EXHIBIT 4
EXECUTION COPY
XXXXXX XXXXXXX ABS CAPITAL I INC.,
Depositor,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer, Securities Administrator and Custodian,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
HOMEQ SERVICING CORPORATION,
Servicer,
DECISION ONE MORTGAGE COMPANY LLC,
Responsible Party,
NC CAPITAL CORPORATION,
Responsible Party,
ACCREDITED HOME LENDERS, INC.,
Responsible Party,
WMC MORTGAGE CORP.,
Responsible Party,
LASALLE BANK NATIONAL ASSOCIATION
Custodian,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
---------------------------
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2005
---------------------------
XXXXXX XXXXXXX ABS CAPITAL I INC. TRUST 2005-HE3
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-HE3
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03 Representations and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the
Mortgage Loans...............................................
Section 2.04 Execution and Delivery of Certificates.......................
Section 2.05 REMIC Matters................................................
Section 2.06 Representations and Warranties of the Depositor..............
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans..........................
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers.................................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicers...................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee......................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee......................................................
Section 3.07 Collection of Certain Mortgage Loan Payments.................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts..............................................
Section 3.10 Collection Accounts..........................................
Section 3.11 Withdrawals from the Collection Accounts.....................
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account.........................................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage........................................
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption Agreements....
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans...........................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Master Servicer.................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements..............................
Section 3.24 Master Servicer to Act as Servicer...........................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act.....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.......
Section 4.05 Allocation of Applied Realized Loss Amounts..................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.....................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers....
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.......
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others...................................................
Section 6.04 Limitation on Resignation of a Servicer......................
Section 6.05 Additional Indemnification by the Servicers; Third Party
Claims.......................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Master Servicer to Act; Appointment of Successor.............
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee and the Custodian......
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans........
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's Fees and Expenses..................................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Classification of the Excess Reserve Fund Account and
the Interest Rate Cap Agreements.............................
Section 8.14 Custodial Responsibilities...................................
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Countrywide's Obligations....................................
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance....................................................
Section 9.03 Representations and Warranties of the Master Servicer........
Section 9.04 Master Servicer Events of Default............................
Section 9.05 Waiver of Default............................................
Section 9.06 Successor to the Master Servicer.............................
Section 9.07 Compensation of the Master Servicer..........................
Section 9.08 Merger or Consolidation......................................
Section 9.09 Resignation of the Master Servicer...........................
Section 9.10 Assignment or Delegation of Duties by the Master Servicer....
Section 9.11 Limitation on Liability of the Master Servicer...............
Section 9.12 Indemnification; Third Party Claims..........................
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator...........................
Section 10.02 Certain Matters Affecting the Securities Administrator.......
Section 10.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans...............................................
Section 10.04 Securities Administrator May Own Certificates................
Section 10.05 Securities Administrator's Fees and Expenses.................
Section 10.06 Eligibility Requirements for Securities Administrator........
Section 10.07 Resignation and Removal of Securities Administrator..........
Section 10.08 Successor Securities Administrator...........................
Section 10.09 Merger or Consolidation of Securities Administrator..........
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator................................................
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage
Loans........................................................
Section 11.02 Final Distribution on the Certificates.......................
Section 11.03 Additional Termination Requirements..........................
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment....................................................
Section 12.02 Recordation of Agreement; Counterparts.......................
Section 12.03 Governing Law................................................
Section 12.04 Intention of Parties.........................................
Section 12.05 Notices......................................................
Section 12.06 Severability of Provisions...................................
Section 12.07 Assignment; Sales; Advance Facilities........................
Section 12.08 Limitation on Rights of Certificateholders...................
Section 12.09 Inspection and Audit Rights..................................
Section 12.10 Certificates Nonassessable and Fully Paid....................
Section 12.11 Rule of Construction.........................................
Section 12.12 Waiver of Jury Trial.........................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Countrywide Home Loans
Servicing LP, as Servicer
Schedule III Representations and Warranties of HomEq Servicing Corporation,
as Servicer
Schedule IV Representations and Warranties of Xxxxxx Xxxxxxx ABS Capital I
Inc. as to the Mortgage Loans
Schedule V Representations and Warranties of WMC as to the WMC Mortgage
Loans
Schedule VI Representations and Warranties of NC Capital as to the NC
Capital Mortgage Loans
Schedule VII Representations and Warranties of Accredited as to the
Accredited Mortgage Loans
Schedule VIII Representations and Warranties of Decision One, as to the
Decision One Mortgage Loans
Schedule IX Representations and Warranties of Xxxxx Fargo, as Custodian
Schedule X Representations and Warranties of LaSalle, as Custodian
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee and Custodians
Exhibit F Form of Document Certification and Exception Report of Trustee
and Custodians
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Certification to be provided by the Trustee to Depositor
Exhibit N Form of Certification to be provided by the applicable Servicer
to Depositor
Exhibit O Decision One Purchase Agreement
Exhibit P NC Capital Purchase Agreement
Exhibit Q Accredited Purchase Agreement
Exhibit R WMC Purchase Agreement
Exhibit S Fremont Agreements
Exhibit T Form of Servicer Power of Attorney
Exhibit U Xxxxx Fargo Forms
THIS POOLING AND SERVICING AGREEMENT, dated as of July 1, 2005,
among XXXXXX XXXXXXX ABS CAPITAL I INC., a Delaware corporation (the
"Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as master servicer (in such capacity, the "Master Servicer"),
securities administrator (in such capacity, the "Securities Administrator") and
custodian (in such capacity, "Xxxxx Fargo"), COUNTRYWIDE HOME LOANS SERVICING
LP, a Texas limited partnership ("Countrywide"), HOMEQ SERVICING CORPORATION, a
New Jersey corporation ("HomEq", and together with Countrywide, the
"Servicers"), WMC MORTGAGE CORP., a California corporation ("WMC"), NC CAPITAL
CORPORATION, a California corporation ("NC Capital"), ACCREDITED HOME LENDERS,
INC., a California corporation ("Accredited"), DECISION ONE MORTGAGE COMPANY
LLC, a California limited liability company ("Decision One"), LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, as custodian ("LaSalle"
and, together with Xxxxx Fargo, the "Custodians"), and DEUTSCHE BANK NATIONAL
TRUST COMPANY, a national banking association, as trustee (the "Trustee").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator on behalf of the Trust shall elect that
two segregated asset pools within the Trust Fund be treated for federal income
tax purposes as comprising two REMICs (each, a "REMIC" or, in the alternative,
the "Lower Tier REMIC" and the "Upper Tier REMIC", respectively). Each Class of
Certificates (other than the Class P and Class R Certificates), other than the
right of each Class of LIBOR Certificates to receive Basis Risk CarryForward
Amounts and the right of the Class X Certificates to receive payments from the
Interest Rate Cap Agreements, represents ownership of a regular interest in the
Upper Tier REMIC for purposes of the REMIC Provisions. The Class R Certificate
represents ownership of the sole class of residual interest in each of the Lower
Tier REMIC and the Upper Tier REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date. The latest
possible maturity date for each Certificate is the latest date referenced in
Section 2.05. The Upper Tier REMIC shall hold as assets the several classes of
uncertificated Lower Tier Regular Interests, set out below. Each such Lower Tier
Regular Interest is hereby designated as a regular interest in the Lower Tier
REMIC. The Class LT-A-1ss, Class LT-A-1mz, Class LT-A-2a, Class LT-A-2b, Class
LT-A-2c, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5,
Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class LT-B-3 Interests are hereby
designated the LT Accretion Directed Classes (the "LT Accretion Directed
Classes"). The Class P Certificates represent beneficial ownership of the
Prepayment Charges, each Class of LIBOR Certificates represents beneficial
ownership of a regular interest in the Upper Tier REMIC and the right to receive
Basis Risk CarryForward Amounts and the Class X Certificates represent
beneficial ownership of a regular interest in the Upper Tier REMIC, the Excess
Reserve Fund Account and the Interest Rate Cap Agreements, which portions of the
Trust Fund shall be treated as a grantor trust.
Corresponding
Lower Tier Lower Tier Initial Lower Tier Upper Tier REMIC
Class Designation Interest Rate Principal Amount Class
------------------------ ------------------- ----------------------------------------- --------------------
Class LT-A-1ss (1) 1/2 initial Corresponding Upper Tier A-1ss
REMIC Class initial Class Certificate
Balance
Class LT-A-1mz (1) 1/2 initial Corresponding Upper Tier A-1mz
REMIC Class initial Class Certificate
Balance
Class LT-A-2a (1) 1/2 initial Corresponding Upper Tier A-2a
REMIC Class initial Class Certificate
Balance
Class LT-A-2b (1) 1/2 initial Corresponding Upper Tier A-2b
REMIC Class initial Class Certificate
Balance
Class LT-A-2c (1) 1/2 initial Corresponding Upper Tier A-2c
REMIC Class initial Class Certificate
Balance
Class LT-M-1 (1) 1/2 initial Corresponding Upper Tier M-1
REMIC Class initial Class Certificate
Balance
Class LT-M-2 (1) 1/2 initial Corresponding Upper Tier M-2
REMIC Class initial Class Certificate
Balance
Class LT-M-3 (1) 1/2 initial Corresponding Upper Tier M-3
REMIC Class initial Class Certificate
Balance
Class LT-M-4 (1) 1/2 initial Corresponding Upper Tier M-4
REMIC Class initial Class Certificate
Balance
Class LT-M-5 (1) 1/2 initial Corresponding Upper Tier M-5
REMIC Class initial Class Certificate
Balance
Class LT-M-6 (1) 1/2 initial Corresponding Upper Tier M-6
REMIC Class initial Class Certificate
Balance
Class LT-B-1 (1) 1/2 initial Corresponding Upper Tier B-1
REMIC Class initial Class Certificate
Balance
Class LT-B-2 (1) 1/2 initial Corresponding Upper Tier B-2
REMIC Class initial Class Certificate
Balance
Class LT-B-3 (1) 1/2 initial Corresponding Upper Tier B-3
REMIC Class initial Class Certificate
Balance
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus
1/2 Subordinated Amount, less
aggregate initial Lower-Tier Principal
Amount of Class LT-Group I and
Class LT-Group II
Class LT-Group I (2) 0.001% aggregate Stated Principal Balance
of Group I Mortgage Loans (4)
Class LT-Group II (3) 0.001% aggregate Stated Principal Balance
of Group II Mortgage Loans
(4)
Class LT-R (5) (5)
------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group I Cap.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group II
Cap.
(4) For all Distribution Dates, the Lower Tier Principal Amount of these Lower
Tier Regular Interests shall be rounded to eight decimal places.
(5) The Class LT-R Interest is the sole class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an interest
rate.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than Prepayment Charges, the Interest Rate Cap
Agreements, the Excess Reserve Fund Account, and the Lower Tier Regular
Interests.
On each Distribution Date, 50% of the increase in the Subordinated
Amount will be payable as a reduction of the Lower Tier Principal Amounts of the
LT-Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Subordinated Amount that is attributable to
a reduction in the Class Certificate Balance of its Corresponding Class) and
will be accrued and added to the Lower Tier Principal Amount of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the Lower Tier
Principal Amount of the Class LT-Accrual Interest may not exceed interest
accruals for such Distribution Date for the Class LT-Accrual Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such Distribution Date,
the excess for such Distribution Date (accumulated with all such excesses for
all prior Distribution Dates) will be added to any increase in the Subordinated
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans and all Subsequent Recoveries allocable to principal shall be
allocated (i) 50% to the Class LT-Accrual Interest, the Class LT-Group I
Interest and the Class LT-Group II Interest (and further allocated among these
Lower Tier Regular Interests in the manner described below) and (ii) 50% to the
LT-Accretion Directed Classes (such principal payments and Subsequent Recoveries
shall be allocated among such LT Accretion Directed Classes in an amount equal
to 50% of the principal amounts allocated to their respective Corresponding
Classes), until paid in full. Notwithstanding the above, principal payments
allocated to the Class X Certificates that result in the reduction in the
Subordinated Amount shall be allocated to the Class LT-Accrual Interest (until
paid in full). Realized Losses shall be applied so that after all distributions
have been made on each Distribution Date (i) the Lower Tier Principal Amount of
each LT-Accretion Directed Class is equal to 50% of the Class Certificate
Balance of its Corresponding Class, and (ii) the Class LT-Accrual Interest, the
Class LT-Group I Interest and the Class LT-Group II Interest (and further
allocated among these Lower Tier Regular Interests in the manner described
below) is equal to 50% of the aggregate Stated Principal Balance of the Mortgage
Loans plus 50% of the Subordinated Amount. Any increase in the Class Certificate
Balance of a Class of LIBOR Certificates as a result of a Subsequent Recovery
shall increase the Lower Tier Principal Amount of the Corresponding Lower Tier
Regular Interest by 50% of such increase and the remaining 50% of such increase
shall increase the Class LT-Accrual Interest, the Class LT-Group I Interest and
the Class LT-Group II Interest (such increase shall be further allocated among
such Lower Tier Regular Interests in the manner described below). As among the
Class LT-Accrual Interest, the Class LT-Group I Interest and the Class LT-Group
II Interest, all payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans, all Subsequent Recoveries and all Realized
Losses, allocable to such Lower Tier Regular Interests and increases in the
Lower-Tier Principal Amount of such Lower Tier Regular Interests as a result of
Subsequent Recoveries shall be allocated (i) to the Class LT-Group I Interest
and the Class LT-Group II Interest, each from the related Loan Group so that
their respective Lower Tier Principal Amounts (computed to at least eight
decimal places) are equal to 0.001% of the aggregate Stated Principal Balance of
the Mortgage Loans in the related Loan Group and (ii) the remainder to the Class
LT-Accrual Interest.
The Upper Tier REMIC shall issue the following classes of Upper Tier
Regular Interests and each such interest, other than the Class UT-R Interest, is
hereby designated as a regular interest in the Upper Tier REMIC.
Upper Tier Interest Initial Upper Tier
Rate and Principal Amount
Corresponding and Corresponding Corresponding
Upper Tier Class Pass-Through Class Certificate Class of
Class Designation Rate Balance Certificates
------------------------ ------------------- ------------------ ----------------
Class A-1ss (1) $ 283,769,000 Class A-1ss(9)
Class A-1mz (2) $ 70,943,000 Class A-1mz(9)
Class A-2a (3) $ 280,000,000 Class A-2a(9)
Class A-2b (4) $ 95,831,000 Class A-2b(9)
Class A-2c (5) $ 69,000,000 Class A-2c(9)
Class M-1 (6) $ 37,976,000 Class M-1(9)
Class M-2 (6) $ 34,384,000 Class M-2(9)
Class M-3 (6) $ 20,527,000 Class M-3(9)
Class M-4 (6) $ 18,475,000 Class M-4(9)
Class M-5 (6) $ 16,935,000 Class M-5(9)
Class M-6 (6) $ 16,935,000 Class M-6(9)
Class B-1 (6) $ 15,396,000 Class B-1(9)
Class B-2 (6) $ 13,343,000 Class B-2(9)
Class B-3 (6) $ 11,290,000 Class B-3(9)
Class X (7) $ 0 (7) Class X(7)
Class UT-R (8) $ 0 (8) Class R
------------
(1) The Class A-1ss Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.2400%, (ii) the Loan Group
I Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.4800%, (ii) the Loan Group I Cap and (iii)
the WAC Cap.
(2) The Class A-1mz Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.2900%, (ii) the Loan Group
I Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.5800%, (ii) the Loan Group I Cap and (iii)
the WAC Cap.
(3) The Class A-2a Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.1000%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.2000%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(4) The Class A-2b Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.2500%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.5000%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(5) The Class A-2c Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.3800%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.7600%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(6) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Interests will bear interest during
each Interest Accrual Period at a per annum rate equal to (a) on or prior
to the Optional Termination Date, the lesser of (i) LIBOR plus 0.4900%,
0.5200%, 0.5300%, 0.6500%, 0.6900%, 0.7400%, 1.3500%, 1.5500% and 1.9000%,
respectively, and (ii) the WAC Cap or (b) after the Optional Termination
Date, the lesser of (i) LIBOR plus 0.7350%, 0.7800%, 0.7950%, 0.9750%,
1.0350%, 1.1100%, 2.0250%, 2.3250% and 2.8500%, respectively, and (ii) the
WAC Cap.
(7) The Class X Interest has an initial principal balance of $41,568,175, but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the principal balances of the Lower Tier Regular Interests as of the first
day of the related Interest Accrual Period. With respect to any Interest
Accrual Period, the Class X Interest shall bear interest at a rate equal
to the excess, if any, of the WAC Cap over the product of (i) 2 and (ii)
the weighted average Lower Tier Interest Rates of the Lower Tier Regular
Interests, where the Lower Tier Interest Rates on each of the Class
LT-Accrual Interest, Class LT-Group I Interest and Class LT-Group II
Interest is subject to a cap equal to zero and each LT Accretion Directed
Class is subject to a cap equal to the Pass-Through Rate on its
Corresponding Class. With respect to any Distribution Date, interest that
so accrues on the notional principal balance of the Class X Interest shall
be deferred in an amount equal to any increase in the Subordinated Amount
on such Distribution Date. Such deferred interest shall not itself bear
interest. The Class X Certificates will represent beneficial ownership of
the Class X Interest, the Interest Rate Cap Agreements, and amounts in the
Excess Reserve Fund Account, subject to the obligation to make payments
from the Excess Reserve Fund Account in respect of Basis Risk CarryForward
Amounts. For federal income tax purposes, the Securities Administrator
will treat a Class X Certificateholder's obligation to make payments from
the Excess Reserve Fund Account as payments made pursuant to an interest
rate cap contract written by the Class X Certificateholders in favor of
each Class of Certificates. Such rights of the Class X Certificateholders
and Certificateholders shall be treated as held in a portion of the Trust
Fund that is treated as a grantor trust under subpart E, Part I of
subchapter J of the Code.
(8) The Class UT-R Interest is the sole class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest rate.
(9) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk CarryForward Amounts. For federal income tax purposes, the
Securities Administrator will treat a Certificateholder's right to receive
payments from the Excess Reserve Fund Account as payments made pursuant to
an interest rate cap contract written by the Class X Certificateholders.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R and the Class X Certificates, will be $25,000 with integral
multiples of $1 in excess thereof. The minimum denomination for the Class P and
the Class X Certificates will each be a 1% Percentage Interest in such Class.
The Class R Certificate will represent a 100% Percentage Interest in such Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates............ All Classes of Certificates other than
the Physical Certificates.
Class A Certificates............... Class A-1ss, Class A-1mz, Class A-2a,
Class A-2b and Class A-2c Certificates.
Delay Certificates................. None.
ERISA-Restricted Certificates...... Class R Certificates, Class P
Certificates and Class X Certificates;
any certificate with a rating below the
lowest applicable permitted rating under
the Underwriters' Exemption.
LIBOR Certificates................. Class A and Subordinated Certificates.
Non-Delay Certificates............. Class A, Class X and Subordinated
Certificates.
Offered Certificates............... All Classes of Certificates other than
the Private Certificates.
Physical Certificates.............. Class P, Class X and Class R
Certificates.
Private Certificates............... Class P, Class X and Class R
Certificates.
Rating Agencies.................... Fitch, Xxxxx'x and Standard & Poor's.
Regular Certificates............... All Classes of Certificates other than
the Class P and Class R Certificates.
Residual Certificates.............. Class R Certificates.
Subordinated Certificates.......... Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3 Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Accounts, the Distribution Account,
any Escrow Account or the Excess Reserve Fund Account. Each Account shall be an
Eligible Account.
Accredited: Accredited Home Lenders, Inc., a California corporation,
and its successors in interest.
Accredited Mortgage Loans: The Mortgage Loans purchased by the
Purchaser pursuant to the Accredited Purchase Agreement for which Accredited is
identified as Responsible Party in the Mortgage Loan Schedule.
Accredited Purchase Agreement: The Third Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of February 1, 2004,
as amended by Amendment No. 1, dated as of August 2, 2004, Amendment No. 2,
dated as of July 2, 2004, Amendment No. 3, dated as of February 15, 2005, and
Amendment No. 4, dated as of April 15, 2005, each by and between Accredited and
the Purchaser, a copy of which (including all such amendments) is attached
hereto as Exhibit Q.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Due Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 12.07.
Advancing Person: The Person to whom any Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 12.07.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in each Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Master Servicer (x) the sum of (i)
all scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicers on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by the Servicers
during the related Prepayment Period (in each case, net of unreimbursed expenses
incurred in connection with a liquidation or foreclosure and unreimbursed
Advances, if any); (iii) all partial or full prepayments on the Mortgage Loans
received by the Servicers during the related Prepayment Period together with all
Compensating Interest, if applicable, thereon (excluding any Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to the
substitutions of Mortgage Loans that occur during the month in which such
Distribution Date occurs; (v) amounts received with respect to such Distribution
Date as the Repurchase Price in respect of a Mortgage Loan repurchased by the
Depositor or any of the Originators, as applicable, with respect to such
Distribution Date; (vi) the proceeds received with respect to the termination of
the Trust Fund pursuant to clause (a) of Section 11.01; and (vii) the Closing
Date Deposit Amount; reduced by (y) amounts in reimbursement for Advances
previously made with respect to the Mortgage Loans and other amounts as to which
the Servicers, the Depositor, the Trustee, the Securities Administrator, the
Master Servicer or the Custodians are entitled to be paid or reimbursed pursuant
to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the amount of
interest such Class of Certificates would otherwise be entitled to receive on
such Distribution Date had such Pass-Through Rate not been subject to any Loan
Group Cap or WAC Cap (that is, had such rate been calculated as the sum of LIBOR
and the applicable Pass-Through Margin on such Class of Certificates for such
Distribution Date and the resulting amount being reduced by any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls allocated to such Class)
over (ii) the amount of interest received on such Distribution Date such Class
of Certificates at, with respect to each Class of Group I Class A Certificates,
the lesser of the Loan Group I Cap or the WAC Cap, with respect to each Class of
Group II Class A Certificates, the lesser of the Loan Group II Cap or the WAC
Cap, and with respect to each other Class of LIBOR Certificates, the WAC Cap, as
applicable, for such Distribution Date and (B) the Basis Risk CarryForward
Amount for such Class of Certificates for all previous Distribution Dates not
previously paid, together with interest thereon at a rate equal to the sum of
LIBOR and the applicable Pass-Through Margin for such Class of Certificates for
such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of New
York, California, Texas, Maryland, Minnesota, New Jersey or Delaware or the
Commonwealth of Pennsylvania, (b) a State in which any Servicer's servicing
operations are located, or (c) the State in which the Trustee's operations are
located, are authorized or obligated by law or executive order to be closed.
Cap Provider: Xxxxxx Xxxxxxx Capital Services, Inc., a Delaware
corporation, and its successors in interest.
Certificate: Any one of the Certificates executed by the Securities
Administrator in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P or Class R Certificates, at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Certificates, reduced by any Applied Realized Loss Amounts allocated to
such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of the Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date). The
Class X, Class P and Class R Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Securities Administrator is entitled to
rely conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.
Certification: As defined in Section 8.12.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or the
Group II Class A Certificates, as applicable.
Class A Certificates: The Group I Class A Certificates and the Group
II Class A Certificates.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 55.80% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $5,131,861.
Class A-1ss Certificates: All Certificates bearing the class
designation of "Class A-1ss".
Class A-1mz Certificates: All Certificates bearing the class
designation of "Class A-1mz".
Class A-2a Certificates: All Certificates bearing the class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the class
designation of "Class A-2b Certificates".
Class A-2c Certificates: All Certificates bearing the class
designation of "Class A-2c".
Class B Cap Agreement: The interest rate cap agreement, dated July
21, 2005, between Xxxxxx Xxxxxxx Capital Services Inc. and the Securities
Administrator, relating to the Class B Certificates.
Class B Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 87.10% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $5,131,861.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), and (I) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 89.70% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$5,131,861.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 91.90% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $5,131,861.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class M Cap Agreement: The interest rate cap agreement, dated July
21, 2005, between Xxxxxx Xxxxxxx Capital Services Inc. and the Securities
Administrator, relating to the Class M Certificates.
Class M Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M Enhancement Percentage: For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B Certificates (other than the
Class M-1 Certificates) and (ii) the Subordinated Amount (in each case after
taking into account the allocation of the related Principal Distribution Amount
for such Distribution Date) by (y) the aggregate Stated Principal Balance of the
Mortgage Loans for that Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 63.20%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $5,131,861.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 69.90% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$5,131,861.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 73.90% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $5,131,861.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 77.50% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$5,131,861.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 80.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $5,131,861.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 84.10% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$5,131,861.
Class P Certificates: All Certificates bearing the class designation
of "Class P".
Class R Certificates: All Certificates bearing the class designation
of "Class R".
Class X Certificates: All Certificates bearing the class designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class X Interest which is distributable as a
Subordination Reduction Amount, minus (iii) any amounts paid as a Basis Risk
Payment.
Class X Interest: The Upper Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement and
the related footnote thereto.
Closing Date: July 21, 2005.
Closing Date Deposit Amount: $67.38 (all of which is allocable to
principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $136.09 of the Closing Date Deposit Amount shall be attributable
to the Group I Mortgage Loans and $203.47 of the Closing Date Deposit Amount
shall be attributable to the Group II Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to any
Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum
of (i) the outstanding principal balance of the Second Lien Mortgage Loan and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value as determined pursuant to the Underwriting Guidelines of the related
Mortgaged Property as of the origination of the Second Lien Mortgage Loan.
Compensating Interest: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for such Distribution Date, with
respect to voluntary Principal Prepayments in Full (excluding any payments made
upon liquidation of the Mortgage Loan) (or, in the case of HomEq, the amount by
which such Prepayment Interest Shortfall exceeds all Prepayment Interest
Excesses for such Distribution Date) and (b) the amount of the Servicing Fee
payable to the applicable Servicer for such Distribution Date.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan which contains a provision whereby the Mortgagor is permitted to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: With respect to the Securities
Administrator, the principal office of the Securities Administrator at Sixth
Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate
Trust, MSM 2005-HE3, or such other address as the Securities Administrator may
designate from time to time by notice to the Certificateholders. The designated
office of the Trustee in the State of California at which at any particular time
its corporate trust business with respect to this Agreement is administered,
which office at the date of the execution of this Agreement is located at 0000
Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attn: Trust
Administration-MS05H3, facsimile no. (000) 000-0000 and which is the address to
which notices to and correspondence with the Trustee should be directed.
Corresponding Class: The class of interests in either REMIC created
under this Agreement that corresponds to the class of interests in the other
such REMIC or to a Class of Certificates in the manner set out below:
Corresponding Lower Tier Corresponding Upper Tier Corresponding Class
Class Designation Regular Interest of Certificates
--------------------------- -------------------------- -------------------
Class LT-A-1ss Class A-1ss Class A-1ss
Class LT-A-1mz Class A-1mz Class A-1mz
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-2c Class A-2c Class A-2c
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
N/A Class X Class X
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which such Distribution Date occurs and
the denominator of which is the Cut-off Date Pool Principal Balance of the
Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period divided by
(y) the Cut-off Date Pool Principal Balance exceeds the applicable cumulative
loss percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
------------------------------------ --------------------------------------------------------
August 2007 through July 2008 1.500% for the first month, plus an additional 1/12th of
1.50% for each month thereafter (e.g., 2.250% in
February 2008)
August 2008 through July 2009 3.000% for the first month, plus an additional 1/12th of
1.50% for each month thereafter (e.g., 3.750% in
February 2009)
August 2009 through July 2010 4.500% for the first month, plus an additional 1/12th of
1.50% for each month thereafter (e.g., 5.250% in
February 2010)
August 2010 through July 2011 6.000% for the first month, plus an additional 1/12th of
0.75% for each month thereafter (e.g., 6.375% in
February 2011)
August 2011 and thereafter 6.750%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee or the applicable Custodian, as applicable, consisting
of items (i) - (viii) as listed on Exhibit K hereto.
Custodian: Xxxxx Fargo and XxXxxxx, and their respective successors
in interest. When the term "Custodian" is used in this Agreement in connection
with custodial responsibilities with respect to the Mortgage Loans, "Custodian"
shall mean the Person identified as the Custodian of such Mortgage Loan on the
Mortgage Loan Schedule.
Cut-off Date: July 1, 2005.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date plus the portion of the
Closing Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date, whether or not
received).
