was not encouraged or
required to select a mortgage loan product offered by the mortgage loan's
originator which is a higher cost product designed for less creditworthy
borrowers, taking into account such facts as, without limitation, the
mortgage loan's requirements and the borrower's credit history, income,
assets and liabilities.
(68) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs objective mathematical principles which
relate the borrower's income, assets and liabilities to the proposed
payment and such underwriting methodology does not rely on the extent of
the borrower's equity in the collateral as the principal determining
factor in approving such credit extension. Such underwriting methodology
confirmed that at the time of origination the borrower had the reasonable
ability to make timely payments on the Mortgage Loan.
(69) No borrower under a Mortgage Loan in Loan Group 1 was charged
"points and fees" in an amount greater than (a) $1,000 or (b) 5% of the
principal balance of such Mortgage Loan, whichever is greater. For
purposes of this representation, "points and fees" (x) include
origination, underwriting, broker and finder's fees and charges that the
lender imposed as a condition of making the Mortgage Loan, whether they
are
22
paid to the lender or a third party; and (y) exclude bona fide discount
points, fees paid for actual services rendered in connection with the
origination of the Mortgage Loan (such as attorneys' fees, notaries fees
and fees paid for property appraisals, credit reports, surveys, title
examinations and extracts, flood and tax certifications, and home
inspections), the cost of mortgage insurance or credit-risk price
adjustments; the costs of title, hazard, and flood insurance policies,
state and local transfer taxes or fees, escrow deposits for the future
payment of taxes and insurance premiums, and other miscellaneous fees and
charges that, in total, do not exceed 0.25 percent of the initial
principal balance of the Mortgage Loan.
(70) With respect to any Mortgage Loan in Loan Group 1 originated
from August 1, 2004 through April 30, 2005, if the related mortgage or the
related Mortgage Note, or any document relating to the loan transaction,
contains a mandatory arbitration clause (that is, a clause that requires
the borrower to submit to arbitration to resolve any dispute arising out
of or relating in any way to the mortgage loan transaction), CHL (i) will
notify the related borrower in writing within 60 days after the issuance
of the Notes (or, with respect to mortgage loans transferred to the Trust
after the date of the issuance of the Notes, 60 days after the date of
transfer if it has not given such notice at an earlier time), that none of
the related Seller, the Servicer or any subsequent party that acquires an
interest in the loan or services it will enforce such arbitration clause
against the borrower, but that the borrower will continue to have the
right to submit a dispute to arbitration and (ii) will place a copy of
such notice in the Mortgage File; with respect to any Mortgage Loan in
Loan Group 1 originated on or after May 1, 2005, neither the related
mortgage nor the related Mortgage Note requires the borrower to submit to
arbitration to resolve any dispute arising out of or relating in any way
to the mortgage loan transaction.
(71) The Class 1-A Notes represent interests primarily in Loan Group
1. Payments of interest and principal to the Class 1-A Notes will be made
first from payments relating to Loan Group 1.
(b) If the substance of any representation or warranty under the Sale and
Servicing Agreement or in this Section made to the best of CHL's knowledge or as
to which a Seller has no knowledge is inaccurate and the inaccuracy materially
and adversely affects the interest of the Purchaser or its assignee in the
related Mortgage Loan, then, notwithstanding that the Seller did not know the
substance of the representation and warranty was inaccurate at the time the
representation or warranty was made, the inaccuracy shall be a breach of the
applicable representation or warranty and CHL shall cure the breach, repurchase
the Mortgage Loan, or substitute for the Mortgage Loan in accordance with the
Sale and Servicing Agreement.
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(c) The representations and warranties in this Section shall survive the
transfer and assignment of the Mortgage Loans to the Purchaser. The sole remedy
of the Purchaser, the Noteholders, the Indenture Trustee on behalf of
Noteholders, and the Credit Enhancer against a Seller for the breach of a
representation or warranty is CHL's obligation to accept a transfer of a
Mortgage Loan as to which a breach has occurred and is continuing and to make
any required deposit in the Collection Account or to substitute an Eligible
Substitute Mortgage Loan.