Data Tape Information: The information provided by the Originators
as of the Cut-off Date to the Depositor or the Purchaser setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating
whether the Mortgaged Property is owner occupied; (6) the type of Mortgaged
Property; (7) the first date on which the Scheduled Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (8) the "paid through date" based on payments received
from the related Mortgagor; (9) the original principal amount of the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate
Mortgage Loan); (12) a code indicating the purpose of the loan (i.e., purchase,
rate and term refinance, equity take out refinance); (13) a code indicating the
documentation style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Originator of such Mortgage
Loan; (23) with respect to each First Lien Mortgage Loan, the LTV at
origination, and with respect to each Second Lien Mortgage Loan, the CLTV at
origination; and (24) if such Mortgage Loan is covered by a primary mortgage
insurance policy or a lender-paid primary mortgage insurance policy, the primary
mortgage insurance rate. With respect to the Mortgage Loans in the aggregate,
the Data Tape Information shall set forth the following information, as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Decision One: Decision One Mortgage Company LLC, a California
limited liability company, and its successors in interest.
Decision One Mortgage Loans: The Mortgage Loans purchased by the
Purchaser pursuant to the Decision One Purchase Agreement for which Decision One
is identified as Responsible Party on the Mortgage Loan Schedule.
Decision One Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement dated as of October 1, 2004, by and between Decision One
and the Purchaser, a copy of which (including all such amendments) is attached
hereto as Exhibit O.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Trigger Event: With respect to any Distribution Date, a
Delinquency Trigger Event exists if the quotient (expressed as a percentage) of
(x) the rolling three month average of the aggregate Stated Principal Balance of
Mortgage Loans that are 60 days or more Delinquent (including Mortgage Loans in
foreclosure and Mortgage Loans related to REO Property) and (y) (1) until the
aggregate Class Certificate Balance of the Class A Certificates have been
reduced to zero, the aggregate Stated Principal Balance of the Mortgage Loans,
as of the last day of the related Due Period, equals or exceeds 36.20% of the
prior period's Senior Enhancement Percentage and (2) after the aggregate Class
Certificate Balance of the Class A Certificates have been reduced to zero, the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, equals or exceeds 43.50% of the prior period's Class M
Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Xxxxxx Xxxxxxx ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee and the Securities Administrator, that (a) is incorporated
under the laws of the United States of America or any State thereof, (b) is
subject to supervision and examination by federal or state banking authorities
and (c) has outstanding unsecured commercial paper or other short-term unsecured
debt obligations that are rated "P-1" by Xxxxx'x, "F1+" by Fitch and "A-1" by
Standard & Poor's (to the extent they are Rating Agencies hereunder).
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the 18th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Distribution Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Master Servicer pursuant to Section 3.07(d) in the name of the
Securities Administrator as paying agent for the benefit of the Trustee and the
Certificateholders and designated "Xxxxx Fargo Bank, N.A. as paying agent in
trust for registered holders of Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates, Series 2005-HE3." Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if such
day is not a Business Day, the next succeeding Business Day, commencing in
August 2005.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated "A-1+" by Standard & Poor's,
"F-1" by Fitch and "P-1" by Xxxxx'x (to the extent they are Rating Agencies
hereunder) (or a comparable rating if another Rating Agency is specified by the
Depositor by written notice to each Servicer) at the time any amounts are held
on deposit therein, (ii) an account or accounts the deposits in which are fully
insured by the FDIC, (iii) a trust account or accounts maintained with a federal
or state chartered depository institution or trust company acting in its
fiduciary capacity or (iv) any other account acceptable to each Rating Agency as
specified in writing. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the
Securities Administrator.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
XXXXX-Xxxxxxxxxx Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Sections 3.07(b) and
3.07(c) in the name of the Securities Administrator as paying agent for the
benefit of the Regular Certificateholders and designated "Xxxxx Fargo Bank, N.A.
as paying agent in trust for registered holders of Xxxxxx Xxxxxxx ABS Capital I
Inc. Trust 2005-HE3, Mortgage Pass-Through Certificates, Series 2005-HE3." Funds
in the Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: As defined in Section 8.12(a).
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate equal
to the sum of the Servicing Fee Rate, the Master Servicing Fee Rate and any
lender-paid primary mortgage insurance fee rate, if applicable.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Master Servicing Fee and any lender-paid primary mortgage insurance
fee, if applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the applicable Responsible Party, Fremont or the Depositor, as applicable, as
contemplated by this Agreement or the Fremont Agreement, as applicable), a
determination made by the applicable Servicer that all Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments or recoveries
which the applicable Servicer, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. Each Servicer
shall maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
Month of Final
Scheduled
Distribution Date
---------------------
Class A-1ss Certificates.................................. July 2035
Class A-1mz Certificates.................................. July 2035
Class A-2a Certificates................................... July 2035
Class A-2b Certificates................................... July 2035
Class A-2c Certificates................................... July 2035
Class M-1 Certificates.................................... July 2035
Class M-2 Certificates.................................... July 2035
Class M-3 Certificates.................................... July 2035
Class M-4 Certificates.................................... July 2035
Class M-5 Certificates.................................... July 2035
Class M-6 Certificates.................................... July 2035
Class B-1 Certificates.................................... July 2035
Class B-2 Certificates.................................... July 2035
Class B-3 Certificates.................................... July 2035
Class X Certificates...................................... July 2035
Class P Certificates...................................... July 2035
Class R Certificates...................................... July 2035
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 12.05(b) the address for notices to Fitch shall be Fitch, Inc., Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - Xxxxxx
Xxxxxxx ABS Capital I Inc. Trust 2005-HE3, or such other address as Fitch may
hereafter furnish to the Depositor, the Trustee and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Fremont Agreements: The Fremont Purchase Agreement and the Fremont
Assignment Agreement, each of which are attached hereto as Exhibit S.
Fremont Assignment Agreement: The Assignment and Recognition
Agreement, dated as of the Closing Date, among the Purchaser, the Depositor and
Fremont.
Fremont Mortgage Loans: The Mortgage Loans purchased by the
Purchaser pursuant to the Fremont Purchase Agreement for which Fremont is
identified as Originator on the Mortgage Loan Schedule.
Fremont Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005, by and between Fremont and the
Purchaser, solely insofar as such agreement relates to the Fremont Mortgage
Loans.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Class A Cap Agreement: The interest rate cap agreement,
dated July 21, 2005 between Xxxxxx Xxxxxxx Capital Services Inc. and the
Securities Administrator, relating to the Group I Class A Certificates.
Group I Class A Certificates: The Class A-1ss and Class A-1mz
Certificates.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Cap Agreement: The interest rate cap agreement,
dated July 21, 2005 between Xxxxxx Xxxxxxx Capital Services Inc. and the
Securities Administrator, relating to the Group II Class A Certificates.
Group II Class A Certificates: The Class A-2a, Class A-2b and Class
A-2c Certificates.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
HomEq: HomEq Servicing Corporation, a New Jersey corporation, and
its successors in interest.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs and
ending on the day immediately preceding the current Distribution Date (or, in
the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date). For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Cap Agreements: The Group I Class A Cap Agreement, the
Group II Class A Cap Agreement, the Class M Cap Agreement and the Class B Cap
Agreement.
Interest Rate Cap Payment: (a) With respect to the Group I Class A
Certificates and the first 26 Distribution Dates, the amount, if any, equal to
the product, determined on an "actual/360" basis, of (i) the excess, if any, of
the lesser of (A) the one-month LIBOR rate (determined in accordance with the
related Interest Rate Cap Agreement) as of the related reset date under the
Group I Class A Cap Agreement and (B) the applicable cap ceiling rate set forth
on Schedule A to such Interest Rate Cap Agreement for such Distribution Date
over the applicable cap strike rate set forth on Schedule A to such Interest
Rate Cap Agreement for such Distribution Date, (ii) the applicable Group I Class
A notional amount set forth on Schedule A to the Group I Class A Cap Agreement
for such Distribution Date and (iii) the multiplier set forth on Schedule A to
such Interest Rate Cap Agreement; (b) with respect to the Group II Class A
Certificates and the first 26 Distribution Dates, the amount, if any, equal to
the product, determined on an "actual/360" basis, of (i) the excess, if any, of
the lesser of (A) the one-month LIBOR rate (determined in accordance with the
related Interest Rate Cap Agreement) as of the related reset date under the
Group II Class A Cap Agreement and (B) the applicable cap ceiling rate set forth
on Schedule A to such Interest Rate Cap Agreement for such Distribution Date
over the applicable cap strike rate set forth on Schedule A to such Interest
Rate Cap Agreement for such Distribution Date, (ii) the applicable Group II
Class A notional amount set forth on Schedule A to the Group II Class A Cap
Agreement for such Distribution Date and (iii) the multiplier set forth on
Schedule A to such Interest Rate Cap Agreement; (c) with respect to the Class M
Certificates and the first 33 Distribution Dates, the amount, if any, equal to
the product, determined on an "actual/360" basis, of (i) the excess, if any, of
the lesser of (A) the one-month LIBOR rate (determined in accordance with the
related Interest Rate Cap Agreement) as of the related reset date under the
Class M Cap Agreement and (B) the applicable cap ceiling rate set forth on
Schedule A to such Interest Rate Cap Agreement for such Distribution Date over
the applicable cap strike rate set forth on Schedule A to such Interest Rate Cap
Agreement for such Distribution Date, (ii) the applicable Class M notional
amount set forth on Schedule A to the Class M Cap Agreement for such
Distribution Date and (iii) the multiplier set forth on Schedule A to such
Interest Rate Cap Agreement; and (d) with respect to the Class B Certificates
and the first 33 Distribution Dates, the amount, if any, equal to the product,
determined on an "actual/360" basis, of (i) the excess, if any, of the lesser of
(A) the one-month LIBOR rate (determined in accordance with the related Interest
Rate Cap Agreement) as of the related reset date under the Class B Cap Agreement
and (B) the applicable cap ceiling rate set forth on Schedule A to such Interest
Rate Cap Agreement for such Distribution Date over the applicable cap strike
rate set forth on Schedule A to such Interest Rate Cap Agreement for such
Distribution Date, (ii) the applicable Class B notional amount set forth on
Schedule A to the Class B Cap Agreement for such Distribution Date and (iii) the
multiplier set forth on Schedule A to such Interest Rate Cap Agreement.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, that portion of Available Funds
attributable to interest relating to Mortgage Loans in that Loan Group.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
LaSalle Mortgage Loans: The Mortgage Loans for which XxXxxxx is
identified as the Custodian on the Mortgage Loan Schedule.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Securities Administrator on the related
LIBOR Determination Date on the basis of the offered rate for one-month U.S.
dollar deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on such date; provided that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the rates at which one-month U.S. dollar deposits are offered by the Reference
Banks at approximately 11:00 a.m. (London time) on such date to prime banks in
the London interbank market. In such event, the Securities Administrator shall
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than two quotations
are provided as requested, the rate for that date will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by the Securities
Administrator (after consultation with the Depositor), at approximately 11:00
a.m. (New York City time) on such date for one-month U.S. dollar loans to
leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of the Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which either (a) was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the applicable Servicer has certified to the Securities
Administrator that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property, or (b) is a Second Lien Mortgage Loan (1) that
is delinquent 180 days or longer, (2) for which the related first lien mortgage
loan is not a Mortgage Loan, and (3) as to which the applicable Servicer has
certified to the Securities Administrator that it does not believe there is a
reasonable likelihood that any further net proceeds will be received or
recovered with respect to such Second Lien Mortgage Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans, the Group II Mortgage Loans
or the Group III Mortgage Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Rates then in effect on the beginning of the related Due Period on
the Group I Mortgage Loans and (ii) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days in the Interest Accrual
Period related to such Distribution Date.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Rates then in effect on the beginning of the related Due Period on
the Group II Mortgage Loans and (ii) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the Interest
Accrual Period related to such Distribution Date.
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage
Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier Interest Rate: As described in the Preliminary Statement.
Lower Tier Principal Amount: As described in the Preliminary
Statement.
Lower Tier Regular Interest: Each of the Class LT-A-1ss, Class
LT-A-1mz, Class LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-M-1, Class
LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1,
Class LT-B-2, Class LT-B-3, Class LT-Group I, Class LT-Group II and Class
LT-Accrual Interests as described in the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Master Servicing Fee: As to any Distribution Date, an amount equal
to 1/12th the product of (a) the Master Servicing Fee Rate and (b) the sum of
(i) the aggregate Stated Principal Balance of the Mortgage Loans as of the first
day of the related Interest Accrual Period and (ii) with respect to the
Distribution Date in August 2005 only, the portion of the Closing Date Deposit
Amount allocable to principal.
Master Servicing Fee Rate: With respect to any Mortgage Loan, a per
annum rate equal to 0.015%.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originators have designated or will designate MERS as, and have taken or will
take such action as is necessary to cause MERS to be, the mortgagee of record,
as nominee for the Originators, in accordance with MERS Procedure Manual and (b)
the Originators have designated or will designate the Trustee as the Investor on
the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc., and its successors in
interest. If Xxxxx'x is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05(b), the address for notices to Moody's
shall be Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Trustee and the
Servicers.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto
as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Mortgage Loan number; (2) the city, state
and zip code of the Mortgaged Property; (3) the number and type of residential
units constituting the Mortgaged Property; (4) the current Mortgage Rate; (5)
the current net Mortgage Rate; (6) the current Scheduled Payment; (7) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (8) the
original term to maturity; (9) the scheduled maturity date; (10) the principal
balance of the Mortgage Loan as of the Cut-off Date after deduction of payments
of principal due on or before the Cut-off Date whether or not collected; (11)
with respect to each Adjustable Rate Mortgage Loan, the next Interest Rate
Adjustment Date; (12) with respect to each Adjustable Rate Mortgage Loan, the
lifetime Mortgage Interest Rate Cap; (13) whether the Mortgage Loan is
convertible or not; (14) the Servicing Fee; (15) whether such Mortgage Loan is a
Group I Mortgage Loan or a Group II Mortgage Loan; (16) the applicable
Originator's name, (17) the date such Mortgage Loan was sold by the applicable
Originator to the Purchaser, (18) whether such Mortgage Loan provides for a
Prepayment Charge as well as the term and amount of such Prepayment Charge, if
any; (19) with respect to each First Lien Mortgage Loan, the LTV at origination,
and with respect to each Second Lien Mortgage Loan, the CLTV at origination;
(20) the Servicer's name; (21) the applicable Custodian's name; and (22) the
date on which servicing of the mortgage loan was transferred to the applicable
Servicer.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
NC Capital: NC Capital Corporation, a California corporation, and
its successors in interest.
NC Capital Mortgage Loans: The Mortgage Loans purchased by the
Purchaser pursuant to the NC Capital Purchase Agreement for which NC Capital is
identified as Responsible Party on the Mortgage Loan Schedule.
NC Capital Purchase Agreement: The Second Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of July 1, 2003, as
amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4,
Amendment No. 5 and Amendment No. 6, dated as of October 22, 2003, December 30,
2003, January 29, 2004, July 30, 2004, June 28, 2004 and January 28, 2005,
respectively, each by and between NC Capital and the Purchaser, a copy of which
(including all such amendments) is attached hereto as Exhibit P.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the Compensating Interest payments made with respect
to such Distribution Date.
New Century: New Century Mortgage Corporation, a California
corporation, and its successors in interest.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the applicable Servicer, the Master Servicer or
any successor Master Servicer including the Trustee, as applicable, will not or,
in the case of a proposed P&I Advance, would not be ultimately recoverable from
related late payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, the Master Servicer or
any successor Master Servicer including the Trustee, as applicable, will not or,
in the case of a proposed Servicing Advance, would not be ultimately recoverable
from related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise. The determination by a Servicer that it has made a Nonrecoverable
Servicing Advance or that any proposed Servicing Advances, if made, would
constitute a Nonrecoverable Servicing Advance, shall be evidenced by an
Officer's Certificate delivered to the Securities Administrator and the Master
Servicer.
Notice of Final Distribution: The notice to be provided pursuant to
Section 11.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of any
Servicer with responsibility for the servicing of the Mortgage Loans required to
be serviced by such Servicer and listed on a list delivered to the Trustee and
Securities Administrator pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably acceptable to the
Trustee and/or the Securities Administrator, as applicable (and/or such other
Persons as may be set forth herein), provided that any Opinion of Counsel
relating to (a) qualification of either the Lower Tier REMIC or Upper Tier REMIC
or (b) compliance with the REMIC Provisions, must be (unless otherwise stated in
such Opinion of Counsel) an opinion of counsel who (i) is in fact independent of
such Servicer of the Mortgage Loans or the Master Servicer, (ii) does not have
any material direct or indirect financial interest in such Servicer of the
Mortgage Loans or the Master Servicer or in an affiliate of either and (iii) is
not connected with such Servicer of the Mortgage Loans or the Master Servicer as
an officer, employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
Originators: The Responsible Parties and Fremont.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities Administrator
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the applicable Servicer in respect of any Remittance Date representing
the aggregate of all payments of principal and interest, net of the Servicing
Fee, that were due during the related Due Period on the Mortgage Loans and that
were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1ss Certificates, 0.2400%;
Class A-1mz Certificates, 0.2900%; Class A-2a Certificates, 0.1000%; Class A-2b
Certificates, 0.2500%; Class A-2c Certificates, 0.3800%; Class M-1 Certificates,
0.4900%; Class M-2 Certificates, 0.5200%; Class M-3 Certificates, 0.5300%; Class
M-4 Certificates, 0.6500%; Class M-5 Certificates, 0.6900%; Class M-6
Certificates, 0.7400%; Class B-1 Certificates, 1.3500%; Class B-2 Certificates,
1.5500%; and Class B-3 Certificates, 1.9000%. On the first Distribution Date
after the Optional Termination Date, the Pass-Through Margins shall increase to:
Class A-1ss Certificates, 0.4800%; Class A-1mz Certificates, 0.5800%; Class A-2a
Certificates, 0.2000%; Class A-2b Certificates, 0.5000%; Class A-2c
Certificates, 0.7600%; Class M-1 Certificates, 0.7350%; Class M-2 Certificates,
0.7800%; Class M-3 Certificates, 0.7950%; Class M-4 Certificates, 0.9750%; Class
M-5 Certificates, 1.0350%; Class M-6 Certificates, 1.1100%; Class B-1
Certificates, 2.0250%; Class B-2 Certificates, 2.3250%; and Class B-3
Certificates, 2.8500%.
Pass-Through Rate: For each Class of Certificates and each Lower
Tier Regular Interest, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicers, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by, any Depository Institution and rated
"P-1" by Xxxxx'x, "F1+" by Fitch and "A-1+" by Standard & Poor's (to
the extent they are Rating Agencies hereunder and are so rated by
such Rating Agency);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any State thereof and that are rated by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by each Rating Agency that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor or an Affiliate thereof, that have been
rated "Aaa" by Xxxxx'x, "AAAm" by Standard & Poor's and at least
"AA" by Fitch (to the extent they are Rating Agencies hereunder and
are so rated by such Rating Agency); and
(vii) if previously confirmed in writing to the Securities
Administrator, any other demand, money market or time deposit, or
any other obligation, security or investment, as may be acceptable
to the Rating Agencies as a permitted investment of funds backing
"Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty of such Person or any other U.S.
Person, (vi) an "electing large partnership" within the meaning of Section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause either the Lower Tier REMIC or the Upper
Tier REMIC to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
Freddie Mac, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by any Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date,
any interest collected by HomEq with respect to any Mortgage Loan serviced by
HomEq as to which a Principal Prepayment in Full occurs from the 1st day of the
month through the 15th day of the month in which such Distribution Date occurs
and that represents interest that accrues from the 1st day of such month to the
date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the related Prepayment
Period (in the case of any Mortgage Loan serviced by Countrywide) or during the
portion of the Prepayment Period from and including the 16th day of the month
preceding the month in which such Distribution Date occurs (or from the day
following the Cut-off Date, in the case of the first Distribution Date) through
the last day of such month (in the case of any Mortgage Loan serviced by HomEq),
the subject of a Principal Prepayment which is not accompanied by an amount
equal to one month of interest that would have been due on such Mortgage Loan on
the Due Date in the following month and which was applied by the applicable
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a
date preceding such Due Date an amount equal to the product of (a) the Mortgage
Rate net of the Servicing Fee Rate for such Mortgage Loan, (b) the amount of the
Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the number of
days commencing on the date on which such Principal Prepayment was applied and
ending on the last day of the calendar month in which the related Prepayment
Period begins.
Prepayment Period: With respect to any Distribution Date, either (a)
in the case of any Mortgage Loan serviced by Countrywide, the calendar month
preceding the month in which such Distribution Date occurs, or (b) in the case
of any Mortgage Loan serviced by HomEq, either (i) with respect to any voluntary
Principal Prepayments in Full, the period from and including the 16th day of the
month preceding the month in which such Distribution Date occurs (or, in the
case of the first Distribution Date, from and including the Cut-off Date) to and
including the 15th day of the month in which such Distribution Date occurs, or
(ii) with respect to any voluntary partial Principal Prepayments or any
involuntary Principal Prepayments, the calendar month preceding the month in
which such Distribution Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicers on or
prior to the related Determination Date or advanced by the applicable Servicer
for the related Remittance Date, and all Principal Prepayments received during
the related Prepayment Period; (ii) all Liquidation Proceeds, Condemnation
Proceeds and Insurance Proceeds on the Mortgage Loans allocable to principal
actually collected by the Servicers during the related Prepayment Period; (iii)
the portion of the Repurchase Price allocable to principal with respect to each
Mortgage Loan repurchased during the related Prepayment Period; (iv) all
Substitution Adjustment Amounts allocable to principal with respect to the
substitutions of Mortgage Loans that occur during the month in which such
Distribution Date occurs; (v) with respect to the Distribution Date in August
2005 only, the portion of the Closing Date Deposit Amount allocable to
principal; and (vi) the allocable portion of the proceeds received with respect
to the termination of the Trust Fund pursuant to clause (a) of Section 11.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated July 19,
2005, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the Decision One Purchase
Agreement, the NC Capital Purchase Agreement, the Fremont Purchase Agreement,
the WMC Purchase Agreement and the Accredited Purchase Agreement.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the Mortgage Loans
under each of the Purchase Agreements.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Securities Administrator. References herein to a given rating or rating category
of a Rating Agency shall mean such rating category without giving effect to any
modifiers. For purposes of Section 12.05(b), the addresses for notices to each
Rating Agency shall be the address specified therefor in the definition
corresponding to the name of such Rating Agency, or such other address as either
such Rating Agency may hereafter furnish to the Depositor, the Securities
Administrator and the Servicers.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the applicable Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the second
Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the applicable Servicer of any
REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the applicable Servicer in the name of
the Trustee on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, (a) in the case
of any Mortgage Loan repurchased by the Depositor or a Responsible Party, an
amount equal to the sum of (i) the unpaid principal balance of such Mortgage
Loan as of the date of repurchase, (ii) interest on such unpaid principal
balance of such Mortgage Loan at the Mortgage Rate from the last date through
which interest has been paid and distributed to the Securities Administrator to
the date of repurchase, (iii) all unreimbursed Servicing Advances and (iv) all
costs and expenses incurred by the Trustee arising out of or based upon such
breach, including without limitation, costs and expenses relating to the
Trustee's enforcement of the repurchase obligation of the Depositor or such
Responsible Party hereunder, and (b) in the case of any Mortgage Loan
repurchased by Xxxxxxx, the repurchase price specified in the Fremont
Agreements. In addition to the Repurchase Price, each Responsible Party is
obligated to make certain indemnification payments for material breaches of
representations and warranties as further set forth in Section 2.03(n) in this
Agreement, and Fremont is obligated to make certain indemnification payments for
material breaches of representations and warranties as further set forth in the
Fremont Agreements.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee or the applicable Custodian, as applicable,
substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator, the Master Servicer, any vice president, any assistant
vice president, any assistant secretary, any assistant treasurer, any associate,
or any other officer of the Trustee, the Securities Administrator or the Master
Servicer customarily performing functions similar to those performed by any of
the above designated officers who at such time shall be officers to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject and who shall
have direct responsibility for the administration of this Agreement.
Responsible Parties: Decision One, NC Capital, WMC, Fremont and
Accredited.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association and
if a successor securities administrator is appointed hereunder, such successor.
Securities Administrator Float Period: With respect to the
Distribution Date and the related amounts in the Distribution Account, the
period commencing on the Business Day immediately preceding such Distribution
Date and ending on such Distribution Date.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into account the distribution of the Principal
Distribution Amount for such Distribution Date) by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 44.20%.
Sequential Trigger Event: (a) With respect to any Distribution Date
occurring before August 2007, the circumstances in which the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Prepayment Period divided by the Cut-off Date Pool Principal Balance
equals or exceeds 1.50%, and (b) with respect to any Distribution Date occurring
in or after August 2007, a Trigger Event.
Servicer: Countrywide or HomEq, and if a successor Xxxxxxxx to any
is appointed hereunder, such successor. When the term "Servicer" is used in this
Agreement in connection with the administration of servicing obligations with
respect to any Mortgage Loan, Mortgaged Property, REO Property or Mortgage File,
"Servicer" shall mean the Person identified as the Servicer of such Mortgage
Loan on the Mortgage Loan Schedule.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer in the
performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of a
Mortgaged Property, (ii) any enforcement, administrative or judicial
proceedings, including foreclosures and litigation, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property and (iv) the performance of its
obligations under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing Advances
shall also include any reasonable "out-of-pocket" costs and expenses (including
legal fees) incurred by the applicable Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage in connection with any foreclosure in respect of any Mortgage Loan to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement. None of the Servicers shall be required to make any Nonrecoverable
Servicing Advances.
Servicing Fee: With respect to each Servicer, each Mortgage Loan
serviced by such Servicer and for any calendar month, an amount equal to one
month's interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in Full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the applicable Stated Principal Balance of such Mortgage
Loan as of the first day of such calendar month. Such fee shall be payable
monthly, and shall be pro rated for any portion of a month during which the
Mortgage Loan is serviced by such Servicer under this Agreement. The Servicing
Fee is payable solely from the interest portion (including recoveries with
respect to interest from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds and proceeds received with respect to REO Properties, to the extent
permitted by Section 3.11) of such Scheduled Payment collected by such Servicer,
or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the Trustee or
applicable Custodian in the Custodial File and copies of the Mortgage Loan
Documents set forth in Exhibit K hereto.
Servicing Officer: Any officer of any Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by such Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, two months or more past due (without giving effect to any
grace period), including, without limitation, such Mortgage Loans that are
subject to bankruptcy proceedings, (ii) each Mortgage Loan in foreclosure and
(iii) all REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 4.05% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 8.10% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, subject, until the Class
Certificate Balance of each Class of Offered Certificates has been reduced to
zero, to a minimum amount equal to 0.50% of the Cut-off Date Pool Principal
Balance; provided, however, that if, on any Distribution Date, a Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to the applicable
percentage of the then current aggregate Stated Principal Balance of the
Mortgage Loans until the Distribution Date on which a Trigger Event no longer
exists. When the Class Certificate Balance of each Class of Offered Certificates
has been reduced to zero, the Specified Subordinated Amount will thereafter
equal zero.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., and its successors in interest. If Standard &
Poor's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 12.05(b) the address for notices to Standard & Poor's shall
be Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance Group - Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust 2005-HE3, or such other address as Standard & Poor's may hereafter furnish
to the Depositor, the Trustee and the Servicers.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Securities Administrator
with respect to the related Mortgage Loan representing payments or recoveries of
principal including advances in respect of scheduled payments of principal. For
purposes of any Distribution Date, the Stated Principal Balance of any Mortgage
Loan will give effect to any scheduled payments of principal received by the
related Servicer on or prior to the related Determination Date or advanced by
the related Servicer for the related Remittance Date and any unscheduled
principal payments and other unscheduled principal collections received during
the related Prepayment Period, and the Stated Principal Balance of any Mortgage
Loan that has prepaid in full or has become a Liquidated Mortgage Loan during
the related Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in August 2008 and (b) the Distribution Date following the
Distribution Date on which the aggregate Class Certificate Balances of the Class
A Certificates have been reduced to zero and (ii) the first Distribution Date on
which the Senior Enhancement Percentage (calculated for this purpose only after
taking into account payments of principal on the Mortgage Loans applied to
reduce the Stated Principal Balance of the Mortgage Loans for the applicable
Distribution Date but prior to any allocation of the Principal Distribution
Amount to the Certificates on such Distribution Date) is greater than or equal
to the Senior Specified Enhancement Percentage.