(d) The Purchaser acknowledges that CHL, as Master Servicer, in its sole
discretion, may purchase for its own account from the Trust any Mortgage Loan
that is 151 days or more delinquent. The price for any Mortgage Loan purchased
shall be calculated in the same manner as in Section 3.06 of the Sale and
Servicing Agreement and shall be deposited in the Collection Account. When it
receives a certificate from the Master Servicer in the form of Exhibit D to the
Sale and Servicing Agreement, the Trust shall release to the purchaser of the
Mortgage Loan the related Mortgage File and shall execute and deliver any
instruments of transfer prepared by the purchaser of the Mortgage Loan, without
recourse, necessary to vest in the purchaser of the Mortgage Loan any Mortgage
Loan released pursuant to this Agreement, and the purchaser of the Mortgage Loan
shall succeed to all the Trust's interest in the Mortgage Loan and all security
and documents. This assignment shall be an assignment outright and not for
security. The purchaser of the Mortgage Loan shall then own the Mortgage Loan,
and all security and documents, free of any further obligation to the Trust, the
Owner Trustee, the Indenture Trustee, the Transferor, the Credit Enhancer, or
the Noteholders with respect to it.
(e) A breach of any one of the representations in Sections 3.02(a)(58) to
(71) will be considered to materially adversely affect the interests of the
Noteholders and the Credit Enhancer.
ARTICLE IV
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers.
Except for the transfer under this Agreement, none of the Sellers will
transfer to any other person, or create or suffer to exist any Lien on any
Mortgage Loan, or any interest in one; each Seller will notify the Indenture
Trustee of the existence of any Lien on any Mortgage Loan immediately on its
discovery; and CHL will defend the right, title, and interest of the Trust and
the Indenture Trustee in the Mortgage Loans against all claims of third parties
claiming through a Seller. Nothing in this Section shall prohibit a Seller from
suffering to exist on any of the Mortgage Loans any Liens for municipal or other
local taxes and other governmental charges if
24
they are not due at the time or if the applicable Seller is contesting their
validity in good faith by appropriate proceedings and set aside on its books
adequate reserves with respect to them.
ARTICLE V
SERVICING
Section 5.01. Servicing.
CHL will be the Master Servicer of the Mortgage Loans pursuant to the Sale
and Servicing Agreement.
ARTICLE VI
TERMINATION
Section 6.01. Termination.
The respective obligations of each of the Sellers and the Purchaser
created by this Agreement shall terminate when the Indenture terminates in
accordance with its terms.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment.
This Agreement may be amended from time to time by CHL, Park Monaco, and
the Purchaser, with the written consent of the Credit Enhancer, by written
agreement signed by CHL, Park Monaco, and the Purchaser.
Section 7.02. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD
RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER STATE.
Section 7.03. Notices.
All notices, demands, instructions, consents, and other communications
required or permitted under this Agreement shall be in writing and signed by the
party giving the same and shall be personally delivered or sent by first class
or express mail (postage prepaid), national overnight courier service, or by
facsimile transmission or other electronic communication device capable of
transmitting or creating a written record (confirmed by first class mail) and
shall be considered to be given for purposes of this Agreement on the day that
the writing is
25
delivered when personally delivered or sent by facsimile or overnight courier or
three Business Days after it was sent to its intended recipient if sent by first
class mail. A facsimile has been delivered when the sending machine issues an
electronic confirmation of transmission. Unless otherwise specified in a notice
sent or delivered in accordance with the provisions of this Section, notices,
demands, instructions, consents, and other communications in writing shall be
given to or made on the respective parties at their respective addresses
indicated below:
(i) if to CHL at:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 2006-G
(ii) if to Park Monaco
Park Monaco Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 2006-G
and
(iii) if to the Purchaser at:
CWHEQ, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 2006-G
Section 7.04. Severability of Provisions.