Subordinated Amount: As of any Distribution Date, the excess, if
any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such Distribution Date (after giving effect to
the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by the
applicable Originator for a Deleted Mortgage Loan that satisfies the criteria
set forth in the definition of "Qualified Substitute Mortgage Loan" in the
applicable Purchase Agreement or (ii) substituted by the Depositor for a Deleted
Mortgage Loan, which, if substituted by the Depositor, must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit J, (a) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than, the Stated Principal Balance of
the Deleted Mortgage Loan; (b) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (c)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (d)
have a remaining term to maturity no greater than (and not more than one year
less than that of) the Deleted Mortgage Loan; and (e) comply with each
representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of the Lower Tier REMIC and the Upper Tier
REMIC, respectively, in the manner provided under Treasury Regulations Section
1.860F-4(d) and Treasury Regulations Section 301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicers on or prior to the related Determination Date (other than
Prepayment Interest Excesses) or advanced by the Servicers for the related
Remittance Date (net of Expense Fees) over (ii) the sum of the amounts payable
to the Certificates pursuant to Section 4.02(a)(i) on such Distribution Date.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Accounts, Excess Reserve Fund Account, the Distribution Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the Interest Rate
Cap Agreements; (v) the Fremont Agreements (solely insofar as such agreements
relate to the Fremont Mortgage Loans); (vi) the Closing Date Deposit Amount; and
(vii) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed under footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amount with respect to such Class over (ii) the sum of
(a) all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates, and (b) the amount by which the Class Certificate
Balance of such Class has been increased due to the distribution of any
Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper Tier Regular Interest: As described in the Preliminary
Statement.
Upper Tier REMIC: As described in the Preliminary Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Mortgage Loans
and (ii) a fraction, the numerator of which is 30 and the denominator of which
is the actual number of days in the Interest Accrual Period related to such
Distribution Date.
Xxxxx Fargo Mortgage Loans: Mortgage Loans for which Xxxxx Fargo is
identified as the Custodian on the Mortgage Loan Schedule.
WMC: WMC Mortgage Corp., a California corporation, and its
successors in interest.
WMC Mortgage Loans: The Mortgage Loans purchased by the Purchaser
pursuant to the WMC Mortgage Corp. Purchase Agreement for which WMC Mortgage
Corp. is identified as Responsible Party in the Mortgage Loan Schedule.
WMC Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of April 1, 2004, as amended by Amendment No. 1, dated as of
October 29, 2004, and Amendment No. 2, dated as of February 28, 2005, each by
and between the Purchaser, as purchaser, and WMC, as seller (a copy of which is
attached hereto as Exhibit R).
WMC Underwriting Guidelines: The underwriting guidelines attached to
the WMC Purchase Agreement.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund. On the Closing Date, the Depositor shall pay,
without any right of reimbursement from the Trust, to the Cap Provider the
"Fixed Amount" (as defined in each Interest Rate Cap Agreement) due and payable
to the Cap Provider pursuant to the terms of such Interest Rate Cap Agreement.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to Xxxxx Fargo with
respect to the Xxxxx Fargo Mortgage Loans, to LaSalle with respect to the
LaSalle Mortgage Loans, and to the Trustee with respect to any other Mortgage
Loans, for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and signed
(which may be by facsimile signature) in the name of the last endorsee by
an authorized officer. To the extent that there is no room on the face of
the Mortgage Notes for endorsements, the endorsement may be contained on
an allonge, unless the Trustee is advised in writing by the applicable
Originator (pursuant to the applicable Purchase Agreement) that state law
does not so allow;
(ii) the original of any guaranty executed in connection with the
Mortgage Note;
(iii) (A) with respect to the Mortgage Loans other than the Xxxxx
Fargo and LaSalle Mortgage Loans, the original Mortgage with evidence of
recording thereon or a certified true copy of such Mortgage submitted for
recording. If, in connection with any such Mortgage Loan, the original
Mortgage cannot be delivered with evidence of recording thereon on or
prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Trustee shall notify
the applicable Originator to deliver or cause to be delivered to the
Trustee as required under the applicable Purchase Agreement, a photocopy
of such Mortgage, together with (i) in the case of a delay caused by the
public recording office, an officer's certificate of the applicable
Originator (delivered pursuant to the applicable Purchase Agreement), or
evidence of certification on the face of such photocopy of such mortgage,
or a certificate from an escrow company, a title company or closing
attorney stating that such Mortgage has been dispatched to the appropriate
public recording office for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such public recording
office to be a true and complete copy of the original recorded Mortgage
will be promptly delivered to the Trustee upon receipt thereof by the
applicable Originator; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case
where a Mortgage is lost after recordation in a public recording office, a
copy of such Mortgage certified by such public recording office to be a
true and complete copy of the original recorded Mortgage;
(B) with respect to the Xxxxx Fargo and LaSalle Mortgage Loans, the
original Mortgage with evidence of recording thereon or a certified true
copy of such Mortgage submitted for recording. If, in connection with any
Xxxxx Fargo or LaSalle Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the applicable Originator shall deliver or cause to be
delivered to the applicable Custodian a photocopy of such Mortgage
certified by the applicable Originator to be a true and complete copy of
such Mortgage and shall forward to the applicable Custodian such original
recorded Mortgage within 14 days following the applicable Originator's
receipt of such Mortgage from the applicable public recording office; or
in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank (except with respect to MERS Designated Mortgage Loans);
(vi) (A) with respect to the Mortgage Loans other than the Xxxxx
Fargo and LaSalle Mortgage Loans (except with respect to MERS Designated
Mortgage Loans), the originals of all intervening assignments of Mortgage
(if any) evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage Loan) to
the last endorsee with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the
original recorded assignments of Mortgage, the Trustee shall notify the
applicable Originator, to deliver, as required under the applicable
Purchase Agreement, a photocopy of such intervening assignment, together
with (A) in the case of a delay caused by the public recording office, an
officer's certificate of the applicable Originator, or evidence of
certification on the face of such photocopy of such intervening
assignment, or a certificate from an escrow company, a title company or a
closing attorney stating that such intervening assignment of Mortgage has
been dispatched to the appropriate public recording office for recordation
and that such original recorded intervening assignment of Mortgage or a
copy of such intervening assignment of Mortgage certified by the
appropriate public recording office to be a true and complete copy of the
original recorded intervening assignment of Mortgage will be promptly
delivered to the Trustee upon receipt thereof by the applicable
Originator; or (B) in the case of an intervening assignment where a public
recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified
by such public recording office to be a true and complete copy of the
original recorded intervening assignment;
(B) With respect to the Xxxxx Fargo and LaSalle Mortgage Loans, the
originals of all intervening assignments of Mortgage (if any) evidencing a
complete chain of assignment from the applicable originator to the last
endorsee with evidence of recording thereon or a certified true copy of
such intervening assignments of Mortgage submitted for recording, or if
any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of Mortgage, the applicable
Originator shall deliver or cause to be delivered a photocopy of such
intervening assignment, certified by the applicable Originator to be a
true and complete copy of such intervening assignment and shall forward to
the applicable Custodian such original recorded intervening assignment
within 14 days following the applicable Originator's receipt of such from
the applicable public recording office; or in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment;
(vii) the original mortgagee title insurance policy or attorney's
opinion of title and abstract of title, or, in the event such original
title policy is unavailable, a certified true copy of the related policy
binder or commitment for title certified to be true and complete by the
title insurance company; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The Depositor will use its reasonable efforts to assist the Trustee
and the Servicers in enforcing the obligations of each Responsible Party under
this Agreement and the obligations of Fremont under the Fremont Agreements.
The Depositor shall cause to be delivered to the Trustee or
applicable Custodian, as applicable, the applicable recorded document promptly
upon receipt from the respective recording office but in no event later than 180
days from the Closing Date.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the applicable Servicer shall take all reasonable actions as are necessary at
the expense of the applicable Responsible Party to the extent permitted under
the related Purchase Agreement and otherwise at the expense of the Depositor to
cause the Trust to be shown as the owner of the related Mortgage Loan on the
records of MERS for the purpose of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.
From time to time, the Depositor or the applicable Servicer, as
applicable, shall forward to the Trustee or applicable Custodian, as applicable,
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan in accordance with
the terms of this Agreement upon receipt of such documents. All such mortgage
documents held by the Trustee or applicable Custodian, as applicable, as to each
Mortgage Loan shall constitute the "Custodial File".
No later than thirty (30) Business Days following the later of the
Closing Date and the date of receipt by the applicable Servicer of the complete
recording information for a Mortgage, the applicable Servicer shall promptly
submit or cause to be submitted for recording, at the expense of the applicable
Originator as required pursuant to the related Purchase Agreement and at no
expense to the Trust Fund, the Trustee, the applicable Servicer, or the
Depositor, in the appropriate public office for real property records, each
Assignment of Mortgage referred to in Section 2.01(b)(v). Notwithstanding the
foregoing, however, for administrative convenience and facilitation of servicing
and to reduce closing costs, the Assignments of Mortgage shall not be required
to be completed and submitted for recording with respect to any Mortgage Loan
(i) if the Trustee, the Custodians and each Rating Agency have received an
Opinion of Counsel, satisfactory in form and substance to the Trustee and each
Rating Agency to the effect that the recordation of such Assignments of Mortgage
in any specific jurisdiction is not necessary to protect the Trustee's interest
in the related Mortgage Note, (ii) if such Mortgage Loan is a MERS Designated
Mortgage Loan or (iii) if the Rating Agencies have each notified the Depositor
in writing that not recording any such Assignments of Mortgage would not cause
the initial ratings on any LIBOR Certificates to be downgraded or withdrawn;
provided, however, that no Servicer shall be held responsible or liable for any
loss that occurs because an Assignment of Mortgage was not recorded, but only to
the extent the applicable Servicer does not have prior knowledge of the act or
omission that causes such loss. However, with respect to the Assignments of
Mortgage referred to in clauses (i) and (ii) above, if foreclosure proceedings
occur against a Mortgaged Property, the Depositor shall notify the applicable
Servicer and such Servicer shall record such Assignment of Mortgage at the
expense of the related Originator as required pursuant to the related Purchase
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to "Deutsche Bank National Trust Company, as trustee under the
Pooling and Servicing Agreement dated as of July 1, 2005, Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2005-HE3". In the event that any such Assignment of
Mortgage is lost or returned unrecorded because of a defect therein, the
Depositor shall promptly cause to be delivered a substitute Assignment of
Mortgage to cure such defect and thereafter cause each such assignment to be
duly recorded. If there is such a defect with respect to a Fremont Mortgage
Loan, the Trustee shall take such actions, with the Depositor's consent, to
enforce the rights of the Trust as "Purchaser" under the Fremont Agreements.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee and the applicable Custodian, as applicable, a copy of the Data Tape
Information in an electronic, machine readable medium in a form mutually
acceptable to the Trustee or applicable Custodian, as applicable. Within twenty
(20) Business Days of the Closing Date, the Depositor shall deliver copies of
the complete Mortgage Loan Schedule to the Trustee, each Custodian and each
Servicer, and the Trustee, each Custodian and each Servicer shall promptly
acknowledge receipt thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "XXXXXX XXXXXXX ABS CAPITAL
I INC. TRUST 2005-HE3" and Deutsche Bank National Trust Company is hereby
appointed as Trustee in accordance with the provisions of this Agreement. The
parties hereto acknowledge and agree that it is the policy and intention of the
Trust to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the representations and warranties set
forth in paragraph (43) of Schedule V, paragraph (46) of Schedule VI, paragraph
(50) of Schedule VII, paragraph (yy) of Schedule VIII to this Agreement and
paragraph (aaa) of Schedule IX to this Agreement.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans and the Fremont Agreements)
pursuant to Section 2.01(a). The Securities Administrator on behalf of the Trust
is hereby authorized to enter into the Interest Rate Cap Agreements.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee and the Custodians shall acknowledge, on the Closing Date, receipt by
the Trustee or the applicable Custodian, as applicable, of the documents
identified in the Initial Certification in the form annexed hereto as Exhibit E,
and declares that it holds and will hold such documents and the other documents
delivered to it pursuant to Section 2.01, and that it holds or will hold such
other assets as are included in the Trust Fund, in trust for the exclusive use
and benefit of all present and future Certificateholders. The Trustee and the
Custodians shall maintain possession of the related Mortgage Notes in the State
of California, Utah or Minnesota, unless otherwise permitted by the Rating
Agencies.
In connection with the Closing Date, the Trustee and the Custodians
shall be required to deliver via facsimile (with original to follow the next
Business Day) to the Depositor and the Servicers an Initial Certification prior
to the Closing Date, or, as the Depositor agrees to, on the Closing Date,
certifying receipt of a Mortgage Note and Assignment of Mortgage for each
applicable Mortgage Loan. Neither the Trustee nor the Custodians, shall be
responsible to verify the validity, sufficiency or genuineness of any document
in any Custodial File.
Within 90 days after the Closing Date, the Trustee and the
Custodians shall, for the benefit of the Holders of the Certificates, ascertain
that all documents identified in the Document Certification and Exception Report
in the form attached hereto as Exhibit F are in its possession, and shall
deliver to the Depositor, the Servicers and to the Trustee, if delivered by a
Custodian, a Document Certification and Exception Report, in the form annexed
hereto as Exhibit F, to the effect that, as to each applicable Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as an
exception and not covered by such certification): (i) all documents identified
in the Document Certification and Exception Report and required to be reviewed
by it are in its possession; (ii) such documents have been reviewed by it and
appear regular on their face and relate to such Mortgage Loan; (iii) based on
its examination and only as to the foregoing documents, the information set
forth in items (1), (2) and (7) of the Mortgage Loan Schedule and items (1), (9)
and (17) of the Data Tape Information respecting such Mortgage Loan accurately
reflects the information set forth in the Custodial File; and (iv) each Mortgage
Note has been endorsed as provided in Section 2.01 of this Agreement. Neither
the Trustee nor the Custodians shall be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall, for the
benefit of the Holders of the Certificates, based solely on the list of MERS
Designated Mortgage Loans and screen printouts from the MERS System provided to
the Trustee by each Responsible Party (such to be provided to the Trustee no
later than 45 days from the Closing Date), the Trustee shall confirm, on behalf
of the Trust, that the Trustee is shown as the Investor with respect to each
MERS Designated Mortgage Loan on such screen printouts. If the Trustee is not
shown as the Investor with respect to any MERS Designated Mortgage Loans on such
screen printouts, the Trustee shall promptly notify the related Responsible
Party of such fact and the related Responsible Party shall then either cure such
defect or repurchase such Mortgage Loan in accordance with Section 2.03.
The Trustee and the Custodians shall retain possession and custody
of each applicable Custodial File in accordance with and subject to the terms
and conditions set forth herein. The applicable Servicer shall promptly deliver
to the Trustee or to the applicable Custodian, as applicable, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
Each Responsible Party shall deliver (or the Depositor, as
applicable, shall use reasonable efforts to cause Fremont to deliver) to the
applicable Servicer copies of all trailing documents required to be included in
the Custodial File at the same time the original or certified copies thereof are
delivered to the Trustee or the applicable Custodian, as applicable, including
but not limited to such documents as the title insurance policy and any other
Mortgage Loan documents upon return from the public recording office. Such
documents shall be delivered by the applicable Responsible Party at the
Responsible Party's expense (or the Depositor, as applicable, shall use
reasonable efforts to cause Fremont to deliver such documents at Xxxxxxx's
expense pursuant to the Fremont Agreements) to such Servicer.
Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the Mortgage Loans. (a)
Countrywide hereby makes the representations and warranties set forth in
Schedule II hereto to the Depositor and the Trustee as of the dates set forth in
such Schedule, and HomEq hereby makes the representations and warranties set
forth in Schedule III hereto to the Depositor and the Trustee as of the dates
set forth in such Schedule. Upon discovery by any of the parties hereto of a
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other.
(b) The Depositor hereby makes the representations and warranties
set forth in Schedule IV hereto to the Trustee as of the dates set forth in such
Schedule.
(c) Xxxxx Fargo hereby makes the representations and warranties set
forth in Schedule IX hereto to the Trustee as of the dates set forth in such
Schedule, and LaSalle hereby makes the representations and warranties set forth
in Schedule X hereto to the Trustee as of the dates set forth in such Schedule.
(d) WMC hereby makes the representations and warranties set forth in
Schedule V hereto to the Depositor, the Servicers and the Trustee as of the
dates set forth in such Schedule. NC Capital hereby makes the representations
and warranties set forth in Schedule VI hereto to the Depositor, the Servicers
and the Trustee as of the dates set forth in such Schedule. Accredited hereby
makes the representations and warranties set forth in Schedule VII hereto to the
Depositor, the Servicers and the Trustee as of the dates set forth in such
Schedule. Decision One, in its capacity as Responsible Party, hereby makes the
representations and warranties set forth in Schedule VIII hereto to the
Depositor, the Servicers and the Trustee as of the dates set forth in such
Schedule.
(e) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File.
(f) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Depositor or an Originator, as
applicable, under this Agreement, that materially and adversely affects the
value of any Mortgage Loan or the interests of the Trustee or the
Certificateholders therein, the party discovering such breach shall give prompt
written notice thereof to the other parties. Upon receiving written notice of a
breach of a representation and warranty or written notice that a Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the Trustee shall in turn notify the applicable
Originator, in writing to correct or cure, in accordance with the this
Agreement, any such breach of a representation or warranty made by the
applicable Originator under this Agreement or the Fremont Agreements, as
applicable, within sixty (60) days from the date of notice from the Trustee or
the discovery by the applicable Originator of the breach, and if the applicable
Originator, fails or is unable to correct or cure the defect or breach within
such period, the Trustee shall notify the Depositor of such failure to correct
or cure. Unless otherwise directed by the Depositor within five (5) Business
Days after notifying the Depositor of such failure by the applicable Originator
to correct or cure, the Trustee shall notify the applicable Originator to
repurchase the Mortgage Loan (a "Deleted Mortgage Loan") at the Repurchase Price
or substitute a Substitute Mortgage Loan for such Mortgage Loan, in each case,
pursuant to this Agreement or the Fremont Agreements, as applicable.
Notwithstanding the foregoing, in the event that the Trustee receives notice of
a breach by (i) WMC of any of the representations and warranties set forth in
paragraphs (43), (44), (46), (48), (50), (52), (53), (54), (55), (56), (57),
(58), (59) or (69) of Schedule V, (ii) NC Capital of any of the representations
and warranties set forth in paragraphs (46), (47), (50), (57), (59), (60), (61),
(62), (63), (64), (65), (66) or (67) of Schedule VI, (iii) Accredited of any of
the representations and warranties set forth in paragraphs (49), (50), (51),
(53), (55), (56), (57), (58), (59), (61) or (62) of Schedule VII, or (iv)
Decision One of any representations and warranties set forth in paragraphs (xx),
(yy), (zz), (aaa), (ggg), (hhh), (iii), (jjj), (kkk), (lll), (mmm) and (nnn) of
Schedule VIII, the Trustee shall notify the applicable Originator to repurchase
the Mortgage Loan at the Repurchase Price within sixty (60) days of the
applicable Originator's receipt of such notice, as applicable. If, within ten
(10) Business Days of receipt of such notice by the applicable Originator fails
to repurchase such Mortgage Loan, the Trustee shall notify the Depositor of such
failure. The Trustee shall pursue all legal remedies available to the Trustee
against the applicable Originator under this Agreement or the Fremont
Agreements, as applicable, if the Trustee has received written notice from the
Depositor directing the Trustee to pursue such remedies.
(g) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's or the applicable Custodian's review
of the related Custodial File pursuant to Section 2.01(b) of this Agreement, the
Trustee or the Custodian, as applicable, shall notify the applicable Originator,
the applicable Servicer, the Trustee (if applicable) and the Depositor in
writing, and request that such Originator correct or cure such defect as
required under this Agreement or the Fremont Agreement, as applicable, and if
such Originator fails or is unable to correct or cure the defect within the
period set forth in this Agreement or the Fremont Agreement, as applicable, the
Trustee or the Custodian, as applicable, shall notify the Depositor of such
failure to correct or cure. Unless otherwise directed by the Depositor within
five (5) Business Days after notifying the Depositor of such failure by such
Originator to correct or cure, the Trustee or the Custodian, as applicable,
shall notify the applicable Originator to repurchase the Mortgage Loan at the
Repurchase Price or substitute a Substitute Mortgage Loan for such Mortgage
Loan, in each case, pursuant to the terms of this Agreement, as applicable. If,
within ten (10) Business Days of receipt of such notice by such Originator, such
Originator fails to repurchase such Mortgage Loan, the Trustee shall notify the
Depositor of such failure. The Trustee shall pursue all legal remedies available
to the Trustee against such Originator under this Agreement or the Fremont
Agreement, as applicable, if the Trustee has received written notice from the
Depositor directing the Trustee to pursue such remedies.
(h) Within 90 days of the earlier of either discovery by or notice
to the Depositor of any breach of a representation or warranty set forth on
Schedule IV hereto that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders therein,
the Depositor shall use its best efforts to promptly cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
Depositor shall purchase such Mortgage Loan at the Repurchase Price or
substitute a Substitute Mortgage Loan for such Mortgage Loan. Within 90 days of
the earlier of discovery by the Depositor or receipt of notice by the Depositor
of the breach of representation and warranty (g) or (yy) set forth in Section
9.02 to the Fremont Purchase Agreement, that (1) materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan and (2) has
not been cured, repurchased or substituted for by the applicable Originator in
accordance with the terms of this Agreement or the Fremont Assignment Agreement,
as applicable, (i) the Depositor shall, within the time period permitted
therefor under such agreement, take such action described in Section 5 of the
Fremont Assignment Agreement in respect of such Mortgage Loan, as if the
Depositor were the applicable Originator, and (ii) the Trustee or applicable
Custodian shall promptly deliver to the Depositor or its designee the related
Mortgage File in accordance with the applicable Servicer's direction in a
Request for Release and, upon Xxxxxxxxx's request, the Trustee shall assign to
the Depositor all of its rights with respect to such Originator's breach under
this Agreement or the Fremont Assignment Agreement, as applicable, which
assignment shall be evidenced by a writing prepared by the Depositor and
executed by the Trustee in favor of the Depositor. Any obligation of the
Depositor under this subsection shall terminate upon receipt by the Trustee of a
confirmation from each Rating Agency that such termination will not cause a
downgrade, qualification or withdrawal of the rating then assigned to any Class
of Certificates by any Rating Agency.
(i) Within 90 days of the earlier of either discovery by or notice
to the applicable Responsible Party of any breach of a representation or
warranty set forth on Schedule V, Schedule VI, Schedule VII or Schedule VIII, as
applicable, that materially and adversely affects the value of any Mortgage Loan
or the interest of the Trustee or the Certificateholders therein, the applicable
Responsible Party shall use its best efforts to promptly cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
applicable Responsible Party shall, at the Depositor's option, purchase such
Mortgage Loan at the Repurchase Price or substitute a Substitute Mortgage Loan
for such Mortgage Loan, if applicable.
(j) Any substitution of a Substitute Mortgage Loan by a Responsible
Party shall be made in accordance with the substitution procedures set forth in
the applicable Purchase Agreement, which provisions shall be as set forth in
such agreements as if they were set forth herein. With respect to any Substitute
Mortgage Loan or Loans substituted by the Depositor or any Responsible Party,
the Depositor or such Responsible Party, as applicable, shall deliver to the
Trustee or the Custodian, as applicable, for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related Assignment of
Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. With respect to any Substitute Mortgage Loan or Loans substituted
by Fremont, the Depositor shall use reasonable efforts to cause Fremont to
deliver to the Trustee or applicable Custodian for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related Assignment of
Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the Due Period of substitution shall not be part
of the Trust Fund and will be retained by the Depositor or the applicable
Responsible Party on the next succeeding Distribution Date. For the Due Period
of substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for such Due Period and thereafter the
Depositor or the applicable Responsible Party shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan.
(k) The applicable Servicer, based upon information provided by the
Depositor or the applicable Originator, shall amend the Mortgage Loan Schedule
for the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and
such Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee or
Custodian, as applicable. Upon such substitution, the Substitute Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all respects, and,
if the substitution is made by the Depositor, the Depositor shall be deemed to
have made with respect to such Substitute Mortgage Loan or Loans, as of the date
of substitution, the representations and warranties made pursuant to Section
2.03(b) with respect to such Mortgage Loan. Upon any such substitution and the
deposit into the related Collection Account of the amount required to be
deposited therein in connection with such substitution as described in Section
2.03(k), the Trustee or the Custodian, as applicable, shall release the Mortgage
File held for the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the Depositor or the applicable Originator and shall execute
and deliver at the direction of the Depositor or the applicable Originator, such
instruments of transfer or assignment prepared by the Depositor or the
applicable Originator, in each case without recourse, as shall be necessary to
vest title in the Depositor or the applicable Originator, of the Trustee's
interest in any Deleted Mortgage Loan substituted for pursuant to this Section
2.03.
(l) For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable
Servicer will determine the amount (if any) by which the aggregate unpaid
principal balance of all such Substitute Mortgage Loans as of the date of
substitution is less than the aggregate unpaid principal balance of all such
Deleted Mortgage Loans. The amount of such shortage, plus an amount equal to the
sum of (i) any accrued and unpaid interest on the Deleted Mortgage Loans and
(ii) all unreimbursed Servicing Advances with respect to such Deleted Mortgage
Loans, or the amount of any similar shortage with respect to a Substitute
Mortgage Loan substituted by a Responsible Party under this Agreement
(collectively, the "Substitution Adjustment Amount"), shall be deposited into
the related Collection Account by the Depositor on or before the Distribution
Account Deposit Date for the Distribution Date following the Prepayment Period
during which the related Mortgage Loan became required to be purchased or
replaced hereunder. The Depositor shall use reasonable efforts to cause Fremont
to remit to the applicable Servicer for deposit into the related Collection
Account any Substitution Adjustment Amount on or before the Distribution Account
Deposit Date for the Distribution Date following the Prepayment Period during
which the related Mortgage Loan became required to be purchased or replaced
hereunder.
(m) Any Mortgage Loan repurchased pursuant to this Section 2.03 will
be removed from the Trust Fund. The applicable Servicer shall amend the Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect the removal
of any Mortgage Loan repurchased and such Servicer shall deliver the amended
Mortgage Loan Schedule to the Trustee or Custodian, as applicable. For purposes
of determining the applicable Repurchase Price, any such repurchase shall occur
or shall be deemed to occur as of the last day of the applicable Prepayment
Period.
(n) In the event that the Depositor or any Responsible Party shall
have repurchased a Mortgage Loan pursuant to this Agreement, the Repurchase
Price therefor shall be deposited by the applicable Servicer in the applicable
Collection Account of the related Servicer pursuant to Section 3.10 on or before
the Distribution Account Deposit Date for the Distribution Date following the
Prepayment Period during which the Depositor or such Responsible Party, as
applicable, repurchased such Mortgage Loan and upon such deposit of the
Repurchase Price and receipt of a Request for Release in the form of Exhibit J
hereto, the Trustee or Custodian, as applicable, shall release the related
Custodial File held for the benefit of the Certificateholders to such Person as
directed by the applicable Servicer, and the Trustee shall execute and deliver
at such Person's direction such instruments of transfer or assignment prepared
by such Person, in each case without recourse, as shall be necessary to transfer
title from the Trustee.
(o) In addition to any repurchase or substitution obligation by any
Responsible Party under this Agreement, each Responsible Party shall indemnify
the Depositor and its Affiliates, the Servicers, the Purchaser, the Trustee, the
Custodian and the Trust for any breach of any representation and warranty of
such Responsible Party set forth in this Agreement, in accordance with the
indemnification provisions relating to breaches of representations and
warranties (including without limitation, the representations and warranties set
forth in paragraph (43) of Schedule V, paragraph (46) of Schedule VI, paragraph
(50) of Schedule VII and paragraph (yy) of Schedule VIII, as applicable, to this
Agreement) and defective Mortgage Loans set forth in the Decision One Purchase
Agreement, the NC Capital Purchase Agreement, the WMC Purchase Agreement or the
Accredited Purchase Agreement, as applicable, as if such indemnification
provisions were set forth herein for the benefit of the Depositor and its
Affiliates, the Servicers, the Purchaser, the Trustee and the Trust. This
indemnity shall survive the termination of this Agreement. Fremont is obligated
to make certain indemnification payments for material breaches of
representations and warranties as further set forth in the Fremont Agreements.
(p) It is understood and agreed by the parties hereto that the
obligation of the Depositor, Fremont under the Fremont Agreements or any
Responsible Party under this Agreement, to cure, repurchase or substitute any
Mortgage Loan as to which a breach of a representation and warranty has occurred
and is continuing, together with any related indemnification obligations set
forth herein, shall constitute the sole remedies against such Persons respecting
such breach available to Certificateholders, the Depositor (if applicable), or
the Trustee on their behalf.