Any provisions of this Agreement that are held invalid for any reason or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the invalidity or unenforceability without invalidating the
remaining provisions of this Agreement, and the prohibition or unenforceability
in a jurisdiction shall not invalidate or render unenforceable that provision in
any other jurisdiction.
Section 7.05. Counterparts; Electronic Delivery.
This Agreement may be executed in any number of copies, and by the
different parties on the same or separate counterparts, each of which shall be
considered to be an original instrument. Any signature page to this Agreement
containing a manual signature may be delivered by facsimile transmission or
other electronic communication device capable of transmitting or creating a
printable written record, and when so delivered shall have the effect of
delivery of an original manually signed signature page.
26
Section 7.06. Further Agreements.
The Purchaser and each Seller agree to execute and deliver to the other
any additional documents appropriate to effectuate the purposes of this
Agreement or in connection with the issuance of the Notes.
Section 7.07. Successors and Assigns: Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable
by each Seller, the Purchaser, the Trust, the Indenture Trustee, and the Credit
Enhancer. The obligations of each Seller under this Agreement cannot be assigned
or delegated to a third party without the consent of the Purchaser and the
Credit Enhancer, except that any Seller may assign its obligations under this
Agreement to any person into which that Seller is merged or any corporation
resulting from any merger, conversion, or consolidation to which that Seller is
a party or any person succeeding to the business of that Seller. The Purchaser
is acquiring the Mortgage Loans to further transfer them to the Trust, and the
Trust will Grant a Security Interest in them to the Indenture Trustee under the
Indenture pursuant to which the Trust will issue a series of Notes secured by
the Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, each Seller consents to the assignment by the Purchaser to the Trust, and
by the Trust to the Indenture Trustee of all of the Purchaser's rights against
it under this Agreement insofar as they relate to the Mortgage Loans transferred
to the Trust applicable to that Seller and to the enforcement or exercise of any
right against that Seller pursuant to this Agreement by the Indenture Trustee
under the Sale and Servicing Agreement and the Indenture. Enforcement of a right
by the Indenture Trustee shall have the same effect as if the right had been
exercised by the Purchaser directly.
Section 7.08. Survival.
The representations and warranties in Article III shall survive the
purchase of the Mortgage Loans.
27
In Witness Whereof, the Sellers and the Purchaser have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
CWHEQ, Inc.
as Purchaser
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
as a Seller
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
PARK MONACO INC.
as a Seller
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
28
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 30th day of August, 2006 before me, a Notary Public in and for said
State, personally appeared Xxxxxx Xxxxx, known to me to be a Vice President of
CWHEQ, Inc., the corporation that executed the within instrument, and also known
to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
------------------------------
Notary Public
Xxxxxx X. Xxxxxx
Commission # 1609859
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
29
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 30th day of August, 2006 before me, Xxxxxx Xxxxx of Countrywide
Home Loans, Inc., personally appeared, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity on behalf of which the person acted, executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Notary Public
Xxxxxx X. Xxxxxx
Commission # 1609859
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
30
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 30th day of August, 2006 before me, Xxxxxx Xxxxx of PARK MONACO
INC., personally appeared, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity on behalf of which the person acted, executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
----------------------------
Notary Public
Xxxxxx X. Xxxxxx
Commission # 1609859
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
31
SCHEDULE I
SCHEDULE OF
MORTGAGE LOANS
[Delivered to the Indenture Trustee only]
Sch-I-1
SCHEDULE II
STANDARD & POOR'S GLOSSARY
Standard & Poor's Predatory Lending Categorization
Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the jurisdictions listed below into three categories based on a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
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Standard & Poor's High-Cost Loan Categorization
-------------------------------------------------------------------------------
Category under applicable anti-predatory
State/jurisdiction lending law
-------------------------------------------------------------------------------
Arkansas High Cost Home Loan
-------------------------------------------------------------------------------
Cleveland Heights, Ohio Covered Loan
-------------------------------------------------------------------------------
Colorado Covered Loan
-------------------------------------------------------------------------------
Connecticut High Cost Home Loan
-------------------------------------------------------------------------------
District of Columbia Covered Loan
-------------------------------------------------------------------------------
Florida High Cost Home Loan
-------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 6, High Cost Home Loan
2003)
-------------------------------------------------------------------------------
Georgia as amended (March 7, High Cost Home Loan
2003 - current)
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HOEPA Section 32 High Cost Loan
-------------------------------------------------------------------------------
Illinois High Risk Home Loan
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Kansas High Loan-to-Value Consumer Loans and High
APR Consumer Loans
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Kentucky High Cost Home Loan
-------------------------------------------------------------------------------
Los Angeles, Calif. High Cost Refinance Home Loan
-------------------------------------------------------------------------------
Maine High Rate High Fee mortgage
-------------------------------------------------------------------------------
Massachusetts High Cost Home Loan
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Nevada Home Loan
-------------------------------------------------------------------------------
New Jersey High Cost Home Loan
-------------------------------------------------------------------------------
New York High Cost Home Loan
-------------------------------------------------------------------------------
New Mexico High Cost Home Loan
-------------------------------------------------------------------------------
North Carolina High Cost Home Loan
-------------------------------------------------------------------------------
Oakland, Calif. High Cost Home Loan
-------------------------------------------------------------------------------
Ohio Covered Loan
-------------------------------------------------------------------------------
Oklahoma Subsection 10 Mortgage
-------------------------------------------------------------------------------
South Carolina High Cost Home Loan
-------------------------------------------------------------------------------
West Virginia West Virginia Mortgage Loan Act Loan
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Standard & Poor's Covered Loan Categorization
-------------------------------------------------------------------------------
Category under applicable
State/jurisdiction anti-predatory lending law
-------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 6, 2003) Covered Loan
-------------------------------------------------------------------------------
New Jersey Covered Home Loan
-------------------------------------------------------------------------------
Sch-II-1
-------------------------------------------------------------------------------
Standard & Poor's Home Loan Categorization
-------------------------------------------------------------------------------
Category under applicable
State/jurisdiction anti-predatory lending law
-------------------------------------------------------------------------------
Georgia (Oct. 1, 2002- March 6, 2003) Home Loan
-------------------------------------------------------------------------------
New Jersey Home Loan
-------------------------------------------------------------------------------
New Mexico Home Loan
-------------------------------------------------------------------------------
North Carolina Consumer Home Loan
-------------------------------------------------------------------------------
Oakland, Calif. Home Loan
-------------------------------------------------------------------------------
South Carolina Consumer Home Loan
-------------------------------------------------------------------------------
Sch-II-2
ANNEX 1
ADOPTION ANNEX
The purchase price for the Mortgage Loans pursuant to Section 2.03 is the
transfer to the Seller on the Closing Date of the Transferor Certificates and
the proceeds from the sale of the Notes.
The items referred to in the representations and warranties in Section
3.02 are:
(12) 0.00% and 0.02% of the Mortgage Loans in Loan Group 1 and Loan Group
2, respectively, being transferred on the relevant date (by Cut-off Date Loan
Balance) were 30-59 days delinquent as of the Cut-off Date.
(18) As of the Cut-off Date no more than 0.45 % and 0.84 % of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate
principal balance, are secured by Mortgaged Properties located in one United
States postal zip code.
(19) The Combined Loan-to-Value Ratio for each Mortgage Loan was not in
excess of 100.00%.