(q) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by Fremont pursuant to the Fremont Agreements,
the party discovering such breach shall give prompt written notice thereof to
the other parties to this Agreement and Fremont. The Trustee shall pursue all
legal remedies available to the Trustee against Fremont with respect to such
breach under the Fremont Agreements if the Trustee has received written notice
from the Depositor directing the Trustee to pursue such remedies.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee or the applicable Custodian for the
benefit of the Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator has
executed and delivered to or upon the order of the Depositor, the Certificates
in authorized denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and future
Holders of the Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is the Distribution Date occurring in
July 2035, which is the Distribution Date in the month following the month in
which the latest maturity date of any Mortgage Loan occurs.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee and the
Servicers that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement; (c) This Agreement
has been duly and validly authorized, executed and delivered by the Depositor,
all requisite corporate action having been taken, and, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes or will constitute the legal, valid and binding agreement of the
Depositor, enforceable against the Depositor in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 12.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.06 shall survive delivery of the
respective Custodial Files to the Trustee or to a Custodian, as the case may be,
and shall inure to the benefit of the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, each Servicer shall service and administer the
Mortgage Loans for which it is acting as Servicer in accordance with the terms
of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that such Servicer, any Subservicer or any
Affiliate of such Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, each Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, each Servicer
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, each Servicer in
its own name or in the name of a Subservicer is hereby authorized and empowered
by the Trustee when the applicable Servicer believes it appropriate in its best
judgment in accordance with Accepted Servicing Practices, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. Each Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
Each Servicer covenants that its computer and other systems used in servicing
the Mortgage Loans operate in a manner such that the Servicer can service the
Mortgage Loans in accordance with the terms of this Pooling and Servicing
Agreement. Each Servicer shall also comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under any standard
hazard insurance policy. Subject to Section 3.16, the Trustee and the Custodian
shall execute, at the written request of a Servicer, and furnish to such
Servicer and any Subservicer such documents provided to the Trustee or the
Custodian, as applicable, as are necessary or appropriate to enable such
Servicer or any Subservicer to carry out its servicing and administrative duties
hereunder, and the Trustee hereby grants to each Servicer, and this Agreement
shall constitute, a power of attorney to carry out such duties, including a
power of attorney in the form of Exhibit R hereto to take title to Mortgaged
Properties after foreclosure in the name of and on behalf of the Trustee. The
Trustee shall execute a separate power of attorney in favor of each Servicer for
the purposes described herein to the extent necessary or desirable to enable
each Servicer to perform its duties hereunder. The Trustee shall not be liable
for the actions of any Servicer or any Subservicers under such powers of
attorney. Notwithstanding anything contained herein to the contrary, no Servicer
or Subservicer shall without the Trustee's consent: (i) initiate any action,
suit or proceeding solely under the Trustee's name without indicating such
Servicer's or Subservicer's, as applicable, representative capacity, or (ii)
take any action with the intent to, or which actually does cause, the Trustee to
be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, each Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by a Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, a
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and none of the Servicers shall (i) permit
any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (except for a reduction of interest payments resulting
from the application of the Servicemembers Civil Relief Act or any similar state
statutes) or (ii) permit any modification, waiver or amendment of any term of
any Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Department of the Treasury regulations promulgated thereunder) and (B) cause
either the Upper Tier REMIC or the Lower Tier REMIC to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions, or (iii)
except as provided in Section 3.07(a), waive any Prepayment Charges.
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
Servicer from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the applicable Servicer shall be entitled to waive any such provisions on behalf
of the Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers. (a) Each Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the Mortgage Loans ("Subservicing Agreements"). The applicable Servicer shall,
within a reasonable period of time, give notice to the Trustee of any such
Subservicing Agreement. The Trustee shall not be required to review or consent
to such Subservicing Agreements and shall have no liability in connection
therewith.
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Freddie Mac or Xxxxxx Xxx approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
Each Servicer will examine each Subservicing Agreement to which it is a party
and will be familiar with the terms thereof. The terms of any Subservicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
Each Servicer and the respective Subservicers may enter into and make amendments
to the Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee,
without the consent of the Trustee. Any variation without the consent of the
Trustee from the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to such Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. Each Servicer shall deliver to the
Trustee, the Securities Administrator and the Depositor copies of all
Subservicing Agreements, and any amendments or modifications thereof, promptly
upon such Servicer's execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, each Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which such Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as such Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. Each Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers. Each Servicer shall be entitled
to terminate any Subservicing Agreement to which such Servicer is a party and
the rights and obligations of any Subservicer pursuant to any such Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer, all servicing
obligations of such Subservicer shall be assumed simultaneously by the
applicable Servicer party to the related Subservicing Agreement without any act
or deed on the part of such Subservicer or such Servicer, and such Servicer
either shall service directly the related Mortgage Loans or shall enter into a
Subservicing Agreement with a successor Subservicer which qualifies under
Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer party to the related Subservicing Agreement shall, for any reason, no
longer be a Servicer (including termination due to an Event of Default).
Section 3.04 Liability of the Servicers. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and a Subservicer or reference to
actions taken through a Subservicer or otherwise, such Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
such Servicer alone were servicing and administering such Mortgage Loans. Each
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of such Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
related Servicer alone, and the Trustee (or any successor to such Servicer)
shall not be deemed a party thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.06. Each Servicer shall be solely liable for all fees owed by
it to any Subservicer, irrespective of whether such Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event a Servicer at any time shall for any reason no longer be a
Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee, or the successor Servicer if the successor is not the
Trustee, shall thereupon assume all of the rights and obligations of such
Servicer under each Subservicing Agreement that such Servicer may have entered
into, with copies thereof provided to the Trustee, or the successor Servicer if
the successor is not the Trustee, prior to the Trustee, or the successor
Servicer if the successor is not the Trustee, assuming such rights and
obligations, unless the Trustee elects to terminate any Subservicing Agreement
in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
Servicer shall be deemed, subject to Section 3.03, to have assumed all of such
Servicer's interest therein and to have replaced such Servicer as a party to
each Subservicing Agreement to which the predecessor Servicer was a party to the
same extent as if each Subservicing Agreement had been assigned to the assuming
party, except that (i) such Servicer shall not thereby be relieved of any
liability or obligations under any such Subservicing Agreement that arose before
it ceased to be a Servicer and (ii) none of the Depositor, the Trustee, their
designees or any successor to such Servicer shall be deemed to have assumed any
liability or obligation of such Servicer that arose before it ceased to be a
Servicer.
Such Servicer at its expense shall, upon request of the Trustee, its
designee or the successor Servicer deliver to the assuming party all documents
and records relating to each Subservicing Agreement to which it is a party and
the Mortgage Loans then being serviced by it and an accounting of amounts
collected and held by or on behalf of it, and otherwise use its best efforts to
effect the orderly and efficient transfer of the Subservicing Agreements to the
assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) Each
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, each Servicer may (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the Scheduled
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided that any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the applicable Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.01
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.01(d)
pursuant to which such Servicer shall not be required to make any such advances
that are Nonrecoverable P&I Advances. Notwithstanding the foregoing, a Servicer
may waive, or permit a Subservicer to waive, in whole or in part, a Prepayment
Charge only under the following circumstances: (i) such waiver relates to a
default or a reasonably foreseeable default and would, in the reasonable
judgment of such Servicer, maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related Mortgage Loan, (ii)
such Prepayment Charge is not permitted to be collected by applicable federal,
state or local law or regulation or (iii) the collection of such Prepayment
Charge would be considered "predatory" pursuant to written guidance published or
issued by any applicable federal, state or local regulatory authority acting in
its official capacity and having jurisdiction over such matters. If a Prepayment
Charge is waived other than as permitted by the prior sentence, then the
applicable Servicer is required to pay the amount of such waived Prepayment
Charge, for the benefit of the Holders of the Class P Certificates, by
depositing such amount into the related Collection Account together with and at
the time that the amount prepaid on the related Mortgage Loan is required to be
deposited into the Collection Account; provided, however, that the applicable
Servicer shall not have an obligation to pay the amount of any uncollected
Prepayment Charge if the failure to collect such amount is the direct result of
inaccurate or incomplete information on the Mortgage Loan Schedule in effect at
such time.
(b) (i) The Securities Administrator shall establish and maintain
the Excess Reserve Fund Account, on behalf of the Class X Certificateholders, to
receive any Basis Risk Payment and any Interest Rate Cap Payment and to secure
their limited recourse obligation to pay to the LIBOR Certificateholders Basis
Risk CarryForward Amounts.
(ii) On each Distribution Date, the Securities Administrator shall
deposit the amount of any Basis Risk Payment received and any Interest
Rate Cap Payment received for such date into the Excess Reserve Fund
Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
CarryForward Amount on any Class of Certificates, the Securities Administrator
shall (1) withdraw from the Distribution Account and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.02(a)(iii)(S), the lesser of (x)
the Class X Distributable Amount (without regard to the reduction in the
definition thereof with respect to the Basis Risk Payment) (to the extent
remaining after the distributions specified in Sections 4.02(a)(iii)(A)-(R)) and
(y) the aggregate Basis Risk CarryForward Amounts for such Distribution Date and
(2) withdraw from the Excess Reserve Fund Account amounts necessary to pay to
such Class or Classes of Certificates the Basis Risk CarryForward Amount. Such
payments shall be allocated to those Classes on a pro rata basis based upon the
amount of Basis Risk CarryForward Amount owed to each such Class and shall be
paid in the priority set forth in Sections 4.02(a)(iii)(T)-(U).
(ii) The Securities Administrator shall account for the Excess
Reserve Fund Account as an asset of a grantor trust under subpart E, Part
I of the subchapter J of the Code and not an asset of any REMIC created
pursuant to this Agreement. The beneficial owners of the Excess Reserve
Fund Account are the Class X Certificateholders. For all federal tax
purposes, amounts transferred by the Upper Tier REMIC to the Excess
Reserve Fund Account shall be treated as distributions by the Securities
Administrator to the Class X Certificateholders.
(iii) Any Basis Risk CarryForward Amounts distributed by the
Securities Administrator to the LIBOR Certificateholders shall be
accounted for by the Securities Administrator as amounts paid first to the
Holders of the Class X Certificates and then to the respective Class or
Classes of LIBOR Certificates. In addition, the Securities Administrator
shall account for the LIBOR Certificateholders' rights to receive payments
of Basis Risk CarryForward Amounts as rights in a limited recourse
interest rate cap contract written by the Class X Certificateholders in
favor of the LIBOR Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any payments from
the Excess Reserve Fund Account except as expressly set forth in this
Section 3.07(c) and Sections 4.02(a)(iii)(T)-(V).
(d) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The Depositor shall
cause the Closing Date Deposit Amount to be deposited into the Distribution
Account on the Closing Date. The Securities Administrator shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicers to the Securities
Administrator pursuant to Section 3.11;
(ii) any amount deposited by the Servicers pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not required
to be remitted, it may at any time direct the Securities Administrator in
writing to withdraw such amount from the Distribution Account, any provision
herein to the contrary notwithstanding. Such direction may be accomplished by
delivering notice to the Securities Administrator which describes the amounts
deposited in error in the Distribution Account. All funds deposited in the
Distribution Account shall be held by the Securities Administrator in trust for
the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 4.02.
(e) The Securities Administrator may invest the funds in the
Distribution Account, in one or more Permitted Investments, in accordance with
Section 3.12. Each Servicer shall direct the Securities Administrator to
withdraw from the Distribution Account and to remit to such Servicer no less
than monthly, all income and gain realized from the investment of the portion of
funds deposited in the Distribution Account by such Servicer (except during the
Securities Administrator Float Period). The Securities Administrator may
withdraw from the Distribution Account any income or gain earned from the
investment of funds deposited therein during the Securities Administrator Float
Period for its own benefit.
(f) Each Servicer shall give notice to the Securities Administrator
of any proposed change of the location of the related Collection Account within
a reasonable period of time prior to any change thereof and the Securities
Administrator shall forward such notice to the Rating Agencies and the
Depositor.
(g) In order to comply with its duties under the USA Patriot Act of
2001, the Trustee shall obtain and verify certain information and documentation
from the other parties to this Agreement including, but not limited to, each
such party's name, address, and other identifying information.
(h) On or prior to the Determination Date, each Custodian shall
deliver an invoice to the Securities Administrator, setting forth the amount of
the fees payable to such Custodian for the related Distribution Date. The
Securities Administrator shall calculate such fees for such Distribution Date,
based upon the fee schedule set forth in each such invoice. On each Distribution
Date, the Securities Administrator shall remit the fees so calculated to the
Custodians. On or prior to the Determination Date, the Trustee shall deliver an
invoice to the Securities Administrator, setting forth the amount of the fee
payable to the Trustee for the related Distribution Date. The Securities
Administrator shall calculate such fee for such Distribution Date, based upon a
separate fee schedule with the Trustee. On each Distribution Date, the
Securities Administrator shall remit the invoiced fee to the Trustee. The fees
of the Custodians and the Trustee shall be payable solely by the Master Servicer
from its own funds.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more accounts
(collectively, the "Subservicing Account"). The Subservicing Account shall be an
Eligible Account and shall otherwise be acceptable to the related Servicer. The
Subservicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less
its servicing compensation to the extent permitted by the Subservicing
Agreement, and shall thereafter deposit such amounts in the Subservicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter deposit such
proceeds in the Collection Account of the related Servicer or remit such
proceeds to the related Servicer for deposit in the Collection Account of the
related Servicer not later than two Business Days after the deposit of such
amounts in the Subservicing Account. For purposes of this Agreement, such
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) Each Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract") serviced by such
Servicer. Each Tax Service Contract shall be assigned to the Trustee, or a
successor Servicer at the applicable Servicer's expense in the event that a
Servicer is terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) above, each Servicer undertakes to perform such functions with
respect to the Mortgage Loans serviced by such Servicer. To the extent the
related Mortgage provides for Escrow Payments, the related Servicer shall
establish and maintain, or cause to be established and maintained, one or more
accounts (the "Escrow Accounts"), which shall be Eligible Accounts. Each
Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, all collections from the Mortgagors (or related advances from
Subservicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments")
collected on account of the Mortgage Loans and shall thereafter deposit such
Escrow Payments in the Escrow Accounts, in no event more than two Business Days
after the deposit of such funds in the clearing account, for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may be made only to (i)
effect payment of taxes, assessments, hazard insurance premiums, and comparable
items; (ii) reimburse such Servicer (or a Subservicer to the extent provided in
the related Subservicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of such Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
to transfer such funds to a replacement Escrow Account that meets the
requirements hereof; (vii) recover amounts deposited in error. As part of its
servicing duties, each Servicer or Subservicers shall pay to the Mortgagors
interest on funds in Escrow Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Escrow Accounts is insufficient, to
pay such interest from its or their own funds, without any reimbursement
therefor. To the extent that a Mortgage does not provide for Escrow Payments,
the applicable Servicer shall determine whether any such payments are made by
the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The applicable
Servicer assumes full responsibility for the payment of all such bills within
such time and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments; provided, however, that such advances are deemed to be Servicing
Advances.
Section 3.10 Collection Accounts. (a) On behalf of the Trustee, each
Servicer shall establish and maintain, or cause to be established and
maintained, one or more separate Eligible Accounts (each such account or
accounts, a "Collection Account"), held in trust for the benefit of the Trustee.
On behalf of the Trustee, each Servicer shall deposit or cause to be deposited
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after such Servicer's receipt thereof, and shall
thereafter deposit in the related Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices and Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer pursuant
to the second paragraph of Section 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by such Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by each Servicer in the related Collection Account and shall,
upon collection, belong to the applicable Servicer as additional compensation
for its servicing activities. In the event a Servicer shall deposit in the
related Collection Account any amount not required to be deposited therein, it
may at any time withdraw such amount from its Collection Account, any provision
herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. Each
Servicer shall give notice to the Trustee of the location of the related
Collection Account maintained by it when established and prior to any change
thereof in accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Accounts. (a) Each
Servicer shall, from time to time, make withdrawals from the related Collection
Account for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Master
Servicer (A) the Master Servicing Fee with respect to such Distribution
Date and (B) all Available Funds in respect of the related Distribution
Date together with all amounts representing Prepayment Charges from the
Mortgage Loans received by the applicable Servicer during the related
Prepayment Period;
(ii) to reimburse such Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 (such Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(iii) to pay such Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan serviced by such Servicer or Subservicer, but only to
the extent of any Late Collections, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds or other amounts as may be collected by such
Servicer from a Mortgagor, or otherwise received with respect to such
Mortgage Loan (or the related REO Property) (such Servicer's right for
recovery or reimbursement has priority over the Trust as stated in the
definition of "Available Funds");
(iv) to pay to such Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in its Collection Account;
(v) to pay to the applicable Responsible Party or the Depositor, as
applicable, with respect to each Mortgage Loan that has previously been
repurchased or replaced pursuant to this Agreement, all amounts received
thereon subsequent to the date of purchase or substitution, as further
described herein;
(vi) to reimburse such Servicer for (A) any P&I Advance or Servicing
Advance previously made which such Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent not
recoverable from Liquidation Proceeds, Insurance Proceeds or other amounts
received with respect to the related Second Lien Mortgage Loan under
Section 3.11(a)(iii) (such Servicer's right for recovery or reimbursement
has priority over the Trust as stated in the definition of "Available
Funds");
(vii) to pay, or to reimburse such Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan serviced by
such Servicer pursuant to Section 3.15 (such Servicer's right for recovery
or reimbursement has priority over the Trust);
(viii) to reimburse such Servicer or the Depositor for expenses
incurred by or reimbursable to such Servicer or the Depositor, as the case
may be, pursuant to Section 6.03 (such Xxxxxxxx's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(ix) to reimburse such Servicer or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect giving
rise to the repurchase obligation of any Responsible Party or the
Depositor, as applicable, that were included in the Repurchase Price of
the Mortgage Loan, including any expenses arising out of the enforcement
of the repurchase obligation, to the extent not otherwise paid pursuant to
the terms hereof (such Servicer's right for recovery or reimbursement has
priority over the Trust as stated in the definition of "Available Funds");
(x) to withdraw any amounts deposited in the related Collection
Account in error;
(xi) to withdraw any amounts held in the related Collection Account
and not required to be remitted to the Master Servicer on the Remittance
Date occurring in the month in which such amounts are deposited into such
Collection Account, to reimburse such Servicer for unreimbursed P&I
Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the related Collection Account upon
termination of this Agreement;
(b) Each Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. Each Servicer shall provide written notification (as set forth
in Section 4.01(d)) to the Master Servicer, on or prior to the next succeeding
Remittance Date, upon making any withdrawals from the related Collection Account
pursuant to subclause (a)(vi) above.
(c) Each Servicer shall be responsible for reviewing and reconciling
the applicable Collection Account in accordance with Accepted Servicing
Practices. Each Servicer shall act to promptly to resolve any discrepancies.
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account. (a) Each Servicer may invest the funds in the related
Collection Account and the related Escrow Account (to the extent permitted by
law and the related Mortgage Loan documents) and the Securities Administrator
may (but is not obligated to) invest funds in the Distribution Account during
the Securities Administrator Float Period, and, with respect to the portion of
funds in the Distribution Account deposited by a Servicer, shall (except during
the Securities Administrator Float Period) invest such funds in the Distribution
Account at the direction of such Servicer (for purposes of this Section 3.12,
such Accounts are referred to as an "Investment Account"), in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand no later than the Business Day immediately preceding
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement; provided, however, that the Securities Administrator
shall have no obligation to invest funds deposited into the Distribution Account
by the Master Servicer on the Remittance Date later than 10:00 a.m. (Pacific
Standard Time). If no investment instruction is given in a timely manner, the
Securities Administrator shall hold the funds in the Distribution Account
uninvested. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account (other than
investments made during the Securities Administrator Float Period) shall be made
in the name of the applicable Servicer. The applicable Servicer shall be
entitled to sole possession (except with respect to investment direction of
funds and any income and gain realized on any investment in the Distribution
Account during the Securities Administrator Float Period) over each such related
investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the applicable Servicer (with a copy
to the Securities Administrator or its agent if related to investment of funds
in the Distribution Account not during the Securities Administrator Float
Period), or with respect to investments during the Securities Administrator
Float Period, the Securities Administrator or its agent, together with any
document of transfer necessary to transfer title to such investment to the
applicable Servicer, or with respect to investments during the Securities
Administrator Float Period, the Securities Administrator or its agent. In the
event amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the applicable Servicer, or with respect
to investments during the Securities Administrator Float Period, the Trustee
may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the related Collection Account or Escrow Account held by or on
behalf of the related Servicer, shall be for the benefit of such Servicer and
shall be subject to its withdrawal in the manner set forth in Section 3.11. Such
Servicer shall deposit in its Collection Account or Escrow Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of the portion
of funds deposited in the Distribution Account by a Servicer and held by the
Securities Administrator, shall be for the benefit of such Servicer (except for
any income or gain realized from the investment of funds on deposit in the
Distribution Account during the Securities Administrator Float Period, which
shall be for the benefit of the Securities Administrator) and shall be subject
to the Securities Administrator's withdrawal in the manner set forth in Section
3.07(e). Each Servicer shall deposit in the Distribution Account (except with
respect to losses incurred during the Securities Administrator Float Period) the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Securities Administrator shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
(e) The Securities Administrator shall not be liable for the amount
of any loss incurred with respect of any investment or lack of investment of
funds held in any Investment Account or the Distribution Account (except that if
any losses are incurred from the investment of funds deposited in the
Distribution Account during the Securities Administrator Float Period, the
Securities Administrator shall be responsible for reimbursing the Trust for such
loss immediately upon realization of such loss) if made in accordance with this
Section 3.12.
(f) The Trustee or its Affiliates shall be permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable pursuant to this Agreement.
(g) The Securities Administrator or its Affiliates shall be
permitted to receive additional compensation that could be deemed to be in the
Securities Administrator 's economic self-interest for (i) serving as investment
adviser, administrator, shareholder, servicing agent, custodian or sub-custodian
with respect to certain of the Permitted Investments, (ii) using Affiliates to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. Such compensation shall not be
considered an amount that is reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) Each Servicer shall cause to be maintained
for each Mortgage Loan serviced by such Servicer fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the least of (i) the outstanding principal balance of such Mortgage Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. Each Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property serviced by such
Servicer in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property. Each Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by any Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by any Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Securities Administrator, be added
to the unpaid principal balance of the related Mortgage Loan, notwithstanding
that the terms of such Mortgage Loan so permit. It is understood and agreed that
no earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the applicable Servicer
will cause to be maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance available for the related Mortgaged Property under the national
flood insurance program (assuming that the area in which such Mortgaged Property
is located is participating in such program).
In the event that any Servicer shall obtain and maintain a blanket
policy with an insurer either (i) acceptable to Xxxxxx Xxx or Freddie Mac or
(ii) having a General Policy Rating of B:III or better from Best's (or such
other rating that is comparable to such rating) insuring against hazard losses
on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied
its obligations as set forth in the first two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause, in
which case such Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of this Section 3.13, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
related Collection Account from its own funds the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as administrator and servicer of the Mortgage Loans, each
Servicer agrees to prepare and present, on behalf of itself and the Trustee
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Freddie Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Xxx or Freddie Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Xxx or
Freddie Mac, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Xxx or Freddie Mac. Each Servicer shall provide the Master Servicer
upon request with copies of any such insurance policies and fidelity bond. Each
Servicer shall be deemed to have complied with this provision if an Affiliate of
the applicable 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 such Servicer. Any such errors and omissions
policy and fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Master Servicer. Each Servicer shall also
cause each Subservicer to maintain a policy of insurance covering errors and
omissions and a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"Due-on-Sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, such Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If a Servicer reasonably believes it is unable under applicable law to enforce
such "Due-on-Sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, such Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note; provided, that no such substitution shall be effective unless
such person satisfies the underwriting criteria of such Servicer and such
substitution is in the best interest of the Certificateholders as determined by
such Servicer. In connection with any assumption, modification or substitution,
such Servicer shall apply such underwriting standards and follow such practices
and procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. No
Servicer shall take or enter into any assumption and modification agreement,
however, unless (to the extent practicable in the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
Each Servicer shall notify the Master Servicer that any such substitution,
modification or assumption agreement has been completed and shall forward to the
Trustee or to the Custodian, as applicable, the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. Each
Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which may include
an acquisition of REO Property) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. Each Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Securities Administrator,
taking into account, among other things, the timing of foreclosure proceedings;
provided, however, with respect to any Second Lien Mortgage Loan for which the
related first lien mortgage loan is not included in the Trust Fund, if, after
such Mortgage Loan becomes 180 days or more delinquent, the applicable Servicer
determines that a significant net recovery is not possible through foreclosure,
such Mortgage Loan may be charged off and the Mortgage Loan will be treated as a
Liquidated Mortgage Loan giving rise to a Realized Loss. The foregoing is
subject to the provisions that, in any case in which Mortgaged Property shall
have suffered damage from an uninsured cause, a Servicer shall not be required
to expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i) that such restoration will increase the net
proceeds of liquidation of the related Mortgage Loan to the Securities
Administrator, after reimbursement to itself for such expenses, and (ii) that
such expenses will be recoverable by such Servicer through Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. Each Servicer shall be responsible
for all other costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof from the
related property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the applicable
Servicer or any Subservicer for any related unreimbursed Servicing Advances,
pursuant to Section 3.11 or 3.17; second, to reimburse the applicable Servicer
for any related unreimbursed P&I Advances, pursuant to Section 3.11; third, to
accrued and unpaid interest on the Mortgage Loan or REO Imputed Interest, at the
Mortgage Rate, to the date of the liquidation or REO Disposition, or to the Due
Date prior to the Remittance Date on which such amounts are to be distributed if
not in connection with a liquidation or REO Disposition; and fourth, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, as interest
at the Mortgage Rate (net of the Servicing Fee Rate). The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
applicable Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The
portions of the recovery so allocated to interest at the Mortgage Rate (net of
the Servicing Fee Rate) and to principal of the Mortgage Loan shall be applied
as follows: first, to reimburse the applicable Servicer or any Subservicer for
any related unreimbursed Servicing Advances in accordance with Section 3.11 or
3.17, and second, to the Securities Administrator in accordance with the
provisions of Section 4.02, subject to Section 3.17(f) with respect to certain
excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee or the Master Servicer otherwise requests,
such Servicer shall cause an environmental inspection or review of such
Mortgaged Property to be conducted by a qualified inspector. Upon completion of
the inspection, such Servicer shall promptly provide the Trustee, the Master
Servicer and the Depositor with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the applicable
Servicer shall determine consistent with Accepted Servicing Practices how the
Servicer shall proceed with respect to the Mortgaged Property. In the event (a)
the environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the applicable
Servicer determines, consistent with Accepted Servicing Practices, to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, such Servicer
shall be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse such Servicer, such
Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.11. In the event the applicable
Servicer determines not to proceed with foreclosure or acceptance of a deed in
lieu of foreclosure, such Servicer shall be reimbursed from general collections
for all Servicing Advances made with respect to the related Mortgaged Property
from the related Collection Account pursuant to Section 3.11. Neither the
Trustee nor the Master Servicer shall be responsible for any determination made
by the applicable Servicer pursuant to this paragraph or otherwise.
In the event a Servicer elects to charge-off a Second Lien Mortgage
Loan 180 days or more delinquent pursuant to this Section 3.15, no Second Lien
Mortgage Loan shall be characterized as a Liquidated Mortgage Loan, unless the
Depositor consents in writing to such characterization after the applicable
Servicer has provided the Depositor with a combined equity analysis of such
Second Lien Mortgage Loan and the related first lien mortgage loan; provided,
that if the Depositor has failed to notify the applicable Servicer within 3
Business Days of receipt of such combined equity analysis, then the Depositor
shall be deemed to have consented to such characterization. In the event a
Servicer elects to charge off a Second Lien Mortgage Loan 180 days or more
delinquent pursuant to this Section 3.15, such Servicer shall notify the Master
Servicer of such election.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by a Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, such
Servicer will, on or before the last day of the month in which such payment in
full occurs, notify the Trustee or the Custodian, as applicable, by a
certification (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are
required to be deposited in the related Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Custodial File by submitting a Request for Release (in
writing or an electronic format acceptable to the Trustee or the Custodian, as
applicable) to the Trustee or Custodian, as applicable. Upon receipt of such
certification and Request for Release, the Trustee or the Custodian, as
applicable, shall promptly release the related Custodial File to such Servicer
within two (2) Business Days. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
related Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee or Custodian,
as applicable, shall, upon request of a Servicer and delivery to the Trustee or
the Custodian, as applicable, of a Request for Release, release the related
Custodial File to such Servicer, and the Trustee or the Custodian, as
applicable, shall, at the direction of such Servicer, execute such documents as
shall be necessary to the prosecution of any such proceedings and such Servicer
shall retain the Mortgage File in trust for the benefit of the Trustee. Such
Request for Release shall obligate the applicable Servicer to return each and
every document previously requested from the Custodial File to the Trustee or
the Custodian, as applicable, when the need therefor by such Servicer no longer
exists, unless the Mortgage Loan has been charged-off or liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
related Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and such Servicer has delivered to the Trustee or the Custodian,
as applicable, a certificate of a Servicing Officer certifying as to the name
and address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
charged-off or liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
related Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, a copy of the Request for Release shall be released
by the Trustee or the Custodian, as applicable, to the applicable Servicer or
its designee upon request therefor. Upon receipt of a Request for Release under
this Section 3.16, the Trustee or the Custodian, as applicable, shall deliver
the related Custodial File to the requesting Servicer by regular mail, unless
such Servicer requests that the Trustee or Custodian, as applicable, deliver
such Custodial File to such Servicer by overnight courier (in which case such
delivery shall be at such Servicer's expense); provided, however, that in the
event a Servicer has not previously received copies of the relevant Mortgage
Loan Documents necessary to service the related Mortgage Loan in accordance with
Accepted Servicing Practices, the applicable Responsible Party shall reimburse
the applicable Servicer for any overnight courier charges incurred for the
requested Custodial Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the applicable Servicer copies of any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity, or shall exercise and deliver to such Servicer a power of attorney
sufficient to authorize such Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
applicable Servicer shall cause the deed or certificate of sale to be issued in
the name of the Trustee, on behalf of the Certificateholders. Upon written
request by the applicable Servicer, the Trustee shall provide such Servicer with
a power of attorney prepared by such Servicer with respect to such REO Property.