(30) The weighted average remaining term to maturity of the Mortgage
Loans on a contractual basis as of the Cut-off Date is approximately 298.84 and
298.41 months with respect to the Mortgage Loans in Loan Group 1 and Loan Group
2, respectively. The Loan Rate Caps for the Mortgage Loans range between 14.125
% and 21.000 % and 11.950 % and 21.000 % with respect to the Mortgage Loans in
Loan Group 1 and Loan Group 2, respectively, and the weighted average Loan Rate
Cap is approximately 7.459% and 7.759%, with respect to the Mortgage Loans in
Loan Group 1 and Loan Group 2, respectively. The Gross Margins for the Mortgage
Loans range between 0.00 % and 14.01 % and -1.75 % and 17.01 % with respect to
the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, and the
weighted average Gross Margin is approximately 3.503 % and 2.501 % as of the
Cut-off Date for the Mortgage Loans in Loan Group 1 and Loan Group 2,
respectively. The Loan Rates on the Mortgage Loans range between 3.990 % and
16.375 % and 3.990 % and 16.000 % with respect to the Mortgage Loans in Loan
Group 1 and Loan Group 2, respectively, and the weighted average Loan Rate on
the Mortgage Loans is approximately 11.387 % and 10.628 % with respect to the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. As of the
Cut-off Date, 100.00% and 0.00% of the Mortgage Loans in Loan Group 1 and Loan
Group 2, respectively, by aggregate principal balance, have original principal
balances (by credit limit) that conform to Xxxxxx Xxx or Xxxxxxx Mac
guidelines.
(32) No more than 33.68 % and 39.51 % (by Cut-off Date Loan Balance) of
the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are secured
by real property improved by individual condominium units, units in planned
unit developments, townhouses, or two-to-four family residences erected on
them, and at least 66.32 % and 60.49 % (by Cut-off Date Loan Balance) of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are secured by
real property with a detached one-family residence erected on them.
(33) The Credit Limits on the Mortgage Loans range between approximately
$ 7,500.00 and $ 200,000.00 and $ 7,500.00 and $ 2,500,000.00 with an average
of approximately $ 40,352.59 and $ 99,883.86 with respect to the Mortgage Loans
in Loan Group 1 and Loan Group 2, respectively. As of the Cut-off Date, no
Mortgage Loan had a principal balance in excess of approximately $ 200,000.00
and $ 2,000,000.00 and the average principal balance of the Mortgage Loans is
equal to approximately $ 35,526.58 and $ 85,011.78 with respect to the Mortgage
Loans in Loan Group 1 and Loan Group 2, respectively.
(34) Approximately 0.00% and 100.00% of the Mortgage Loans of each Loan
Group, by aggregate principal balance as of the Cut-off Date for the Mortgage
Loans, are secured by first and second liens, respectively.
(35) As of the Closing Date, no more than 24.54 % and 8.96 % of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate
principal balance, were appraised electronically.
(40) As of the Cut-off Date (based on the drawn balances), the Mortgage
Loans had a weighted average Combined Loan-to-Value Ratio of 87.95 % and 87.45
%; a range of Combined Loan-to-Value Ratios between 16.30 % and 100.00% and
18.16 % and 100.00%; a percentage of primary residences of 100.00% and 87.24 %;
a weighted average FICO score of 667.75 and 687.30 ; a range of FICO scores
between 569 and 812 and 518 and 830 ; a Weighted Average Net Loan Rate of
10.887 % and 10.128 %; a range of net Loan Rates between 3.490 % and 15.875 %
and 3.490 % and 15.500 %; a weighted average original stated term to maturity
of 300.00 and 300.01 months; a range of original term to maturity between 240
and 360 months and 120 and 360 months; a range of remaining term to maturity
between 221 and 360 months and 83 and 360 months; an average drawn balance of $
35,526.58 and $ 85,011.78 ; an average utilization ratio of 90.40 % and 90.22
%; and 52.49 % and 76.24 % of the Mortgage Loans have their respective
Mortgaged Properties located in the top five states, measured by aggregate
drawn balances, all with respect to the Mortgage Loans in Loan Group 1 and Loan
Group 2, respectively.
4