(b) Each Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. Each Servicer, either itself or through an agent selected by such
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. Each Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
such Servicer deems to be in the best interest of the Trustee. The Trustee shall
have no obligations with respect to any REO Dispositions.
(c) Each Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(d) Each Servicer shall deposit net of reimbursement to such
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited, in no event more than
two (2) Business Days following such Servicer's receipt thereof, in the related
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(e) Each Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan, plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition, shall be
retained by the applicable Servicer as additional servicing compensation.
(g) Each Servicer shall use its reasonable best efforts to sell, or
cause its Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property serviced by such Servicer or Subservicer as soon as possible,
but in no event later than the conclusion of the third calendar year beginning
after the year of its acquisition by the Lower Tier REMIC unless (i) such
Servicer applies for an extension of such period from the Internal Revenue
Service pursuant to the REMIC Provisions and Code Section 856(e)(3), in which
event such REO Property shall be sold within the applicable extension period, or
(ii) such Servicer obtains for the Trustee an Opinion of Counsel, addressed to
the Depositor, the Trustee and such Servicer, to the effect that the holding by
the Lower Tier REMIC of such REO Property subsequent to such period will not
result in the imposition of taxes on "prohibited transactions" as defined in
Section 860F of the Code or cause the Lower Tier REMIC or Upper Tier REMIC to
fail to qualify as a REMIC under the REMIC Provisions or comparable provisions
of relevant state laws at any time. Each Servicer shall manage, conserve,
protect and operate each REO Property serviced by such Servicer for the Trustee
solely for the purpose of its prompt disposition and sale in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) or result in the receipt by the Lower Tier
REMIC of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under Section 860G(a)(1) of the Code. Pursuant to its
efforts to sell such REO Property, the applicable Servicer shall either itself
or through an agent selected by such Servicer protect and conserve such REO
Property in the same manner and to such extent as is customary in the locality
where such REO Property is located and may, incident to its conservation and
protection of the interests of the Trustee on behalf of the Certificateholders,
rent the same, or any part thereof, as such Servicer deems to be in the best
interest of the Trustee on behalf of the Certificateholders for the period prior
to the sale of such REO Property; provided, however, that any rent received or
accrued with respect to such REO Property qualifies as "rents from real
property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the applicable Servicer shall adjust the Mortgage
Rate on the related Adjustment Date and shall adjust the Scheduled Payment on
the related mortgage payment adjustment date, if applicable, in compliance with
the requirements of applicable law and the related Mortgage and Mortgage Note.
In the event that an Index becomes unavailable or otherwise unpublished, the
related Servicer shall select a comparable alternative index over which it has
no direct control and which is readily verifiable. Each Servicer shall execute
and deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Rate and
Scheduled Payment adjustments. Each Servicer shall promptly, upon written
request therefor, deliver to the Master Servicer such notifications and any
additional applicable data regarding such adjustments and the methods used to
calculate and implement such adjustments. Upon the discovery by a Servicer or
the receipt of notice from the Master Servicer that a Servicer has failed to
adjust a Mortgage Rate or Scheduled Payment in accordance with the terms of the
related Mortgage Note, such Servicer shall deposit in the related Collection
Account from its own funds the amount of any interest loss caused as such
interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The applicable Servicer shall provide, or cause
the Subservicer to provide, to the Depositor, the Trustee, the OTS or the FDIC
and the examiners and supervisory agents thereof, access to the documentation
regarding the Mortgage Loans in its possession required by applicable
regulations of the OTS. Such access shall be afforded without charge, but only
upon five (5) Business Days' prior written request and during normal business
hours at the offices of the applicable Servicer or any Subservicer. Nothing in
this Section shall derogate from the obligation of any such party to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of any such party to provide access as provided in this Section
as a result of such obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Master Servicer. Each Servicer shall account fully
to the Trustee and the Master Servicer for any funds received by such Servicer
or which otherwise are collected by such Servicer as Liquidation Proceeds,
Condemnation Proceeds or Insurance Proceeds in respect of any Mortgage Loan
serviced by such Servicer. All Mortgage Files and funds collected or held by, or
under the control of, a Servicer in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds,
including, but not limited to, any funds on deposit in its Collection Account,
shall be held by such Servicer for and on behalf of the Trustee and shall be and
remain the sole and exclusive property of the Trustee, subject to the applicable
provisions of this Agreement. Each Servicer also agrees that it shall not
create, incur or subject any Mortgage File or any funds that are deposited in
any Collection Account, the Distribution Account or any Escrow Account, or any
funds that otherwise are or may become due or payable to the Master Servicer for
the benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of setoff against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that such Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to such Servicer under this
Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, each Servicer shall, with respect to each Mortgage Loan
serviced by it, be entitled to retain from deposits to its Collection Account
and from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with respect to each
Mortgage Loan (less any portion of such amounts retained by any Subservicer). In
addition, each Servicer shall be entitled to recover unpaid Servicing Fees out
of related late collections to the extent permitted in Section 3.11. The right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of a Servicer's responsibilities and
obligations under this Agreement; provided, however, that each Servicer may pay
from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by a
Servicer only to the extent such fees or charges are received by such Servicer.
Each Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw
from the related Collection Account, and pursuant to Section 3.07(e), to direct
the Master Servicer to withdraw from the Distribution Account and remit to the
applicable Servicer (except for monies invested during the Securities
Administrator Float Period), as additional servicing compensation, interest or
other income earned on the related portions of deposits therein. Each Servicer
shall also be entitled as additional servicing compensation, to interest or
other income earned on deposits in the related Escrow Account (to the extent
permitted by law and the related Mortgage Loan documents) in accordance with
Section 3.12. HomEq shall also be entitled to retain net Prepayment Interest
Excesses (to the extent not required to offset Prepayment Interest Shortfalls),
but only to the extent such amounts are received by HomEq.
(c) Each Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by such Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. Each Servicer will
deliver or cause to be delivered to the Depositor, the Rating Agencies, the
Securities Administrator, the Master Servicer and the Trustee on or before March
15th of each calendar year, commencing in 2006, an Officer's Certificate
stating, as to each signatory thereof, that (i) a review of the activities of
such Servicer during the preceding calendar year and of performance under this
Agreement or a similar agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, such
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof. Promptly after receipt of such Officer's Certificate, the
Depositor shall review such Officer's Certificate and, if applicable, consult
with the applicable Servicer as to the nature of any defaults by such Servicer
in the fulfillment of any of such Servicer's obligations. The obligations of a
Servicer under this Section apply to each Servicer that serviced a Mortgage Loan
during the applicable period, whether or not such Servicer is acting as a
Servicer at the time such Officer's Certificate is required to be delivered.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Not later than March 15th of each calendar year
commencing in 2006, each Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Depositor, the Rating Agencies, the Securities Administrator, the Master
Servicer and the Trustee a report stating that (i) it has obtained a letter of
representation regarding certain matters from the management of such Servicer
which includes an assertion that such Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Subservicers, upon comparable reports of firms of independent certified
public accountants rendered on the basis of examinations conducted in accordance
with the same standards (rendered within one year of such report) with respect
to those Subservicers. Promptly after receipt of such report, the Depositor
shall review such report and, if applicable, consult with the applicable
Servicer as to the nature of any defaults by such Servicer in the fulfillment of
any of such Servicer's obligations. The obligations of a Servicer under this
Section apply to each Servicer that serviced a Mortgage Loan during the
applicable period, whether or not such Servicer is acting as a Servicer at the
time such statement is required to be delivered.
Section 3.24 Master Servicer to Act as Servicer. (a) Subject to
Section 7.02, in the event that the Servicer shall for any reason no longer be
the Servicer hereunder (including by reason of an Event of Default), the Master
Servicer or its successor shall thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the Master
Servicer shall not be (i) liable for losses of such predecessor Servicer
pursuant to Section 3.10 or any acts or omissions of such predecessor Servicer
hereunder), (ii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including but not limited to repurchases or
substitutions pursuant to Section 2.03, (iii) responsible for expenses of such
predecessor Servicer pursuant to Section 2.03 or (iv) deemed to have made any
representations and warranties of such Servicer hereunder. Any such assumption
shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer
shall contain a provision giving the successor Servicer the option to
terminate such agreement in the event a successor Servicer is appointed.
(c) If any Servicer shall for any reason no longer be a Servicer
(including by reason of any Event of Default), the Master Servicer (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Master Servicer (or any other successor Servicer)
shall not incur any liability or have any obligations in its capacity as
successor Servicer under a Subservicing Agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of such Servicer thereunder; and such Servicer shall not thereby be
relieved of any liability or obligations under the Subservicing Agreement
arising prior to the date of such succession.
(d) The applicable Servicer shall, upon request of the Master
Servicer, but at the expense of such Servicer, deliver to the assuming party all
documents and records relating to each Subservicing Agreement (if any) to which
it is party and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of such Subservicing
Agreement to the assuming party.
Section 3.25 Compensating Interest. Each Servicer shall remit to the
Master Servicer on each Remittance Date for deposit in the Distribution Account
an amount from its own funds equal to the Compensating Interest payable by such
Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, each Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) Each Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans required to be serviced by it and the
related borrowers and shall provide all required notices thereunder.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
each Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans
serviced by such Servicer, which Scheduled Payments were not received as of the
close of business on the related Determination Date (provided, however, that
with respect to any Balloon Loan that is delinquent on its maturity date, the
applicable Servicer will not be required to advance the principal portion of the
related balloon payment but will be required to continue to make P&I Advances in
accordance with this Section 4.01(a) with respect to such Balloon Loan in an
amount equal to the assumed scheduled interest that would otherwise be due based
on the original amortization schedule for such Balloon Loan (with interest at
the Adjusted Net Mortgage Rate)), plus (ii) with respect to each REO Property
serviced by such Servicer, which REO Property was acquired during or prior to
the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the related Collection Account for
distribution on such Remittance Date.
(b) On each Remittance Date, each Servicer shall remit in
immediately available funds to the Master Servicer an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties serviced by such Servicer for the related Remittance
Date either (i) from its own funds or (ii) from the related Collection Account,
to the extent of funds held therein for future distribution (in which case, it
will cause to be made an appropriate entry in the records of the related
Collection Account that Amounts Held for Future Distribution have been, as
permitted by this Section 4.01, used by such Servicer in discharge of any such
P&I Advance) or (iii) in the form of any combination of (i) and (ii) aggregating
the total amount of P&I Advances to be made by such Servicer with respect to
such Mortgage Loans and REO Properties. Any Amounts Held for Future Distribution
and so used shall be appropriately reflected in such Servicer's records and
replaced by such Servicer by deposit in the related Collection Account on or
before any future Remittance Date to the extent required.
(c) The obligation of each Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by any Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by any Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Master Servicer.
(e) Except as otherwise provided herein, the applicable Servicer
shall be entitled to reimbursement pursuant to Section 3.11 for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.
(f) On each Remittance Date, the Master Servicer shall deposit in
the Distribution Account all funds remitted to it by the Servicers pursuant to
Sections 3.11(a)(i) and 3.25 and this Section 4.01. The Master Servicer may
retain or withdraw from the Distribution Account, (i) the Master Servicing Fee,
(ii) amounts necessary to reimburse it for any previously unreimbursed Advances
and any Advances the Master Servicer deems to be non recoverable from the
related Mortgage Loan proceeds, (iii) an amount to indemnify itself for amounts
due in accordance with this Agreement, and (iv) any other amounts that it is
entitled to receive hereunder for reimbursement, indemnification or otherwise.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall allocate from amounts then on deposit
in the Distribution Account in the following order of priority and to the extent
of the Available Funds remaining and, on such Distribution Date, shall make
distributions on the Certificates in accordance with such allocation:
(i) to the holders of each Class of LIBOR Certificates in the
following order of priority:
(A) from the Interest Remittance Amounts for both the Loan
Groups, to the Class A Certificates, the related Accrued Certificate
Interest Distribution Amounts and any related Unpaid Interest
Amounts for such Distribution Date, pursuant to the allocation set
forth in clauses (iv) and (v) of this Section 4.02(a);
(B) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(C) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(J) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date or
(2) with respect to which a Trigger Event is in effect, to the holders of
the related Class or Classes of LIBOR Certificates then entitled to
distributions of principal as set forth below, from amounts remaining on
deposit in the Distribution Account after making distributions pursuant to
clause (i) above, an amount equal to the Principal Distribution Amount in
the following order of priority:
(a) to the Class A Certificates, allocated as described in
Section 4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero; and
(b) sequentially to the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, until the respective Class Certificate
Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not in effect, to the holders
of the related Class or Classes of LIBOR Certificates then entitled to
distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(a) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02(c),
until the respective Class Certificate Balances thereof are reduced
to zero;
(b) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above and (y) the Class M-1 Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced to zero;
(c) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above and to the Class M-1 Certificates in clause (ii)(B)(b) above
and (y) the Class M-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(d) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above and
to the Class M-2 Certificates in clause (ii)(B)(c) above and (y) the
Class M-3 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(e) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above and to the
Class M-3 Certificates in clause (ii)(B)(d) above and (y) the Class
M-4 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(f) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above and to the Class M-4
Certificates in clause (ii)(B)(e) above and (y) the Class M-5
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(g) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above and to the Class M-5
Certificates in clause (ii)(B)(f) above and (y) the Class M-6
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(h) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above and to the Class M-6
Certificates in clause (ii)(B)(g) above and (y) the Class B-1
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(i) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above, to the Class M-6
Certificates in clause (ii)(B)(g) above and to the Class B-1
Certificates in clause (ii)(B)(h) above and (y) the Class B-2
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero; and
(j) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above, to the Class M-6
Certificates in clause (ii)(B)(g) above, to the Class B-1
Certificates in clause (ii)(B)(h) above and to the Class B-2
Certificates in clause (ii)(B)(i) above and (y) the Class B-3
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(C) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the holders of the Class M-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(E) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the holders of the Class M-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
(G) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the holders of the Class M-4 Certificates, any Unpaid
Realized Loss Amount for such Class;
(I) to the holders of the Class M-5 Certificates, any Unpaid
Interest Amount for such Class;
(J) to the holders of the Class M-5 Certificates, any Unpaid
Realized Loss Amount for such Class;
(K) to the holders of the Class M-6 Certificates, any Unpaid
Interest Amount for such Class;
(L) to the holders of the Class M-6 Certificates, any Unpaid
Realized Loss Amount for such Class;
(M) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(N) to the holders of the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(O) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(P) to the holders of the Class B-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(Q) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(R) to the holders of the Class B-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
(S) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(T) concurrently, (i) from any Interest Rate Cap Payments with
respect to the Group I Class A Cap Agreement on deposit in the
Excess Reserve Fund Account with respect to such Distribution Date,
an amount equal to any unpaid Basis Risk CarryForward Amount with
respect to the Class A-1ss and Class A-1mz Certificates, allocated
(a) first, between the Class A-1ss and Class A-1mz Certificates, pro
rata, based upon their respective Class Certificate Balances and (b)
second, any remaining amounts to the Class A-1ss and Class A-1mz
Certificates, pro rata, based on any Basis Risk CarryForward Amounts
remaining unpaid, in order to reimburse such unpaid amounts, (ii)
from any Interest Rate Cap Payments with respect to the Group II
Class A Cap Agreement on deposit in the Excess Reserve Fund Account
with respect to such Distribution Date, an amount equal to any
unpaid Basis Risk CarryForward Amount with respect to the Class
A-2a, Class A-2b and Class A-2c Certificates, allocated (a) first,
among the Class A-2a, Class A-2b and Class A-2c Certificates, pro
rata, based upon their respective Class Certificate Balances and (b)
second, any remaining amounts to the Class A-2a and Class A-2b
Certificates, pro rata, based on any Basis Risk CarryForward Amounts
remaining unpaid, in order to reimburse such unpaid amounts, (iii)
from any Interest Rate Cap Payments with respect to the Class M Cap
Agreement on deposit in the Excess Reserve Fund Account with respect
to such Distribution Date, an amount equal to any unpaid Basis Risk
CarryForward Amount with respect to the Class M Certificates,
allocated (a) first, among the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 and Class M-6 Certificates, pro rata, based
upon their respective Class Certificate Balances and (b) second, any
remaining amounts to the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class M-6 Certificates, pro rata, based on any Basis
Risk CarryForward Amounts remaining unpaid, in order to reimburse
such unpaid amounts, (iv) from any Interest Rate Cap Payments with
respect to the Class B Cap Agreement on deposit in the Excess
Reserve Fund Account with respect to such Distribution Date, an
amount equal to any unpaid Basis Risk CarryForward Amount with
respect to the Class B Certificates, allocated (a) first, among the
Class B-1, Class B-2 and Class B-3 Certificates, pro rata, based
upon their respective Class Certificate Balances and (b) second, any
remaining amounts to the Class B-1, Class B-2 and Class B-3
Certificates, pro rata, based on any Basis Risk CarryForward Amounts
remaining unpaid, in order to reimburse such unpaid amounts, and (v)
any remaining Interest Rate Cap Payments, to the holders of the
Class X Certificates pursuant to Section 4.02(a)(iii)(V);
(U) from funds on deposit in the Excess Reserve Fund Account
(not including any Interest Rate Cap Payments included in such
account) with respect to such Distribution Date, an amount equal to
any remaining Basis Risk CarryForward Amount with respect to the
LIBOR Certificates for such Distribution Date, allocated to the
LIBOR Certificates in the same order and priority in which the
Accrued Certificate Interest Distribution Amount is allocated among
such Classes of Certificates, with the allocation to the Class A
Certificates being (a) first, among the Class A Certificates, pro
rata, based on their respective Class Certificate Balances and (b)
second, any remaining amounts to the Class A Certificates, pro rata,
based on any Basis Risk CarryForward Amounts remaining unpaid, in
order to reimburse such unpaid amounts;
(V) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount and any remaining Interest Rate
Cap Payments not distributed pursuant to Sections
4.02(a)(iii)(A)-(U); and
(W) to the holders of the Class R Certificates, any remaining
amount;
(iv) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group I Mortgage Loans will be
allocated:
(a) first, concurrently, to the Class A-1ss and Class A-1mz
Certificates, pro rata (based on the amounts distributable or
payable under Section 4.02(a)(i)(A) to such Classes of
Certificates), the Accrued Certificate Interest Distribution Amount
and any Unpaid Interest Amount for the Class A-1ss and Class A-1mz
Certificates, respectively; and
(b) second, concurrently, to the Class A-2a, Class A-2b and
Class A-2c Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(A) to such Classes
of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2a, Class A-2b
and Class A-2c Certificates, respectively, to the extent not
otherwise previously paid from the Interest Remittance Amount
attributable to Group II Mortgage Loans.
(v) Solely for purposes of interest allocation calculations, the
Interest Remittance Amount attributable to Group II Mortgage Loans will be
allocated:
(a) first, concurrently, to the Class A-2a, Class A-2b and
Class A-2c Certificates, pro rata (based on the amounts
distributable or payable under Section 4.02(a)(i)(A) to such Classes
of Certificates), the Accrued Certificate Interest Distribution
Amount and any Unpaid Interest Amount for the Class A-2a, Class A-2b
and Class A-2c Certificates, respectively; and
(b) second, to the Class A-1ss and Class A-1mz Certificates,
pro rata (based on the amounts distributable or payable under
Section 4.02(a)(i)(A) to such Classes of Certificates), the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amount for the Class A-1ss and Class A-1mz Certificates,
respectively, to the extent not otherwise previously paid from the
Interest Remittance Amount attributable to Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive in full the related
Accrued Certificate Interest Distribution Amount or the related Unpaid Interest
Amount, if any, then such shortfall will be allocated to the Holders of such
Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Securities Administrator to the holders of the Class P
Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Class A Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, on a pro rata basis, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for such Distribution Date;
provided, however, that if the Class Certificate Balances of the Class A
Certificates in either Class A Certificate Group are reduced to zero, then the
remaining amount of principal distributions allocated to the Class A
Certificates on such Distribution Date, and the amount of such principal
distributions allocated on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their
respective Class Certificate Balances have been reduced to zero. Any
distributions of principal to the Group I Class A Certificates shall be made
first from Available Funds relating to the Group I Mortgage Loans, and any
distributions of principal to the Group II Class A Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
So long as a Sequential Trigger Event is not in effect, any
principal distributions allocated to the Group I Class A Certificates shall be
allocated pro rata between the Class A-1ss Certificates and the Class A-1mz
Certificates, based on their respective Class Certificate Balances, until their
respective Class Certificate Balances have been reduced to zero; provided,
however, that if a Sequential Trigger Event is in effect, any principal
distributions allocated to the Group I Class A Certificates shall be allocated
sequentially, first to the Class A-1ss Certificates, until their Class
Certificate Balance has been reduced to zero, and then to the Class A-1mz
Certificates, until their Class Certificate Balance has been reduced to zero.
Any principal distributions allocated to the Group II Class A
Certificates shall be allocated first to the Class A-2a Certificates, until
their Class Certificate Balance has been reduced to zero, then to the Class A-2b
Certificates, until their Class Certificate Balance has been reduced to zero,
and then to the Class A-2c Certificates, until their Class Certificate Balance
has been reduced to zero. Notwithstanding the foregoing, on and after the
Distribution Date on which the aggregate Class Certificate Balances of the
Subordinated Certificates and the principal balance of the Class X Certificates
have been reduced to zero, any principal distributions allocated to the Group II
Class A Certificates shall be allocated pro rata among the Classes of Group II
Class A Certificates, based on their respective Class Certificate Balances,
until their respective Class Certificate Balances have been reduced to zero.
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Securities Administrator as a reduction in the following order:
(1) First, to the amount of interest payable to the
Class X Certificates; and
(2) Second, pro rata, as a reduction of the Accrued
Certificate Interest Distribution Amount for the Class A,
Class M and Class B Certificates, based on the amount of
interest to which such Classes would otherwise be entitled.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder, the Servicers, the Depositor and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk
CarryForward Amount for such Distribution Date and the amount of all Basis
Risk CarryForward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk CarryForward Amount not covered by
amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of Expense Fees paid to or retained by the
Servicers, the Master Servicer or the Securities Administrator (stated
separately and in the aggregate) with respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of P&I Advances included in the distribution on
such Distribution Date and the aggregate amount of P&I Advances reported
by the Servicers as outstanding as of the close of business on such
Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xi) the total number and aggregate principal balance of any REO
Properties (and market value, if available) as of the close of business on
the Determination Date preceding such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation thereof and the aggregate outstanding balance
of all 60+ Day Delinquent Mortgage Loans), and whether a Sequential
Trigger Event has occurred and is continuing;
(xiii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xiv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xv) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Unpaid Interest Amounts;
(xvi) the Subordinated Amount and Specified Subordinated Amount;
(xvii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicers;
(xviii) the Interest Rate Cap Payments (stated separately), if any,
for such Distribution Date;
(xix) the Cumulative Loss Percentage; and
(xx) other reasonably requested information.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, each Rating Agency, the Trustee and
the Depositor is limited to the availability, timeliness and accuracy of the
information derived from the Master Servicer, the Servicers and the Responsible
Parties. The Securities Administrator will provide the above statement via the
Securities Administrator's internet website. The Securities Administrator's
website will initially be located at xxxxx://xxx.xxxxxxx.xxx and assistance in
using the website can be obtained by calling the Securities Administrator's
investor relations desk at (000) 000-0000. A paper copy of the statement will
also be made available upon request.
(c) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall cause to be furnished to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(i) and (a)(ii) of
this Section 4.03 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect.
The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
(d) Not later than the Determination Date for each Distribution Date
(in the case of HomEq), and not later than the 15th day of the month in which
each Distribution Date occurs (in the case of Countrywide), each Servicer shall
furnish to the Depositor, the Securities Administrator and the Master Servicer a
monthly remittance advice statement (in a format mutually agreed upon by such
Servicer and the Securities Administrator) containing such information as shall
be reasonably requested by the Master Servicer to enable the Master Servicer to
provide the reports required by Section 4.03(a) as to the accompanying
remittance and the period ending on the close of business on the last day of the
related Prepayment Period (the "Servicer Remittance Report").
The Servicer Remittance Report shall document, on such Determination
Date of 15th day of the month, as applicable, Mortgage Loan payment activity on
an individual Mortgage Loan basis as follows:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, received during the related prepayment period along
with a detailed report of interest on principal prepayment amounts
remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by such Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate expenses reimbursed to such Servicer during the
prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days, (3) 91
days or more; (b) as to which foreclosure or bankruptcy proceedings of the
related mortgagor have commenced; and (c) as to which REO Property has
been acquired.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with the
definition of LIBOR. Until all of the LIBOR Certificates are paid in full, the
Securities Administrator will at all times retain at least four Reference Banks
for the purpose of determining LIBOR with respect to each LIBOR Determination
Date. The Securities Administrator initially shall designate the Reference Banks
(after consultation with the Depositor). Each "Reference Bank" shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Securities Administrator and shall have an established place
of business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Securities Administrator should terminate its
appointment as Reference Bank, the Securities Administrator shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Securities Administrator shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Securities Administrator on
each LIBOR Determination Date so long as the LIBOR Certificates are outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good-faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the definition
of LIBOR. The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Securities Administrator
to the most junior Class of Subordinated Certificates then outstanding in
reduction of the Class Certificate Balance thereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Securities Administrator shall transfer the Class X and Class
P Certificates in the name of the NIM Trustee, or such other name or names as
the Depositor shall request, and to deliver the Class X and Class P Certificates
to the NIM Trustee or to such other Person or Persons as the Depositor shall
request.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such holder at a bank or other entity having appropriate facilities therefor, if
such Holder has so notified the Securities Administrator at least five Business
Days prior to the related Record Date or (y) by check mailed by first class mail
to such Certificateholder at the address of such holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Securities
Administrator shall bind the Securities Administrator, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless authenticated
by the Securities Administrator by manual signature, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Securities Administrator shall authenticate the Certificates to be
issued at the direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in accordance with the provisions of Section 5.06, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate, and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the holder thereof
or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Securities Administrator shall be entitled to rely
solely upon a written notice to such effect from the Depositor. Except with
respect to (i) the transfer of the Class X, Class P or Class R Certificates to
the Depositor or an Affiliate of the Depositor, (ii) the transfer of the Class X
or Class P Certificates to the NIM Issuer or the NIM Trustee, or (iii) a
transfer of the Class X or Class P Certificates from the NIM Issuer or the NIM
Trustee to the Depositor or an Affiliate of the Depositor, in the event that a
transfer of a Private Certificate which is a Physical Certificate is to be made
in reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Securities Administrator
in writing the facts surrounding the transfer in substantially the form set
forth in Exhibit H (the "Transferor Certificate") and either (i) there shall be
delivered to the Securities Administrator a letter in substantially the form of
Exhibit I (the "Rule 144A Letter") or (ii) there shall be delivered to the
Securities Administrator at the expense of the transferor an Opinion of Counsel
that such transfer may be made without registration under the Securities Act. In
the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate. The Depositor shall
provide to any Holder of a Private Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Securities
Administrator and the Servicers shall cooperate with the Depositor in providing
the Rule 144A information referenced in the preceding sentence, including
providing to the Depositor such information regarding the Certificates, the
Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall
reasonably request to meet its obligation under the preceding sentence. Each
Holder of a Private Certificate desiring to effect such transfer shall, and does
hereby agree to, indemnify the Securities Administrator, the Depositor and each
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
Except with respect to (i) the transfer of the Class R, Class X or
Class P Certificates to the Depositor or an affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, no
transfer of an ERISA-Restricted Certificate shall be made unless the Securities
Administrator shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Securities Administrator (in the event such Certificate is a
Private Certificate or a Residual Certificate, such requirement is satisfied
only by the Securities Administrator's receipt of a representation letter from
the transferee substantially in the form of Exhibit I), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section 406
of ERISA, a plan subject to Section 4975 of the Code or a plan subject to any
Federal, state or local law ("Similar Law") materially similar to the foregoing
provisions of ERISA or the Code, nor a person acting on behalf of any such plan
or arrangement nor using the assets of any such plan or arrangement to effect
such transfer, or (ii) in the case of an ERISA-Restricted Certificate other than
a Residual Certificate or a Class P Certificate that has been the subject of an
ERISA-Qualifying Underwriting, and the purchaser is an insurance company, a
representation that the purchaser is an insurance company that is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in the
case of any such ERISA-Restricted Certificate other than a Residual Certificate
or Class P Certificate presented for registration in the name of an employee
benefit plan subject to Title I of ERISA, a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense of
the Securities Administrator, the Servicers, the Depositor or the Trust Fund,
addressed to the Securities Administrator, to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Depositor, the Master
Servicer or the Securities Administrator to any obligation in addition to those
expressly undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is not
a Private Certificate or a Residual Certificate, in the event the representation
letter referred to in the preceding sentence is not furnished, such
representation shall be deemed to have been made to the Securities Administrator
by the transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, (a) any purported transfer of an ERISA-Restricted Certificate, other
than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Securities Administrator of an Opinion of Counsel satisfactory
to the Securities Administrator as described above shall be void and of no
effect and (b) any purported transfer of a Class P Certificate or Residual
Certificate to a transferee that does not make the representation in clause (i)
above shall be void and of no effect.
Neither the Securities Administrator nor the Trustee shall have any
duty to monitor transfers of beneficial interests in any Book-Entry Certificate,
and the Securities Administrator shall be under no liability to any Person for
any registration of transfer of any ERISA Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Securities Administrator in accordance with the foregoing
requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, Securities
Administrator or agent in connection with any Transfer of a Residual
Certificate and (C) not to Transfer its Ownership Interest in a Residual
Certificate or to cause the Transfer of an Ownership Interest in a
Residual Certificate to any other Person if it has actual knowledge that
such Person is a Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Securities Administrator shall
not have any liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Securities Administrator shall
be entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact a Non-Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became a Non-Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by the Securities
Administrator shall be paid and delivered by the Securities Administrator
to the last preceding Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund or
the Securities Administrator, to the effect that the elimination of such
restrictions will not cause either the Lower Tier REMIC or the Upper Tier REMIC
hereunder to fail to qualify as a REMIC at any time that the Certificates are
outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Residual Certificate hereby consents to any amendment of
this Agreement which, based on an Opinion of Counsel furnished to the Securities
Administrator, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Residual Certificate is not transferred,
directly or indirectly, to a Person that is a Non-Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Residual Certificate which is
held by a Person that is a Non-Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Securities Administrator except to another Depository; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Securities
Administrator shall deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of the
Book-Entry Certificates for purposes of exercising the rights of holders under
this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Securities Administrator
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the Depositor notifies the Depository (and the Securities Administrator
consents) of its intent to terminate the book-entry system through the
Depository, and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Securities Administrator
shall notify all Certificate Owners, through the Depository, of the occurrence
of any such event and of the availability of definitive, fully-registered
Certificates (the "Definitive Certificates") to Certificate Owners requesting
the same. Upon surrender to the Securities Administrator of the related Class of
Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Securities Administrator shall issue the
Definitive Certificates. None of the Servicers, the Depositor or the Securities
Administrator shall be liable for any delay in delivery of such instruction and
each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Securities Administrator with an
adequate inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Securities Administrator in accordance with its customary practice. No
service charge shall be made for any registration of transfer or exchange of
Private Certificates, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator, or
the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Servicers, the Securities Administrator and the Trustee such
security or indemnity as may be required by them to hold each of them harmless,
then, in the absence of notice to the Securities Administrator that such
Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
5.03 shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicers, the Securities
Administrator, the Trustee, the Depositor, and any agent of a Servicer, the
Securities Administrator, the Depositor, or the Trustee may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and none of the Servicers, the Securities
Administrator, the Trustee, the Depositor, or any agent of a Servicer, the
Securities Administrator, the Depositor, or the Trustee shall be affected by any
notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor or a Servicer shall request such information in
writing from the Securities Administrator, then the Securities Administrator
shall, within ten Business Days after the receipt of such request, provide the
Depositor, such Servicer or the Certificateholders at such recipients' expense
the most recent list of the Certificateholders of such Trust Fund held by the
Securities Administrator, if any. The Depositor and every Certificateholder, by
receiving and holding a Certificate, agree that the Securities Administrator
shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator initially designates the offices for registration of transfer or
exchange purposes located at Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479, Attention: Corporate Trust Services - MSM 2005-HE3. The
Securities Administrator shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers. The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.
The Depositor and each of the Servicers will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or a Servicer shall be a party, or any person succeeding to the
business of the Depositor or a Servicer, shall be the successor of the Depositor
or such Servicer, as the case may be, hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person to such Servicer shall be qualified to service
mortgage loans on behalf of, Xxxxxx Xxx or Freddie Mac.
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others. Neither the Depositor, the Servicers nor any of their directors,
officers, employees or agents of the Depositor shall be under any liability to
the Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicers or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicers or any such Person
from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, each Servicer and any director,
officer, employee or agent of the Depositor and each Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor and its
Affiliates, the Purchaser, each Servicer and any director, officer, employee or
agent of the Depositor, the Purchaser or each Servicer shall be indemnified by
the Trust Fund and held harmless against any loss, liability or expense incurred
in connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Certificates other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence (or gross negligence in the case of the Depositor) in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor any Servicer shall
be under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its respective duties hereunder and which in its opinion
may involve it in any expense or liability; provided, however, that each of the
Depositor and each Servicer may in its discretion undertake any such action (or
direct the Trustee to undertake such actions pursuant to Section 2.03 for the
benefit of the Certificateholders) that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the applicable Servicer shall be entitled to be reimbursed
therefor out of the applicable Collection Account.
Section 6.04 Limitation on Resignation of a Servicer. Subject to
Sections 7.01 and 10.07, no Servicer shall assign this Agreement or resign from
the obligations and duties hereby imposed on it except by mutual consent of the
Servicers, the Depositor and the Master Servicer or upon the determination that
its duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by a Servicer. Any such determination permitting the
resignation of a Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Depositor and the Master Servicer which Opinion of
Counsel shall be in form and substance acceptable to the Depositor and the
Master Servicer. No such resignation shall become effective until a successor
shall have assumed such Servicer's responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that a Servicer determines that it will no longer engage
in the business of servicing mortgage loans, such Servicer may assign its rights
under this Agreement, provided that, (i) the Depositor in its sole discretion
has consented, which consent shall not be unreasonably withheld, (ii) the Rating
Agencies' ratings of the Certificates in effect immediately prior to such action
will not be qualified, reduced or withdrawn as a result thereof (as evidenced by
a letter to such effect from the Rating Agencies) and (iii) such Servicer shall
be liable for all costs and expenses associated with the transfer of servicing,
provided further, that such Servicer shall indemnify and hold each of the Trust
Fund, the Master Servicer, the Custodian, the Depositor, the other Servicers
hereunder, any sub-servicer, the successor Servicer and each Certificateholder
harmless against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and any other costs, fees
and expenses that such party may sustain in any way related to such assignment
except with respect to a successor Xxxxxxxx's failure to comply with the terms
of this Agreement. No assignment by such Servicer shall become effective until a
successor Servicer acceptable to the Depositor and the Master Servicer shall
have assumed in writing such Servicer's responsibilities, duties, liabilities
(other than those liabilities arising prior to the appointment of such
successor) and obligations under this Agreement. Any such assignment shall not
relieve a Servicer of responsibility for any of the obligations specified herein
except to the extent that such responsibilities have been expressly assumed by
the successor Servicer.
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims. Each Servicer, severally and not jointly, shall indemnify the
Depositor, the Purchaser, the Securities Administrator and the Trustee and any
director, officer, employee or agent of the Depositor, the Purchaser or the
Trustee and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any breach by such Servicer, of (i) any of its
representations and warranties referred to in Section 2.03(a), (ii) any error in
any tax or information return prepared by such Servicer or (iii) the failure of
such Servicer to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement. The applicable Servicer immediately shall
notify the Depositor, the Securities Administrator and the Trustee if such claim
is made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the prior written consent of the Depositor and the Securities
Administrator) the defense of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the Depositor,
the applicable Responsible Party, the Securities Administrator or the Trustee in
respect of such claim. This indemnity shall survive the termination of this
Agreement or the earlier resignation or removal of each Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means, with respect to each Servicer individually, any one of the
following events:
(a) any failure by a Servicer to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been given
to such Servicer by the Depositor or by the Master Servicer or to such Servicer,
the Depositor and the Master Servicer by Certificateholders entitled to at least
25% of the Voting Rights in the Certificates; or
(b) any failure on the part of a Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
such Servicer set forth in this Agreement which continues unremedied for a
period of sixty (60) days (except that (x) such number of days shall be fifteen
in the case of a failure to pay any premium for any insurance policy required to
be maintained under this Agreement and (y) such number of days shall be ten in
the case of a failure to observe or perform any of the obligations set forth in
Sections 3.22, 3.23 or 8.12) after the earlier of (i) the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to such Servicer by the Depositor or by the Master Servicer, or to such
Servicer, the Depositor and the Master Servicer by Certificateholders entitled
to at least 25% of the Voting Rights in the Certificates and (ii) actual
knowledge of such failure by a Servicing Officer of such Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against a Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) a Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to a
Servicer or of or relating to all or substantially all of its property; or
(e) a Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) a breach of any representation and warranty of a Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to such Servicer by the Master Servicer or the Depositor, or to such Servicer,
the Master Servicer and the Depositor by Certificateholders entitled to at least
25% of the Voting Rights in the Certificates; or
(g) either (i) with respect to Countrywide, any withdrawal or
downgrade of two or more levels (i.e., from "Above Average" to "Below Average"
or the equivalent) of the servicer rating, as of the Closing Date, of such
Servicer by any Rating Agency which results in a downgrade, qualification or
withdrawal of the rating assigned to any Class of Certificates by any Rating
Agency or (ii) with respect to HomEq, Fitch reduces its servicer rating of HomEq
to "RPS2" or lower, Xxxxx'x reduces its servicer rating of HomEq to "SQ3" or
lower, or S&P reduces its servicer rating of HomEq to "Average" or lower.
If an Event of Default described in clauses (a) through (g) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Master Servicer may, and at
the direction of a majority of the Voting Rights, the Master Servicer shall, by
notice in writing to the applicable Servicer (with a copy to each Rating
Agency), terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the Mortgage Loans serviced by such Servicer and the
proceeds thereof, other than its rights as a Certificateholder hereunder;
provided, however, that the Master Servicer shall not be required to give
written notice to such Servicer of the occurrence of an Event of Default
described in clauses (b) through (g) of this Section 7.01 unless and until a
Responsible Officer of the Master Servicer has actual knowledge of the
occurrence of such an event. In the event that a Responsible Officer of the
Master Servicer has actual knowledge of the occurrence of an event of default
described in clause (a) of this Section 7.01, the Master Servicer shall give
written notice to the applicable Servicer of the occurrence of such an event
within one Business Day of the first day on which such Responsible Officer
obtains actual knowledge of such occurrence; provided, that if such failure is
the failure to make a P&I Advance, the Master Servicer shall send such notice
prior to 12:00 noon New York time on the Distribution Date and, if the Event of
Default of such Servicer was the failure to make a P&I Advance, the Master
Servicer, as successor Servicer, shall make such P&I Advance on the Distribution
Date that such notice was delivered. On and after the receipt by such Servicer
of such written notice, all authority and power of such Servicer hereunder,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Master Servicer. Subject to Section 7.02, the Master Servicer is
hereby authorized and empowered to execute and deliver, on behalf of such
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of such Servicer to pay
amounts owed pursuant to Article VIII. Such Servicer agrees to cooperate with
the Master Servicer in effecting the termination of such Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Master Servicer of all cash amounts which shall at the time be
credited to the Collection Account of such predecessor Servicer, or thereafter
be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of a Servicer
hereunder, such Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Master Servicer to Act; Appointment of Successor. On
and after the time a Servicer receives a notice of termination pursuant to
Section 3.24 or Section 7.01, the Master Servicer shall, subject to and to the
extent provided in Section 3.05, be the successor to such Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on such Servicer by the terms and provisions
hereof and applicable law including the obligation to make P&I Advances or
Servicing Advances pursuant to Section 3.24 or Section 7.01. As compensation
therefor, the Master Servicer shall be entitled to all funds relating to the
Mortgage Loans that such Servicer would have been entitled to charge to its
Collection Account if such Servicer had continued to act hereunder including, if
such Servicer was receiving the Servicing Fee, the Servicing Fee and the income
on investments or gain related to its Collection Account and the Distribution
Account which such Servicer would be entitled to receive (in addition to income
on investments or gain related to the Distribution Account for the benefit of
the Master Servicer during the Master Servicer Float Period). Notwithstanding
the foregoing, if the Master Servicer has become the successor to such Servicer
in accordance with Section 7.01, the Master Servicer may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01, if it is otherwise
unable to so act or at the written request of Certificateholders entitled to at
least a majority of the Voting Rights, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to such Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of such Servicer hereunder. Any successor to such Servicer shall be
an institution which is a Xxxxxx Xxx and Freddie Mac approved servicer in good
standing, which has a net worth of at least $30,000,000, which is willing to
service the Mortgage Loans and which executes and delivers to the Depositor and
the Master Servicer an agreement accepting such delegation and assignment,
containing an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of such terminated Servicer (other
than liabilities of such terminated Servicer under Section 6.03 incurred prior
to termination of such Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; provided, that each Rating Agency
acknowledges that its rating of the Certificates in effect immediately prior to
such assignment and delegation will not be qualified or reduced, as a result of
such assignment and delegation. Pending appointment of a successor to a Servicer
hereunder, the Master Servicer, unless the Master Servicer is prohibited by law
from so acting, shall, subject to Section 3.05, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Master Servicer may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of the
Servicing Fee Rate and amounts paid to the predecessor Servicer from
investments. The Master Servicer and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Master Servicer nor any other successor Servicer shall
be deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the predecessor Servicer to
deliver or provide, or any delay in delivering or providing, any cash,
information, documents or records to it.
Notwithstanding the foregoing, the parties hereto agree that the
Master Servicer, in its capacity as successor Servicer, immediately will assume
all of the obligations of the Servicer to make Advances and the Master Servicer
will assume the other duties of the Servicer as soon as practicable, but in no
event later than 90 days after the Master Servicer becomes successor Servicer
pursuant to the preceding paragraph. Notwithstanding the foregoing, the Master
Servicer, in its capacity as successor Servicer, shall not be responsible for
the lack of information and/or documents that it cannot obtain through
reasonable efforts.
In the event that a Servicer is terminated pursuant to Section 7.01,
such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the related Servicing Files to a successor Servicer
(excluding set-up costs and other administrative expenses of the successor
Servicer), and in all other cases the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Master Servicer is the predecessor Servicer (except in the
case where the Master Servicer in its role as successor Servicer is being
terminated pursuant to Section 7.01 by reason of an Event of Default caused
solely by the Master Servicer as the successor Servicer and not by the
predecessor Servicer's actions or omissions), such costs shall be paid by the
prior terminated Servicer promptly upon presentation of reasonable documentation
of such costs.
Any successor to a Servicer as servicer shall give notice to the
related Mortgagors of such change of servicer and shall, during the term of its
service as servicer, maintain in force the policy or policies that each Servicer
is required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders and
to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders and
each Rating Agency notice of each such Event of Default hereunder known to the
Securities Administrator, unless such event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of a Master Servicer Event of Default and after the curing of all
Master Servicer Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case a Master Servicer Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) Unless a Master Servicer Event of Default of which a Responsible
Officer of the Trustee obtains actual knowledge has occurred and is continuing,
the duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable except for
the performance of the duties and obligations specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee, and the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming on their face
to the requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities respecting any
matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodian. Except as otherwise provided in Section 8.01: (a) the Trustee and the
Custodian may request and rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties and neither the Trustee nor the Custodian shall have
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(b) the Trustee and the Custodian may consult with counsel,
financial advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c) neither the Trustee nor the Custodian shall be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder; provided further, the Trustee shall not
be responsible for any act or omission of the Custodian;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement;
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of a Master Servicer Event of Default or an Event of Default,
the Trustee shall not be deemed to have knowledge of a Master Servicer Event of
Default or an Event of Default, until a Responsible Officer of the Trustee shall
have received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Depositor, the Master Servicer, the Securities Administrator
or a Servicer of any funds paid to the Master Servicer, the Securities
Administrator, the Depositor or a Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from any Collection Account or the Distribution
Account by the Depositor, the Master Servicer, the Securities Administrator or a
Servicer.
The Trustee and the Master Servicer shall have no responsibility (i)
for filing or recording any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder (unless the Trustee shall have
become and remains the successor Master Servicer) (ii) to see to any insurance
(unless the Trustee shall have become the successor Master Servicer), or (iii)
to confirm or verify the contents of any reports or certificates of the
Servicers, Securities Administrator or Master Servicer delivered to the Trustee
pursuant to this Agreement believed by the Trustee to be genuine and to have
been signed or presented by the proper party or parties.
The Securities Administrator executes the Certificates not in its
individual capacity but solely as Securities Administrator of the Trust Fund
created by this Agreement, in the exercise of the powers and authority conferred
and vested in it by this Agreement. Each of the undertakings and agreements made
on the part of the Securities Administrator on behalf of the Trust Fund in the
Certificates is made and intended not as a personal undertaking or agreement by
the Trustee but is made and intended for the purpose of binding only the Trust
Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be paid its fee by the Master
Servicer from the Master Servicer's own funds pursuant to a separate fee
schedule. The Trustee shall have no lien on the Trust Fund for the payment of
such fees. The Trustee and any director, officer, employee, or agent of the
Trustee shall be indemnified by the Trust Fund against any loss, liability, or
expense (including reasonable attorney's fees) resulting from any error in any
tax or information return prepared by any Servicer or incurred in connection
with any claim or legal action relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement, other than any loss, liability, or expense (i) resulting from any
breach of any Servicer's obligations in connection with this Agreement for which
the related Servicer has performed its obligation to indemnify the Trustee
pursuant to Section 6.05, (ii) resulting from any breach of any Responsible
Party's obligations in connection with this Agreement for which the related
Responsible Party has performed its obligations to indemnify the Trustee
pursuant to Section 2.03(o), (iii) resulting from any breach of the Master
Servicer's obligations hereunder for which the Master Servicer has performed its
obligation to indemnify the Trustee pursuant to this Agreement, or (iv) incurred
because of willful misconduct, bad faith, or negligence in the performance of
any of the Trustee's duties under this Agreement. This indemnity shall survive
the termination of this Agreement or the resignation or removal of the Trustee
under this Agreement. Without limiting the foregoing, except as otherwise agreed
upon in writing by the Depositor and the Trustee, and except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misconduct, the Trust Fund shall pay or reimburse the Trustee, for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates, and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other expenses incurred by the Trustee; provided, however,
no expense shall be reimbursed hereunder if it would not constitute an
"unanticipated expense incurred by the REMIC" within the meaning of the REMIC
Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates or the Servicers and their affiliates;
provided, however, that such entity cannot be an affiliate of the Depositor or a
Servicer other than the Trustee in its role as successor to the Master Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Securities Administrator,
the Master Servicer and each Rating Agency not less than 60 days before the date
specified in such notice, when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to each Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to each Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicers an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicers and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the applicable Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
applicable Servicer and the Trustee may consider appropriate. If any Servicer
shall not have joined in such appointment within 15 days after the receipt by
such Servicer of a request to do so or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee (as successor Master
Servicer) under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to a Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the applicable Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee
or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
the Lower Tier REMIC and Upper Tier REMIC and that in such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit (REMIC) Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to the Lower Tier REMIC
and Upper Tier REMIC containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby;
(b) within thirty days of the Closing Date, apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for all tax entities and shall also furnish to the
Internal Revenue Service, on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC and the Upper
Tier REMIC be treated as a REMIC on the federal tax return for its first taxable
year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is a Non-Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of each of the Upper Tier REMIC and Lower Tier REMIC as a
REMIC under the REMIC Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of either the
Lower Tier REMIC or the Upper Tier REMIC created hereunder;
(h) not permit the creation of any interests in such REMIC other
than the Regular and Residual Certificates;
(i) not receive any amount representing a fee or other compensation
for services (except as otherwise permitted by this Agreement);
(j) receive any income attributable to any asset which is neither a
"qualified mortgage" nor a "permitted investment" within the meaning of the
REMIC Provisions;
(k) not receive any contributions to such REMIC after the Startup
Day that would be subject to tax under Section 860G(d) of the Code;
(l) not dispose of any assets of such REMIC at a gain if such
disposition would be a "prohibited transaction" within the meaning of Section
860F(a)(2) of the Code;
(m) pay, from the sources specified in the penultimate paragraph of
this Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on the Lower Tier REMIC and the
Upper Tier REMIC created hereunder before its termination when and as the same
shall be due and payable (but such obligation shall not prevent the Securities
Administrator or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Securities Administrator from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings);
(n) cause federal, state or local income tax or information returns
to be signed by the Securities Administrator or, if required by applicable tax
law, the Trustee or such other person as may be required to sign such returns by
the Code or state or local laws, regulations or rules; and
(o) maintain records relating to the Lower Tier REMIC and the Upper
Tier REMIC created hereunder, including the income, expenses, assets, and
liabilities thereof on a calendar year basis and on the accrual method of
accounting and the fair market value and adjusted basis of the assets determined
at such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information.
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for the Lower Tier REMIC and the
Upper-Tier REMIC, within the meaning of Treasury Regulations Section
1.860F-4(d), and the Securities Administrator is hereby designated as agent of
such Certificateholder for such purpose (or if the Securities Administrator is
not so permitted, such Holder shall be the Tax Matters Person in accordance with
the REMIC Provisions). In such capacity, the Securities Administrator shall, as
and when necessary and appropriate, represent the Lower Tier REMIC and the Upper
Tier REMIC created hereunder in any administrative or judicial proceedings
relating to an examination or audit by any governmental taxing authority,
request an administrative adjustment as to any taxable year of the Lower Tier
REMIC and the Upper Tier REMIC created hereunder, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of the Lower Tier REMIC and the Upper Tier
REMIC created hereunder, and otherwise act on behalf of each REMIC in relation
to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to Prepayment Charges, the rights of the Class X
Certificateholders to receive Interest Rate Cap Payments and amounts in the
Excess Reserve Fund Account (subject to the obligation to pay Basis Risk
CarryForward Amounts) and the rights of the LIBOR Certificateholders to receive
Basis Risk CarryForward Amounts as the beneficial ownership of interests in a
grantor trust, and not as an obligation of either the Lower Tier REMIC or Upper
Tier REMIC created hereunder, for federal income tax purposes. The Securities
Administrator shall file or cause to be filed with the Internal Revenue Service
Form 1041 or such other form as may be applicable and shall furnish or cause to
be furnished to the Class P, Class X and LIBOR Certificateholders the respective
amounts described above that are received, in the time or times and in the
manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value to each Class
of Certificates of the right to receive Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account. Thereafter, the Depositor shall provide to the
Securities Administrator promptly upon written request therefor any additional
information or data that the Securities Administrator may, from time to time,
reasonably request to enable the Securities Administrator to perform its duties
under this Agreement; provided, however, that the Depositor shall not be
required to provide (x) any information regarding the Mortgage Loans after the
Closing Date (except for Mortgage Loan information as of the Cut-off Date in the
Depositor's possession) or (y) any information that is in a Servicer's
possession. The Depositor hereby indemnifies the Securities Administrator for
any losses, liabilities, damages, claims, or expenses of the Securities
Administrator arising from any errors or miscalculations of the Securities
Administrator that result from any failure of the Depositor to provide pursuant
to this paragraph accurate information or data to the Securities Administrator
on a timely basis.
None of the Servicers, Master Servicer, Trustee or Securities
Administrator shall knowingly or intentionally take any action, cause the Trust
Fund to take any action or fail to take (or fail to cause to be taken) any
action reasonably within its control and the scope of duties more specifically
set forth herein, that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of either the Lower-Tier REMIC or
the Upper-Tier REMIC as a REMIC or (ii) result in the imposition of a tax upon
either the Lower-Tier REMIC or the Upper-Tier REMIC or the Trust Fund (including
but not limited to the tax on "prohibited transactions" as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code, or the tax on "net income from foreclosure
property") unless the Trustee and the Securities Administrator receives an
Opinion of Counsel (at the expense of the party seeking to take such action or,
if such party fails to pay such expense, and the Securities Administrator
determines that taking such action is in the best interest of the Trust Fund and
the Certificateholders, at the expense of the Trust Fund, but in no event at the
expense of the Trustee or the Securities Administrator) to the effect that the
contemplated action will not, with respect to the Trust Fund, the Lower-Tier
REMIC or the Upper-Tier REMIC created hereunder, endanger such status or, unless
the Trustee determines in its sole discretion to indemnify the Trust Fund
against such tax, result in the imposition of such a tax).
If any tax is imposed on "prohibited transactions" of either the
Lower Tier REMIC or the Upper Tier REMIC created hereunder as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of the
Lower Tier REMIC as defined in Section 860G(c) of the Code, on any contribution
to either the Lower Tier REMIC or Upper Tier REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on either REMIC pursuant to Sections 23153 and 24874 of
the California Revenue and Taxation Code, if not paid as otherwise provided for
herein, the tax shall be paid by (i) the Trustee, the Master Servicer or the
Securities Administrator, as applicable, if such tax arises out of or results
from negligence of the Trustee, the Master Servicer or the Securities
Administrator, as applicable, in the performance of any of its obligations under
this Agreement, (ii) the applicable Responsible Party if such tax arises out of
or results from the applicable Responsible Party's obligation to repurchase a
Mortgage Loan pursuant to Section 2.03, (iii) the applicable Servicer, in the
case of any such minimum tax, and otherwise if such tax arises out of or results
from a breach by such Servicer of any of its obligations under this Agreement or
(iv) in all other cases, or if the Trustee, the Master Servicer, the Securities
Administrator, the applicable Servicer or the applicable Responsible Party fails
to honor its obligations under the preceding clauses (i), (ii) or (iii), any
such tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.02(a).
For as long as each REMIC shall exist, the Securities Administrator
shall act as specifically required herein, and the Securities Administrator
shall comply with any directions of the Depositor or a Servicer stating that
such directions are being given to assure such continuing treatment of each
REMIC as a REMIC. In particular, the Securities Administrator shall not (a) sell
or authorize the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
purchase or repurchase of the Mortgage Loans pursuant to this Agreement and (b)
accept any contribution to either REMIC after the Startup Day without receipt of
an Opinion of Counsel.
Section 8.12 Periodic Filings. (a) The Securities Administrator and
each Servicer shall reasonably cooperate with the Depositor in connection with
the Trust's satisfying the reporting requirements under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The Securities Administrator shall
prepare on behalf of the Trust any Forms 8-K and 10-K customary for similar
securities as required by the Exchange Act and the Rules and Regulations of the
Securities and Exchange Commission thereunder, and the Securities Administrator
shall sign and file (via the Securities and Exchange Commission's Electronic
Data Gathering and Retrieval System) such Forms on behalf of the Depositor, if
an officer of the Depositor signs the Certification (as defined below), or
otherwise on behalf of the Trust. In the event the Securities Administrator is
signing on behalf of the Depositor pursuant to the preceding sentence, the
Depositor hereby grants to the Securities Administrator a limited power of
attorney to execute and file each such document on behalf of the Depositor. Such
power of attorney shall continue until either the earlier of (i) receipt by the
Securities Administrator from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust. Notwithstanding the
foregoing, the Securities Administrator shall prepare such Form to be signed by
the Depositor and the Depositor shall sign such Form, unless the Securities and
Exchange Commission has indicated that it will accept a Certification signed by
the Depositor where the related Form 10-K is signed by the Securities
Administrator on behalf of the Depositor.
(b) Each Form 8-K shall be filed by the Securities Administrator
within 15 days after each Distribution Date, including a copy of the statement
to the Certificateholders for such Distribution Date as an exhibit thereto.
Prior to March 30th of each year (or such earlier date as may be required by the
Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission), the Securities Administrator shall file a Form 10-K, in substance
as required by applicable law or applicable Securities and Exchange Commission
staff's interpretations. Such Form 10-K shall include as exhibits each
Servicer's annual statement of compliance described under Section 3.22 and the
accountant's report described under Section 3.23, in each case to the extent
they have been timely delivered to the Securities Administrator. If they are not
so timely delivered, the Securities Administrator shall file an amended Form
10-K including such documents as exhibits reasonably promptly after they are
delivered to the Securities Administrator. The Securities Administrator shall
have no liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Securities Administrator's
inability or failure to obtain any information not resulting from its own
negligence, willful misconduct or bad faith. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit L, with such changes as may
be necessary or appropriate as a result of changes promulgated by the Securities
and Exchange Commission (the "Certification"), which shall, except as described
below, be signed by the senior officer of the Depositor in charge of
securitization. Notwithstanding the foregoing, if it is determined by the
Depositor that the Certification may be executed by multiple persons, the
Securities Administrator shall sign the Certification in respect of items 1
through 3 thereof and each Servicer shall cause the senior officer in charge of
servicing at such Servicer to sign the Certification in respect of items 4 and 5
thereof solely with respect to such Servicer and the Securities Administrator
may rely on the Certification signed by such Servicer to the same extent as
provided in subsection (c) below.
(c) In the event the Certification is to be signed by an officer of
the Depositor, the Securities Administrator shall sign a certification (in the
form attached hereto as Exhibit M, with such changes as may be necessary or
appropriate as a result of changes promulgated by the Securities and Exchange
Commission) for the benefit of the Depositor and its officers, directors and
Affiliates in respect of items 1 through 3 thereof of the Certification
(provided, however, that the Securities Administrator shall not undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K),
and each Servicer shall sign a certification solely with respect to such
Servicer (in the form attached hereto as Exhibit N, with such changes as may be
necessary or appropriate as a result of changes promulgated by the Securities
and Exchange Commission) for the benefit of the Depositor, the Securities
Administrator and their respective officers, directors and Affiliates in respect
of items 4 and 5 of the Certification. Each such certification shall be
delivered to the Depositor no later than March 15th of each year (or if such day
is not a Business Day, the immediately preceding Business Day) and the Depositor
shall deliver the Certification to be filed to the Securities Administrator no
later than March 20th of each year (or if such day is not a Business Day, the
immediately preceding Business Day). In the event that prior to the filing date
of the Form 10-K in March of each year, the Securities Administrator or any
Servicer has actual knowledge of information material to the Certification, that
party shall promptly notify the Depositor and each of the other parties signing
the certifications. In addition, (i) the Securities Administrator shall
indemnify and hold harmless the Depositor and its officers, directors,
employees, agents and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon any
breach of the Securities Administrator's obligations under this Section 8.12(c)
or the Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith, and (ii) each Servicer, severally and not jointly, shall
indemnify and hold harmless the Depositor, the Securities Administrator and
their respective officers, directors, employees, agents and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the applicable Servicer's obligations
under this Section 8.12(c) or any material misstatement or omission, negligence,
bad faith or willful misconduct of such Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless any indemnified party, then (i) the Securities Administrator agrees in
connection with a breach of the Securities Administrator's obligations under
this Section 8.12(c) or the Securities Administrator's negligence, bad faith or
willful misconduct in connection therewith that it shall contribute to the
amount paid or payable by the Depositor as a result of the losses, claims,
damages or liabilities of the Depositor in such proportion as is appropriate to
reflect the relative fault of the Depositor on the one hand and the Securities
Administrator on the other and (ii) each Servicer agrees that it shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities of such indemnified party in such
proportion as is appropriate to reflect the relative fault of such indemnified
party, on the one hand, and such Servicer, on the other hand, in connection with
a breach of the Servicers' obligations under this Section 8.12(c) or any
material misstatement or omission, negligence, bad faith or willful misconduct
of such Servicer in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Securities Administrator shall promptly deliver to the Depositor a copy of any
such executed report, statement or information.
(e) Prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall file a Form 15 Suspension Notification with respect to the
Trust.
Section 8.13 Tax Classification of the Excess Reserve Fund Account
and the Interest Rate Cap Agreements. For federal income tax purposes, the
Securities Administrator shall treat the Excess Reserve Fund Account and the
Interest Rate Cap Agreements as beneficially owned by the holders of the Class X
Certificates and shall treat such portion of the Trust Fund as a grantor trust,
within the meaning of subpart E, Part I of subchapter J of the Code. The
Securities Administrator shall treat the rights that each Class of LIBOR
Certificates has to receive payments of Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account as rights to receive payments under an interest rate
cap contract written by the Class X Certificateholder in favor of each such
Class and beneficially owned by each such Class through the grantor trust.
Accordingly, each Class of Certificates (excluding the Class X, Class P and
Class R Certificates) will be comprised of two components - an Upper Tier
Regular Interest and an interest in an interest rate cap contract, and the Class
X Certificates will be comprised of three components - an Upper Tier Regular
Interest, the Interest Rate Cap Agreements and an interest in the Excess Reserve
Fund Account, subject to obligation to pay Basis Risk CarryForward Amounts. The
Securities Administrator shall allocate the issue price for a Class of
Certificates among the respective components for purposes of determining the
issue price of the Upper Tier Regular Interest component based on information
received from the Depositor.
Section 8.14 Custodial Responsibilities. (a) The Custodian shall
provide access to the Mortgage Loan Documents in possession of the Custodian
regarding the related Mortgage Loans and REO Property and the servicing thereof
to the Trustee, the Certificateholders, the FDIC, and the supervisory agents and
examiners of the FDIC, such access being afforded only upon reasonable prior
written request and during normal business hours at the office of the Custodian.
The Custodian shall allow representatives of the above entities to photocopy any
of the records and documentation and shall provide equipment for that purpose at
the expense of the person requesting such access.
Upon receipt of a written request made by a Servicer in the form of
the Request for Release, the applicable Custodian shall release within five
Business Days the related Mortgage File in accordance with Section 3.16.
(b) The Custodian and any of its respective directors, officers,
employees or agents shall be indemnified by the Trust Fund and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to this Agreement
or the performance of any of the Custodian's duties under this Agreement other
than any loss, liability, or expense incurred (i) resulting from any breach of
the Servicer's obligations in connection with this Agreement for which the
Servicer has performed its obligations to indemnify the Custodian pursuant to
Section 6.05, (ii) resulting from any breach of the Responsible Party's
obligations in connection with this Agreement for which the Responsible Party
has performed its obligations to indemnify the Custodian pursuant to Section
2.03(k), or (iii) because of willful misfeasance, bad faith, or negligence in
the performance of any of the Custodian's duties under this Agreement; provided,
that no expense shall be reimbursed by this indemnity if it would not constitute
an "unanticipated expense incurred by the REMIC" within the meaning of the REMIC
Provisions. This indemnity shall survive the termination of this Agreement or
the earlier resignation or removal of the Custodian. Except as otherwise
provided in this Agreement or a separate letter agreement between the Depositor
and the Custodian, the Custodian shall not be entitled to payment or
reimbursement for any routine ongoing expenses incurred by the Custodian in the
ordinary course of its duties hereunder.
(c) The Custodian may resign from its obligations hereunder upon 60
days' prior written notice to the Trustee, the Depositor and the Servicers. Such
resignation shall take effect upon (i) the appointment of a successor Custodian
reasonably acceptable to the Trustee within such 60 day period; and (ii)
delivery of all Custodial Files to the successor Custodian. The Trustee shall
have the right, but not the obligation, to become the successor Custodian. If no
successor Xxxxxxxxx is appointed within 60 days after written notice of the
Custodian's resignation is received by the Trustee, the Custodian may petition a
court of competent jurisdiction to appoint a successor Xxxxxxxxx.
Upon such resignation and appointment of successor Xxxxxxxxx, the
Custodian shall, at Custodian's expense, promptly transfer to the successor
Custodian, as directed in writing by the Trustee, all Mortgage Files being
administered under this Agreement.
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Countrywide's Obligations. (a) In addition to the other duties of the Master
Servicer set forth in this Agreement, the Master Servicer, on behalf of the
Trustee, the Securities Administrator, the Depositor and the Certificateholders,
shall oversee the performance of Countrywide under this Agreement, and (except
as set forth below) shall use its reasonable good faith efforts to cause the
Servicers to duly and punctually perform their duties and obligations hereunder
as applicable. Upon the occurrence of an Event of Default of which a Responsible
Officer of the Master Servicer has actual knowledge, the Master Servicer shall
promptly notify the Securities Administrator and the Trustee and shall specify
in such notice the action, if any, the Master Servicer plans to take in respect
of such default. So long as an Event of Default shall occur and be continuing,
the Master Servicer shall take the actions specified in Article VII.
(b) The Master Servicer shall bear the costs of monitoring the
Servicers as required hereunder (including costs associated with (i) termination
of any Servicer, (ii) the appointment of a successor servicer or (iii) the
transfer to and assumption of, the servicing by the Master Servicer) and shall,
to the extent permitted by this Agreement, seek reimbursement therefor initially
from the terminated Servicer. In the event the full costs associated with the
transition of servicing responsibilities to the Master Servicer are not paid for
by the predecessor or successor Servicer (provided such successor Servicer is
not the Master Servicer), the Master Servicer may be reimbursed therefor by the
Trust for all costs incurred by the Master Servicer associated with any such
transfer of servicing duties from a Servicer to the Master Servicer or any other
successor servicer.
(c) If the Master Servicer assumes the servicing with respect to any
of the Mortgage Loans, it will not assume liability for the representations and
warranties of any Servicer it replaces or for any errors or omissions of such
Servicer.
(d) Neither the Depositor nor the Securities Administrator shall
consent to the assignment by any Servicer of such Servicer's rights and
obligations under the Agreement without the prior written consent of the Master
Servicer and the Depositor, which consent shall not be unreasonably withheld.
(e) Notwithstanding anything in this Agreement to the contrary, the
Master Servicer shall not be entitled or required to supervise or advise HomEq,
including, without limitation, with respect to servicing of defaulted Mortgage
Loans, approving P&I Advances or Servicing Advances or reimbursements of such
Advances, strategies for resolution and workout of defaulted Mortgage Loans and
loss mitigation strategies; provided, however, that the Master Servicer shall
confirm compliance by HomEq of its monthly remittance and reporting obligations
and other obligations that HomEq has to the Master Servicer that are expressly
provided for in this Agreement.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. (a) The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and other
Persons acting on such Master Xxxxxxxx's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder. The
errors and omissions insurance policy and the fidelity bond shall be in such
form and amount generally acceptable for entities serving as master servicers or
trustees.
Section 9.03 Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor, the
Securities Administrator and the Trustee, for the benefit of the
Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and comply
with its obligations under the terms of this Agreement, the execution,
delivery and performance of which have been duly authorized by all
necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order to
which it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is bound
or to which any of its assets are subject, which violation, default or
breach would materially and adversely affect the Master Servicer's ability
to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights in general, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master Servicer
with this Agreement or the consummation of the transactions contemplated
by this Agreement, except for such consents, approvals, authorizations and
orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the execution and delivery of
this Agreement. The Master Servicer shall indemnify the Depositor, Securities
Administrator, the Trustee and the Trust and hold them harmless against any
loss, damages, penalties, fines, forfeitures, reasonable legal fees and related
costs, judgments, and other reasonable costs and expenses resulting from any
claim, demand, defense or assertion based on or grounded upon, or resulting
from, a material breach of the Master Servicer's representations and warranties
contained in Section 9.03(a) above. It is understood and agreed that the
enforcement of the obligation of the Master Servicer set forth in this Section
9.03 to indemnify the Depositor, Securities Administrator, the Trustee and the
Trust constitutes the sole remedy of the Depositor and the Trustee, respecting a
breach of the foregoing representations and warranties. Such indemnification
shall survive any termination of the Master Servicer as Master Servicer
hereunder and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor, the
Master Servicer, Securities Administrator or the Trustee or notice thereof by
any one of such parties to the other parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to deposit in the
Distribution Account any payment received by it from any Servicer or required to
be made by the Master Servicer under the terms of this Agreement which continues
unremedied for a period of two (2) Business Days after the date upon which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by any other party hereto;
(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement which failure continues
unremedied for a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or to the Master Servicer and Trustee by
the holders of Certificates evidencing at least 25% of the Voting Rights;
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force, undischarged or unstayed
for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations for
three (3) Business Days;
(f) Except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Trustee, Securities Administrator and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any employee thereof, any Affiliate or any
director or employee thereof that constitutes fraud or criminal activity in the
performance of its obligations under this Agreement, in each case, where such
indictment materially and adversely affects the ability of the Master Servicer
to perform its obligations under this Agreement (subject to the condition that
such indictment is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the Trustee
may have at law or equity to damages, including injunctive relief and specific
performance, the Trustee, by notice in writing to the Master Servicer, may, and
upon the request of the Holders of Certificates representing at least 51% of the
Voting Rights shall, terminate with cause all the rights and obligations of the
Master Servicer under this Agreement.
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which accepts
such appointments. Upon written request from the Trustee or the Depositor, the
Master Servicer shall prepare, execute and deliver to the successor entity
designated by the Trustee any and all documents and other instruments related to
the performance of its duties hereunder as the Master Servicer and, place in
such successor's possession all such documents with respect to the master
servicing of the Mortgage Loans and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, at the Master Servicer's sole expense. The Master Servicer shall
cooperate with the Trustee and such successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including without limitation, the transfer to such successor master servicer for
administration by it of all cash amounts which shall at the time be credited to
the Distribution Account or are thereafter received with respect to the Mortgage
Loans.
Section 9.05 Waiver of Default. By a written notice, the Trustee may
with the consent of a Holders of Certificates evidencing at least 51% of the
Voting Rights waive any default by the Master Servicer in the performance of its
obligations hereunder and its consequences. Upon any waiver of a past default,
such default shall cease to exist, and any Master Servicer Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
Section 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint a successor, which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Master Servicer under
this Agreement prior to the termination of the Master Servicer. Any successor
shall be a Xxxxxx Xxx and Freddie Mac approved servicer in good standing and
acceptable to the Depositor and the Rating Agencies. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that in no event shall the master
servicing fee paid to such successor master servicer exceed the Master Servicing
Fee paid to the Master Servicer hereunder. In the event that the Master
Servicer's duties, responsibilities and liabilities under this Agreement are
terminated, the Master Servicer shall continue to discharge its duties and
responsibilities hereunder until the effective date of such termination with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement and shall take no action whatsoever that might impair or
prejudice the rights of its successor. The termination of the Master Servicer
shall not become effective until a successor shall be appointed pursuant hereto
and shall in no event (i) relieve the Master Servicer of responsibility for the
representations and warranties made pursuant to Section 9.03(a) hereof and the
remedies available to the Trustee under Section 9.03(b) hereof, it being
understood and agreed that the provisions of Section 9.03 hereof shall be
applicable to the Master Servicer notwithstanding any such sale, assignment,
resignation or termination of the Master Servicer or the termination of this
Agreement; or (ii) affect the right of the Master Servicer to receive payment
and/or reimbursement of any amounts accruing to it hereunder prior to the date
of termination (or during any transition period in which the Master Servicer
continues to perform its duties hereunder prior to the date the successor master
servicer fully assumes its duties).
If no successor Master Servicer has accepted its appointment within
90 days of the time the Trustee receives the resignation of the Master Servicer,
the Trustee shall become the successor Master Servicer in all respects under
this Agreement and shall have all the rights and powers and be subject to all
the responsibilities, duties and liabilities relating thereto, including the
obligation to make P&I Advances; provided, however, that any failure to perform
any duties or responsibilities caused by the Master Servicer's failure to
provide information required by this Agreement shall not be considered a default
by the Trustee hereunder. In the Trustee's capacity as such successor, the
Trustee shall have the same limitations on liability herein granted to the
Master Servicer. Notwithstanding anything herein to the contrary, the Trustee in
its role as successor Master Servicer shall have no obligation to monitor or
supervise Countrywide or any other Servicer, shall only have the obligation to
make Advances if it terminates a Servicer pursuant to Section 7.01 (in its role
as successor Master Servicer), and shall make such Advances only pursuant to
Section 7.02. As compensation therefor, the Trustee shall be entitled to receive
the compensation, reimbursement and indemnities otherwise payable to the Master
Servicer, including the fees and other amounts payable pursuant to Section 9.07
hereof.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.03 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Master Servicer or termination of this Agreement shall not
affect any claims that the Trustee may have against the Master Servicer arising
out of the Master Servicer's actions or failure to act prior to any such
termination or resignation or in connection with the Trustee's assumption of
such obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer shall notify by mail the Trustee of such appointment.
Section 9.07 Compensation of the Master Servicer. As compensation
for its activities under this Agreement, the Master Servicer shall be paid the
Master Servicing Fee.
Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or resulting Person to the Master Servicer
shall (i) be a Person (or have an Affiliate) that is qualified and approved to
service mortgage loans for Xxxxxx Xxx and FHLMC (provided further that a
successor Master Servicer that satisfies subclause (i) through an Affiliate
agrees to service the Mortgage Loans in accordance with all applicable Xxxxxx
Xxx and FHLMC guidelines) and (ii) have a net worth of not less than
$25,000,000.
Section 9.09 Resignation of the Master Servicer. Except as otherwise
provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall not resign
from the obligations and duties hereby imposed on it unless the Master
Servicer's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it and cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
that shall be independent to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee shall have assumed, or a
successor master servicer satisfactory to the Trustee and the Depositor shall
have assumed, the Master Servicer's responsibilities and obligations under this
Agreement. Notice of such resignation shall be given promptly by the Master
Servicer and the Depositor to the Trustee.
If at any time, Xxxxx Fargo Bank, National Association, as Master
Xxxxxxxx, resigns under this Section 9.09, or is removed as Master Servicer
pursuant to Section 9.04, then at such time Xxxxx Fargo Bank, National
Association shall also resign (and shall be entitled to resign) as Securities
Administrator under this Agreement.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Depositor (which
shall not be unreasonably withheld or delayed), and upon delivery to the Trustee
and the Depositor of a letter from each Rating Agency to the effect that such
action shall not result in a downgrade of the ratings assigned to any of the
Certificates, to delegate or assign to or subcontract with or authorize or
appoint any qualified Person to perform and carry out any duties, covenants or
obligations to be performed and carried out by the Master Servicer hereunder.
Notice of such permitted assignment shall be given promptly by the Master
Servicer to the Depositor and the Trustee. If, pursuant to any provision hereof,
the duties of the Master Servicer are transferred to a successor master
servicer, the entire compensation payable to the Master Servicer pursuant hereto
shall thereafter be payable to such successor master servicer but in no event
shall the fee payable to the successor master servicer exceed that payable to
the predecessor master servicer.
Section 9.11 Limitation on Liability of the Master Servicer. Neither
the Master Servicer nor any of the directors, officers, employees or agents of
the Master Servicer shall be under any liability to the Trustee, Securities
Administrator, the Servicers or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such person against any liability
that would otherwise be imposed by reason of willful malfeasance, bad faith or
negligence in the performance of its duties or by reason of reckless disregard
for its obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Master Servicer shall be under no
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties as Master Servicer with respect to the Mortgage Loans
under this Agreement and that in its opinion may involve it in any expenses or
liability; provided, however, that the Master Servicer may in its sole
discretion undertake any such action that it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom, shall
be liabilities of the Trust, and the Master Servicer shall be entitled to be
reimbursed therefor out of the Master Servicer Account in accordance with the
provisions of Section 9.07 and Section 9.12.
The Master Servicer shall not be liable for any acts or omissions of
any Servicer except to the extent that damages or expenses are incurred as a
result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers as required under this Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Xxxxxxxx agrees to indemnify the Depositor, each Servicer, the Trustee and the
Trust, and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, liability, fees and expenses that the Depositor, such Servicer, the
Trustee or the Trust may sustain as a result of the Master Servicer's willful
malfeasance, bad faith or negligence in the performance of its duties hereunder
or by reason of its reckless disregard for its obligations and duties under this
Agreement. The Depositor, Securities Administrator, the applicable Servicer, and
the Trustee shall immediately notify the Master Servicer if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans which would
entitle the Depositor, such Servicer, the Trustee or the Trust to
indemnification under this Section 9.12, whereupon the Master Servicer shall
assume the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or them in respect of such
claim.
The Master Servicer agrees to indemnify and hold harmless the
Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer) of
the Master Servicer's obligations, duties or responsibilities under such
agreement.
The Trust Fund will indemnify the Master Servicer and hold it
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liabilities, fees
and expenses that the Master Servicer may incur or sustain in connection with,
arising out of or related to this Agreement or the Certificates, except to the
extent that any such loss, liability or expense is related to (i) a material
breach of the Master Servicer's representations and warranties in this Agreement
or (ii) the Master Servicer's willful malfeasance, bad faith or negligence or by
reason of its reckless disregard of its duties and obligations under any such
agreement; provided that any such loss, liability or expense constitutes an
"unanticipated expense incurred by the REMIC" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii). The Master Servicer shall be entitled to
reimbursement for any such indemnified amount from funds on deposit in the
Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Securities Administrator and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Securities Administrator and conforming to
the requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination no
longer subject to appeal, that the Securities Administrator was negligent
in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates relating
to the time, method and place of conducting any proceeding for any remedy
available to the Securities Administrator, or exercising or omitting to
exercise any trust or power conferred upon the Securities Administrator
under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting upon
any resolution, Officer's Certificate, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature of
any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Securities Administrator, not reasonably assured to the
Securities Administrator by the security afforded to it by the terms of
this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so
proceeding. Nothing in this clause (iv) shall derogate from the obligation
of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, provided that the
Master Servicer shall have no liability for disclosure required by this
Agreement;
(v) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby; and
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities Administrator
may in its discretion undertake any such action that it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Collection Account.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Purchaser, as the case may
be, and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Securities
Administrator's execution and authentication of the Certificates. The Securities
Administrator shall not be accountable for the use or application by the
Depositor or the Master Servicer of any funds paid to the Depositor or the
Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account by the Depositor or the Master Servicer.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Securities Administrator Float
Period. The Securities Administrator and any director, officer, employee, agent
or "control person" within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange of 1934, as amended ("Control Person"), of
the Securities Administrator shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney's fees)
(i) incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Mortgage Loans or (c) the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Securities Administrator's duties
hereunder, (ii) incurred in connection with the performance of any of the
Securities Administrator's duties hereunder, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Securities Administrator's duties hereunder or
(iii) incurred by reason of any action of the Securities Administrator taken at
the direction of the Certificateholders, provided that any such loss, liability
or expense constitutes an "unanticipated expense incurred by the REMIC" within
the meaning of Treasury Regulations Section 1.860G 1(b)(3)(ii). Such indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Securities Administrator hereunder. Without limiting the foregoing, and
except for any such expense, disbursement or advance as may arise from the
Securities Administrator's negligence, bad faith or willful misconduct, or which
would not be an "unanticipated expense" within the meaning of the second
preceding sentence, the Securities Administrator shall be reimbursed by the
Trust for all reasonable expenses, disbursements and advances incurred or made
by the Securities Administrator in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer, appraiser or other agent that is not regularly
employed by the Securities Administrator, to the extent that the Securities
Administrator must engage such Persons to perform acts or services hereunder and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. The Trust shall fulfill its obligations under this paragraph from
amounts on deposit from time to time in the Distribution Account. The Securities
Administrator shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
Section 10.06 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating of at least investment grade. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 10.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 10.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 10.07 hereof. The entity serving as Securities
Administrator may have normal banking and trust relationships with the Depositor
and its affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Master Servicer, the Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator functions are operated through an
institutional trust department of the Securities Administrator, (ii) must be
authorized to exercise corporate trust powers under the laws of its jurisdiction
of organization, and (iii) must be rated at least "A/F1" by Fitch, if Fitch is a
Rating Agency and rates such successor, or the equivalent rating by S&P or
Xxxxx'x. If no successor Securities Administrator shall have been appointed and
shall have accepted appointment within 60 days after the Securities
Administrator ceases to be the Securities Administrator pursuant to Section
10.07, then the Trustee may (but shall not be obligated to) become the successor
Securities Administrator. The Depositor shall appoint a successor to the
Securities Administrator in accordance with Section 10.07. The Trustee shall
notify the Rating Agencies of any change of Securities Administrator.
Section 10.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor and the Trustee and each Rating Agency not less
than 60 days before the date specified in such notice when, subject to Section
10.08, such resignation is to take effect, and acceptance by a successor
Securities Administrator in accordance with Section 10.08 meeting the
qualifications set forth in Section 10.06. If no successor Securities
Administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Securities
Administrator.
If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, or if at any time
the Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities Administrator
or of its property shall be appointed, or any public officer shall take charge
or control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
Securities Administrator.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Depositor and
to its predecessor Securities Administrator and the Trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor Securities Administrator shall become effective and such
successor Securities Administrator, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with the like effect as if originally named as
Securities Administrator herein. The Depositor, the Trustee, the Master Servicer
and the predecessor Securities Administrator shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Securities
Administrator all such rights, powers, duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within 10 days after
acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 10.09 Merger or Consolidation of Securities Administrator.
Any corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
10.06 hereof, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder. Notice of such permitted assignment shall be
given promptly by the Securities Administrator to the Depositor and the Trustee.
If, pursuant to any provision hereof, the duties of the Securities Administrator
are transferred to a successor securities administrator, the entire compensation
payable to the Securities Administrator pursuant hereto shall thereafter be
payable to such successor securities administrator but in no event shall the fee
payable to the successor Securities Administrator exceed that payable to the
predecessor Securities Administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 11.03, the obligations and responsibilities
of the Depositor, the Servicers, the Master Servicer, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of (a) the purchase, on or after the Optional
Termination Date, by any Servicer individually, or both Servicers together, of
all Mortgage Loans (and REO Properties) at the price equal to the sum of (i)
100% of the unpaid principal balance of each Mortgage Loan (other than in
respect of REO Property) plus accrued and unpaid interest thereon at the
applicable Mortgage Rate and (ii) the lesser of (x) the appraised value of any
REO Property as determined by the higher of two appraisals completed by two
independent appraisers selected by such Servicer at the expense of such
Servicer, plus accrued and unpaid interest on each Mortgage Loan at the
applicable Mortgage Rate and (y) the unpaid principal balance of each Mortgage
Loan related to any REO Property, in each case plus accrued and unpaid interest
thereon at the applicable Mortgage Rate and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the
United States to the Court of St. James's, living on the date hereof.
Notwithstanding anything to the contrary contained herein, no such
purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 11.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the purchasing Servicer(s) shall have deposited in the related
Collection Account an amount to be remitted to the NIM Trustee that, together
with such remaining proceeds, will be sufficient to pay the outstanding
principal amount of and accrued and unpaid interest on the NIM Securities, to
the extent the NIM Securities are then outstanding.
Section 11.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicers determine that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Accounts, the Servicers shall direct the Securities Administrator
promptly to send a Notice of Final Distribution to each Certificateholder. If
any Servicer individually elects to terminate the Trust Fund pursuant to clause
(a) of Section 9.01, such Servicer shall notify the other Servicer of such
election by the 15th day of the month preceding the month of the final
distribution and the other Servicer shall have 5 days to elect, by notice to the
other Servicer, to purchase the Mortgage Loans it services. If any Servicer or
both Servicers so elect to terminate, by the 25th day of the month preceding the
month of the final distribution, such Servicer or Servicers shall notify the
Depositor and the Securities Administrator of the date such Servicer or
Servicers intend to terminate the Trust Fund and of the applicable repurchase
price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Servicer or Servicers, as the case may be, will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, each
Servicer shall cause all funds in its Collection Account to be remitted to the
Securities Administrator for deposit in the Distribution Account on the Business
Day prior to the applicable Distribution Date in an amount equal to the final
distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the Trustee or the applicable
Custodian, as applicable, of a Request for Release therefor, the Trustee or the
applicable Custodian, as applicable, shall promptly release to the applicable
Servicer or Servicers, as the case may be, the Custodial Files for the Mortgage
Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicers, the Depositor
and the Trustee hereunder), in each case on the final Distribution Date and in
the order set forth in Section 4.02, in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class, up
to an amount equal to (i) as to each Class of Regular Certificates (except the
Class X Certificates), the Certificate Balance thereof plus for each such Class
and the Class X Certificates accrued interest thereon in the case of an
interest-bearing Certificate and all other amounts to which such Classes are
entitled pursuant to Section 4.02 and (ii) as to the Residual Certificates, the
amount, if any, which remains on deposit in the Distribution Account (other than
the amounts retained to meet claims) after application pursuant to clause (i)
above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
Section 11.03 Additional Termination Requirements. In the event the
applicable Servicer or all of the Servicers exercise their purchase option with
respect to the Mortgage Loans as provided in Section 11.01, the Trust Fund shall
be terminated in accordance with the following additional requirements, unless
the Trustee has been supplied with an Opinion of Counsel, at the expense of the
applicable Servicer or all of the Servicers, as the case may be, to the effect
that the failure to comply with the requirements of this Section 11.03 will not
(i) result in the imposition of taxes on "prohibited transactions" on either the
Lower Tier REMIC or the Upper Tier REMIC as defined in Section 860F of the Code,
or (ii) cause either the Lower Tier REMIC or the Upper Tier REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(a) The Securities Administrator on behalf of the Trustee shall sell
all of the assets of the Trust Fund to the applicable Servicer and, no later
than the next Distribution Date after such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each of
the Lower Tier REMIC and the Upper Tier REMIC; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each of the Lower Tier REMIC and the Upper
Tier REMIC stating that pursuant to Treasury Regulations Section 1.860F-1, the
first day of the 90-day liquidation period for each such REMIC was the date on
which the Securities Administrator on behalf of the Trustee sold the assets of
the Trust Fund to the applicable Servicer or Servicers, as the case may be.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicers, the Master Servicer, the Securities
Administrator, Custodians and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Master Servicer, the Securities Administrator, the Custodians or
the Servicers, (iv) to add any other provisions with respect to matters or
questions arising hereunder or (v) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement; provided that any
action pursuant to clauses (iv) or (v) above shall not, as evidenced by an
Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee, the Master Servicer, the Securities Administrator or the Trust Fund),
adversely affect in any material respect the interests of any Certificateholder;
and provided, further, that any such action pursuant to clause (iv) or (v) above
shall not be deemed to adversely affect in any material respect the interests of
the Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Master Servicer, the
Securities Administrator, the Custodians and the Servicers also may at any time
and from time to time amend this Agreement, but without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of the
Lower Tier REMIC and the Upper Tier REMIC under the Code, (ii) avoid or minimize
the risk of the imposition of any tax on the Lower Tier REMIC or the Upper Tier
REMIC pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code; provided that the Trustee and the Master Servicer has been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the Trust
Fund, to the effect that such action is necessary or helpful to, as applicable,
(i) maintain such qualification, (ii) avoid or minimize the risk of the
imposition of such a tax or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Custodians, the Master Servicer, the Securities Administrator,
the Servicers and the Trustee with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66(2)/3% of each Class
of Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in clause (i), without the consent of the
Holders of Certificates of such Class evidencing, as to such Class, Percentage
Interests aggregating not less than 66(2)/3%, or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all such Certificates then
outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee and the Master Servicer shall not consent to any amendment to this
Agreement unless (i) it shall have first received an Opinion of Counsel, which
opinion shall not be an expense of the Trustee, the Master Servicer or the Trust
Fund, to the effect that such amendment will not cause the imposition of any tax
on either the Lower Tier REMIC or the Upper Tier REMIC or the Certificateholders
or cause any such REMIC to fail to qualify as a REMIC or the grantor trust to
fail to qualify as a grantor trust at any time that any Certificates are
outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies (with a copy of such notice to the Trustee
and the Master Servicer) of such amendment, stating the provisions of the
Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 12.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicers, any Certificate beneficially owned by the
Depositor shall be deemed not to be outstanding (and shall not be considered
when determining the percentage of Certificateholders consenting or when
calculating the total number of Certificates entitled to consent) for purposes
of determining if the requisite consents of Certificateholders under this
Section 12.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee, the Master
Servicer or the Securities Administrator to enter into an amendment without
receiving an Opinion of Counsel (which Opinion shall not be an expense of the
Trustee, the Master Servicer or the Securities Administrator or the Trust Fund),
satisfactory to the Trustee, the Master Servicer or the Securities Administrator
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 12.01.
Section 12.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicers at the direction and expense of the Depositor, but only upon receipt
of an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 12.05 Notices. (a) The Securities Administrator shall use
its best efforts to promptly provide notice to each Rating Agency with respect
to each of the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of a Servicer, Master Servicer,
Securities Administrator or the Trustee and the appointment of any
successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly make
available on its Internet website to each Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be in
writing (unless otherwise indicated in this paragraph) and shall be deemed to
have been duly given when delivered to: (a) in the case of the Depositor or the
Underwriter, Xxxxxx Xxxxxxx ABS Capital I Inc. or Xxxxxx Xxxxxxx & Co.
Incorporated, (1) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx - SPG Finance, 0000 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (2) Xxxxxxxx Xxxxx, Xxxxxx Xxxxxxx - Legal
Counsel (Securities), 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (3)
Xxxx Xxxxxxxx, Xxxxxx Xxxxxxx - Servicing Oversight, 0000 X-Xxx Xxx., Xxxxx 000,
Xxxx Xxxxx, Xxxxxxx 00000; (4) Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxx - Whole Loan
Operations, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000; (5) Xxxxx Xxxxxx, Xxxxxx
Xxxxxxx - RFPG, 0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
10020; and (6) in the case of a direction or demand, notification to the
following email addresses: Xxxx.Xxxxxxxx@ xxxxxxxxxxxxx.xxx,
Xxxxxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx, Xxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx and
Xxxx.Xxxxxxxx@xxxxxxxxxxxxx.xxx; or such other address as may be hereafter
furnished to the other parties hereto by the Depositor in writing; (b) in the
case of Decision One, Decision One Mortgage Company LLC, 6060 J.A. Xxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: General
Counsel, or such other address as may be hereafter furnished to the other
parties hereto by Decision One in writing; (c) in the case of Countrywide,
Countrywide Home Loans Servicing LP, 000 Xxxxxxxxxxx Xxx, Xxxx Xxxxxx,
Xxxxxxxxxx, facsimile number (000) 000-0000, Attention: Xxxx Xxxx, or such other
address as may be hereafter furnished to the other parties hereto by Countrywide
in writing; (d) in the case of HomEq Servicing Corporation, 0000 Xxxx Xxxxxx,
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000, Attention: Portfolio Management,
Facsimile No. (000) 000-0000, HomEq Servicing Corporation, 0000 Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Legal
Department, Facsimile No. (000) 000-0000, or such other address as may be
hereafter furnished to the other parties hereto by HomEq in writing; (e) in the
case of WMC, WMC Mortgage Corp., 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxx Xxxxxxxx, Facsimile No. (000) 000-0000, with a copy to
General Counsel, Facsimile No. (000) 000-0000, or such other address as may be
hereafter furnished to the other parties hereto by WMC in writing (f) in the
case of NC Capital, 00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxx Xxxxx, Executive Vice President, or such other address as may
be hereafter furnished to the other parties hereto by NC Capital; (g) in the
case of Accredited, Accredited Home Lenders, Inc., 00000 Xxxxxx xx Xxxxxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, Attention: Director of Operations, or such other
address as may be hereafter furnished to the Depositor and the Trustee by
Accredited in writing; (h) in the case of the Trustee, to the Corporate Trust
Office, Deutsche Bank National Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx
Xxx, Xxxxxxxxxx 00000, Attention: Trust Administration MS05H3, or such other
address as the Trustee may hereafter furnish to the other parties hereto in
writing; (i) in the case of LaSalle, LaSalle Bank National Association, 0000
Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, or such other address
as may be hereafter furnished to the other parties hereto by LaSalle in writing;
(j) in the case of each of the Rating Agencies, the address specified therefor
in the definition corresponding to the name of such Rating Agency, and (k) in
the case of Xxxxx Fargo Bank, N.A., 0000 00xx Xxxxxx XX, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: Client Service Manager MS 2005-HE3, or such other address as
may be hereafter furnished to the other parties hereto by Xxxxx Fargo Bank, N.A.
in writing. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 12.07 Assignment; Sales; Advance Facilities. Notwithstanding
anything to the contrary contained herein, except as provided in Section 6.04,
this Agreement may not be assigned by any Servicer without the prior written
consent of the Trustee and the Depositor; provided, however, each Servicer is
hereby authorized to enter into an Advance Facility under which (l) such
Servicer sells, assigns or pledges to an Advancing Person the Servicer's rights
under this Agreement to be reimbursed for any P&I Advances or Servicing Advances
and/or (2) an Advancing Person agrees to fund some or all P&I Advances or
Servicing Advances required to be made by such Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before a Servicer may enter into an Advance Facility. Notwithstanding
the existence of any Advance Facility under which an Advancing Person agrees to
fund P&I Advances and/or Servicing Advances on a Servicer's behalf, such
Servicer shall remain obligated pursuant to this Agreement to make P&I Advances
and Servicing Advances pursuant to and as required by this Agreement, and shall
not be relieved of such obligations by virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
P&I Advances and/or Servicing Advances made with respect to the Mortgage Loans
for which a Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming such Servicer had made the related P&I Advance(s)
and/or Servicing Advance(s).
The applicable Servicer shall maintain and provide to any successor
Servicer a detailed accounting on a loan-by-loan basis as to amounts advanced
by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed P&I Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the applicable Servicer to
provide to the related Advancing Person or its designee loan-by-loan information
with respect to each such reimbursement amount distributed to such Advancing
Person or Advance Facility trustee on each Distribution Date, to enable the
Advancing Person or Advance Facility trustee to make the FIFO allocation of each
such reimbursement amount with respect to each applicable Mortgage Loan. The
applicable Servicer shall remain entitled to be reimbursed by the Advancing
Person or Advance Facility trustee for all P&I Advances and Servicing Advances
funded by such Servicer to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 12.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 12.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Responsible Parties and the Servicers
without the consent of any Certificateholder, notwithstanding anything to the
contrary in this Agreement, upon receipt by the Trustee of an Opinion of Counsel
that such amendment has no material adverse effect on the Certificateholders or
written confirmation from the Rating Agencies that such amendment will not
adversely affect the ratings on the Certificates. Prior to entering into an
Advance Facility, the applicable Servicer shall notify the lender under such
facility in writing that: (a) the Advances financed by and/or pledged to the
lender are obligations owed to such Servicer on a non-recourse basis payable
only from the cash flows and proceeds received under this Agreement for
reimbursement of Advances only to the extent provided herein, and the Trustee
and the Trust are not otherwise obligated or liable to repay any Advances
financed by the lender; (b) such Servicer will be responsible for remitting to
the lender the applicable amounts collected by it as reimbursement for Advances
funded by the lender, subject to the restrictions and priorities created in this
Agreement; and (c) the Trustee shall not have any responsibility to track or
monitor the administration of the financing arrangement between such applicable
Servicer and the lender.
Section 12.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.09 Inspection and Audit Rights. Each Servicer agrees
that, on 5 Business Days prior notice, it will permit any representative of the
Depositor or the Trustee during such Person's normal business hours, to examine
all the books of account, records, reports and other papers of such Person
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants selected by
the Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision each Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense of a Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 12.09 shall be
borne by such Servicer.
Section 12.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
Section 12.11 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Agreement or the intent of the parties hereto.
Section 12.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
[Signature Page Follows]
IN WITNESS WHEREOF, the Depositor, the Trustee, the Master Servicer,
the Servicers, the Custodians, the Securities Administrator and the Responsible
Parties have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Executive Director
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Associate
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Associate
COUNTRYWIDE HOME LOANS
SERVICING LP, as Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
HOMEQ SERVICING CORPORATION,
as Servicer
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
Title: President
DECISION ONE MORTGAGE COMPANY LLC, as
Responsible Party
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President Secondary
NC CAPITAL CORPORATION,
as Responsible Party
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: President
ACCREDITED HOME LENDERS, INC.,
as Responsible Party
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Secondary Markets
Counsel, AVP & Ass't Sec'y
WMC MORTGAGE CORP.,
as Responsible Party
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: EVP-Capital Markets
LASALLE BANK NATIONAL ASSOCIATION, as
Custodian
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Master Servicer,
Custodian, and Securities
Administrator
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to Trustee and Custodians on the Closing Date)
SCHEDULE II
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-HE3
Representations and Warranties of Countrywide Home Loans
Servicing LP, as Servicer
Countrywide hereby makes the representations and warranties set
forth in this Schedule II to the Depositor and the Trustee as of the Closing
Date.
(1) Countrywide is duly organized as a limited partnership and is
validly existing and in good standing under the laws of the state of
Texas, and is licensed and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by
Countrywide in any state in which a Mortgaged Property securing a Mortgage
Loan is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the
doing business laws of any such State, to the extent necessary to ensure
its ability to enforce each Mortgage Loan and to service the Mortgage
Loans in accordance with the terms of this Pooling and Servicing
Agreement;
(2) Countrywide has the full partnership power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Pooling
and Servicing Agreement and has duly authorized by all necessary
partnership action on the part of Countrywide the execution, delivery and
performance of this Pooling and Servicing Agreement; and this Pooling and
Servicing Agreement, assuming the due authorization, execution and
delivery thereof by the Depositor, each Responsible Party, the other
Servicers and the Trustee, constitutes a legal, valid and binding
obligation of Countrywide, enforceable against Countrywide in accordance
with its terms; except to the extent that (a) the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by Countrywide, the servicing of the Mortgage Loans by
Countrywide hereunder, the consummation by Countrywide of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of
Countrywide and will not (A) result in a breach of any term or provision
of the organizational documents of Countrywide or (B) conflict with,
result in a breach, violation or acceleration of, or result in a default
under, the terms of any other material agreement or instrument to which
Countrywide is a party or by which it may be bound, or any law, statute,
rule, order, regulation, judgment or decree applicable to Countrywide or
its property of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Countrywide; and Countrywide is
not a party to, bound by, or in breach or violation of any indenture or
other agreement or instrument, or subject to or in violation of any law,
statute, rule, order, regulation, judgment or decree of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which (w) materially and adversely affects or, to
Countrywide's knowledge, would in the future materially and adversely
affect, the ability of Countrywide to perform its obligations under this
Pooling and Servicing Agreement, (x) materially and adversely affects or,
to Countrywide's knowledge, would in the future materially and adversely
affect, the business, operations, financial condition, properties or
assets of Countrywide taken as a whole, (y) impair the ability of the
Trust to realize on the Mortgage Loans, or (z) impair the value of the
Mortgage Loans;
(4) Countrywide has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans;
(5) Countrywide does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Pooling and Servicing Agreement;
(6) No action, suit, proceeding or investigation is pending, to the
best of Countrywide's knowledge, threatened against Countrywide, before
any court, administrative agency or other tribunal asserting the
invalidity of this Pooling and Servicing Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Pooling and
Servicing Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of Countrywide, or
in any material impairment of the right or ability of Countrywide to carry
on its business substantially as now conducted, or in any material
liability on the part of Countrywide, or which would draw into question
the validity of this Pooling and Servicing Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the obligations
of Countrywide contemplated herein, or which would be likely to impair
materially the ability of Countrywide to perform under the terms of this
Pooling and Servicing Agreement;
(7) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Countrywide of, or compliance by Countrywide with, this
Pooling and Servicing Agreement or the servicing of the Mortgage Loans as
evidenced by the consummation by Countrywide of the transactions
contemplated by this Pooling and Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date; and
(8) With respect to each Mortgage Loan, to the extent Countrywide
serviced such Mortgage Loan and to the extent Countrywide provided monthly
reports to the three credit repositories, Countrywide has fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis.
SCHEDULE III
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-HE3
Representations and Warranties of HomEq, as Servicer
HomEq hereby makes the representations and warranties set forth in
this Schedule III to the Depositor and the Trustee as of the Closing Date.
Capitalized terms used but not otherwise defined in this Schedule III shall have
the meaning ascribed thereto in the Pooling and Servicing Agreement.
(1) HomEq is duly organized as a corporation and is validly existing
and in good standing under the laws of the state of New Jersey, and is
licensed and qualified to transact any and all business contemplated by
this Pooling and Servicing Agreement to be conducted by HomEq in any state
in which a Mortgaged Property securing a Mortgage Loan is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure its ability to enforce each
Mortgage Loan and to service the Mortgage Loans in accordance with the
terms of this Pooling and Servicing Agreement;
(2) HomEq has the full power and authority to service each Mortgage
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
HomEq the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the Depositor,
each Responsible Party, the other Servicers and the Trustee, constitutes a
legal, valid and binding obligation of HomEq, enforceable against HomEq in
accordance with its terms; except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by HomEq, the servicing of the Mortgage Loans required to be
serviced by HomEq hereunder, the consummation by HomEq of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of HomEq and
will not (A) result in a breach of any term or provision of the
organizational documents of HomEq or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which HomEq is a
party or by which it may be bound, or any law, statute, rule, order,
regulation, judgment or decree applicable to HomEq or its property of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over HomEq; and HomEq is not a party to, bound by, or in
breach or violation of any indenture or other agreement or instrument, or
subject to or in violation of any law, statute, rule, order, regulation,
judgment or decree of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which (w) materially and
adversely affects or, to HomEq's knowledge, would in the future materially
and adversely affect, the ability of HomEq to perform its obligations
under this Pooling and Servicing Agreement, (x) materially and adversely
affects or, to HomEq's knowledge, would in the future materially and
adversely affect, the business, operations, financial condition,
properties or assets of HomEq taken as a whole, (y) impair the ability of
the Trust to realize on the Mortgage Loans, or (z) impair the value of the
Mortgage Loans;
(4) HomEq has the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as
the Mortgage Loans;
(5) HomEq does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Pooling and Servicing Agreement;
(6) No action, suit, proceeding or investigation is pending or
threatened against HomEq, before any court, administrative agency or other
tribunal asserting the invalidity of this Pooling and Servicing Agreement,
seeking to prevent the consummation of any of the transactions
contemplated by this Pooling and Servicing Agreement or which, either in
any one instance or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of HomEq, or in any material impairment of the right or ability of
HomEq to carry on its business substantially as now conducted, or in any
material liability on the part of HomEq, or which would draw into question
the validity of this Pooling and Servicing Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the obligations
of HomEq contemplated herein, or which would be likely to impair
materially the ability of HomEq to perform under the terms of this Pooling
and Servicing Agreement;
(7) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by HomEq of, or compliance by HomEq with, this Pooling and
Servicing Agreement or the servicing of the Mortgage Loans as evidenced by
the consummation by HomEq of the transactions contemplated by this Pooling
and Servicing Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the
Closing Date; and
With respect to each Mortgage Loan serviced by HomEq hereunder, to
the extent HomEq serviced such Mortgage Loan and to the extent HomEq provided
monthly reports to the three credit repositories, HomEq has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (i.e., favorable and unfavorable) on its
borrower credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
SCHEDULE IV
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-HE3
Representations and Warranties of Xxxxxx Xxxxxxx
ABS Capital I Inc. as to the Mortgage Loans
The Depositor hereby makes with respect the Mortgage Loans the
following representations and warranties to the Trustee, as of the Closing Date.
(1) Immediately prior to the transfer of the Mortgage Loans by the
Depositor to the Trust on the Closing Date, the Depositor had good title to the
Mortgage Loans, free and clear of any liens, charges, claims or encumbrances
whatsoever.
(2) The original loan balance of each Group I Mortgage Loan was
within Freddie Mac's and Fannie Mae's dollar amount limits for conforming one-
to four-family mortgage loans.
(3) None of the Group I Mortgage Loans originated on or after
October 1, 2002 has a prepayment premium period at origination in excess of
three years.
SCHEDULE V
Mortgage Pass-Through Certificates,
Series 2005-HE3
Representations and Warranties of WMC Mortgage Corp. as to the Mortgage Loans
WMC Mortgage Corp. hereby makes the representations and warranties
set forth in this Schedule V as to the Mortgage Loans only to the Depositor, the
Servicer and the Trustee, as of the Closing Date. Capitalized terms used but not
otherwise defined in this Schedule V shall have the meanings ascribed thereto in
the WMC Purchase Agreement.
(1) Mortgage Loans as Described. WMC Mortgage Corp. has delivered to
the Purchaser, as of July 1, 2005, the Data Tape Information and that Data
Tape Information and the information set forth on the Mortgage Loan
Schedule (other than information regarding the Stated Principal Balances
or Due Dates) are true and correct, including, without limitation, the
terms of the Prepayment Charges, if any, as of the Closing Date. As of the
Servicing Transfer Date with respect to each Mortgage Loan, the
information regarding the Stated Principal Balances and Due Dates set
forth on the Data Tape Information and the Mortgage Loan Schedule are true
and correct;
(2) Payments Current. All payments required to be made up to July 1,
2005 for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor
has any payment under the Mortgage Loan been 30 days or more delinquent,
exclusive of any period of grace, at any time since the origination of the
Mortgage Loan. The first Scheduled Payment was or shall be made with
respect to the Mortgage Loan on its Due Date or within the grace period,
all in accordance with the terms of the related Mortgage Note;
(3) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage as of the Cut-off Date, and to the knowledge of
WMC Mortgage Corp. and its Affiliates as of the Closing Date, and all
taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or an escrow of funds has been
established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable
as of the Cut-off Date, and to the knowledge of WMC Mortgage Corp. and its
Affiliates as of the Closing Date. Neither WMC Mortgage Corp. nor any
Affiliate has 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 under the Mortgage
Loan, except for interest accruing from the date of the Mortgage Note or
date of disbursement of the Mortgage Loan proceeds, whichever is earlier,
to the day which precedes by one month the Due Date of the first
installment of principal and interest;
(4) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any
respect from the date of origination, except by a written instrument which
has been recorded, if necessary to protect the interests of the Purchaser,
and which has been delivered to the Trustee and the terms of which are
reflected in the Mortgage Loan Schedule, the Data Tape Information or
included in the Mortgage File. The substance of any such waiver,
alteration or modification has been approved by the title insurer, if any,
to the extent required by the policy, and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Trustee and
the terms of which are reflected in the Mortgage Loan Schedule and the
Data Tape Information;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage unenforceable
(subject to bankruptcy, equitable principles and laws affecting creditor
rights generally), in whole or in part, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;
(6) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by
an insurer acceptable in accordance with the Underwriting Guidelines
against loss by fire, hazards of extended coverage and such other hazards
as are customary in the area where the Mortgaged Property is situated as
well as all additional requirements set forth in Section 3.13 of the
Pooling and Servicing Agreement. If required by the National Flood
Insurance Act of 1968, as amended, each Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration and is in effect, which policy
conforms to the Underwriting Guidelines as well as all additional
requirements set forth in Section 3.13 of the Pooling and Servicing
Agreement. All individual insurance policies contain a standard mortgagee
clause naming WMC Mortgage Corp. and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates
the Mortgagor thereunder to maintain the hazard insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at such Xxxxxxxxx's cost and expense, and to seek reimbursement
therefor from the Mortgagor. Where required by state law or regulation,
the Mortgagor has been given an opportunity to choose the carrier of the
required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Trustee upon the
consummation of the transactions contemplated by this Agreement. WMC
Mortgage Corp. has not engaged in, and has no knowledge of the Mortgagor's
having engaged in, any act or omission which would impair the coverage of
any such policy, the benefits of the endorsement provided for herein, or
the validity and binding effect of either including, without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or
value of any kind has been or will be received, retained or realized by
any attorney, firm or other person or entity, and no such unlawful items
have been received, retained or realized by WMC Mortgage Corp.;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions therein relating to Prepayment Charges, have
been complied with, and WMC Mortgage Corp. shall maintain in its
possession, available for the Purchaser's or the Trustee's inspection, and
shall deliver to the Purchaser or the Trustee upon demand, evidence of
compliance with all such requirements to the extent compliance therewith
can be demonstrated and if required by applicable law;
(8) No Satisfaction of Mortgage. Other than with respect to any
Mortgage Loan that was subject to a Principal Prepayment in Full occurring
after the Cut-off Date but prior to the Closing Date, the Mortgage has not
been satisfied, cancelled, subordinated or rescinded, in whole or in part,
and the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
WMC Mortgage Corp. has not waived the performance by the Mortgagor of any
action, if the Mortgagor's failure to perform such action would cause the
Mortgage Loan to be in default, nor has WMC Mortgage Corp. waived any
default resulting from any action or inaction by the Mortgagor;
(9) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which
the use of a leasehold estate for residential properties is a
widely-accepted practice, that consists of one or more separate and
complete tax parcels of real property improved by a residential dwelling;
provided, however, that any condominium unit or planned unit development
(other than a de minimis planned unit development) shall conform with the
Underwriting Guidelines. In the case of any Mortgaged Properties that are
Manufactured Homes ("Manufactured Home Mortgage Loans"), (i) the related
manufactured dwelling is permanently affixed to the land, (ii) the related
manufactured dwelling and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming WMC
Mortgage Corp. as mortgagee, (iii) the applicable laws of the jurisdiction
in which the related Mortgaged Property is located will deem the
manufactured dwelling located on such Mortgaged Property to be a part of
the real property on which such dwelling is located, and (iv) such
Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section
860G(a)(3) of the Internal Revenue Code of 1986, as amended and (y)
secured by manufactured housing treated as a single family residence under
Section 25(e)(10) of the Code. No portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not
be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. None of the
Mortgaged Properties are log homes, mobile homes, geodesic domes or other
unique property types;
(10) Valid First Lien or Second Lien. The Mortgage is a valid,
subsisting and enforceable first lien (with respect to a First Lien
Mortgage Loan) or second lien (with respect to a Second Lien Mortgage
Loan) on the Mortgaged Property, including all buildings and improvements
on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located in or
annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage
is subject only to (collectively, the "Permitted Exceptions"):
(i) with respect to any Second Lien Mortgage Loan, the lien of the
first mortgage on the related Mortgage Property;
(ii) the lien of current real property taxes and assessments not yet
due and payable;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not
adversely affect the Appraised Value of the Mortgaged Property set forth
in such appraisal; and
(iv) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property;
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes
and creates a valid, subsisting and enforceable first lien (with respect
to a First Lien Mortgage Loan) or second lien (with respect to a Second
Lien Mortgage Loan) and first priority (with respect to a First Lien
Mortgage Loan) or second priority (with respect to a Second Lien Mortgage
Loan) security interest on the property described therein and the
Responsible Party had full right to sell and assign the same to the
Purchaser subject to the Permitted Exceptions;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms (including, without limitation, any provisions therein relating
to Prepayment Charges), subject to bankruptcy, equitable principles and
laws affecting creditor rights generally. All parties to the Mortgage
Note, the Mortgage and any other such related agreement had legal capacity
to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note, the Mortgage and any such agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of WMC Mortgage Corp. in
connection with the origination of the Mortgage Loan or in the application
of any insurance in relation to such Mortgage Loan. Notwithstanding the
foregoing, but without limiting the other representations and warranties
set forth elsewhere in this Agreement, if any error, omission or
negligence in the origination of such Mortgage Loan occurred despite WMC
Mortgage Corp.'s conformance with the Underwriting Guidelines (as in
effect at the time such Mortgage Loan was made), then there shall be a
presumptive conclusion that there was no error, omission or negligence. No
fraud, misrepresentation, or similar occurrence or, to WMC Mortgage
Corp.'s knowledge, error, omission, or negligence with respect to a
Mortgage Loan has taken place on the part of any Person (other than WMC
Mortgage Corp.), including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance
in relation to such Mortgage Loan. WMC Mortgage Corp. or its Affiliate has
reviewed all of the documents constituting the Servicing File and WMC
Mortgage Corp. has made such inquiries as it deems necessary to make and
confirm the accuracy of the representations set forth herein;
(12) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(13) Ownership. Immediately prior to the transfer contemplated by
the Purchase Agreement, WMC Mortgage Corp. was the sole owner of record
and holder of the Mortgage Loan and the indebtedness evidenced by each
Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser,
WMC Mortgage Corp. retained the Mortgage Files or any part thereof with
respect thereto not delivered to the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. The Mortgage Loan was not assigned or
pledged, and WMC Mortgage Corp. had good, indefeasible and marketable
title thereto, and has full right to transfer and sell the Mortgage Loan
to the Purchaser free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has full
right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan
pursuant to the Purchase Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest;
(14) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located to the
extent required to ensure enforceability of the Mortgage Loan, and (2)
either (i) organized under the laws of such state, or (ii) qualified to do
business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state,
or (3) not doing business in such state;
(15) LTV. No Mortgage Loan has an LTV or a CLTV greater than 100%;
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Freddie Mac with respect
to Mortgage Loans and pursuant to the Underwriting Guidelines (as in
effect on the date that such Mortgage Loan was originated) and each such
title insurance policy is issued by a title insurer acceptable to prudent
lenders in the secondary mortgage market and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring WMC
Mortgage Corp., its successors and assigns, as to the first priority lien
(with respect to a First Lien Mortgage Loan) or second priority lien (with
respect to a Second Lien Mortgage Loan) of the Mortgage in the original
principal amount of the Mortgage Loan, subject only to the exceptions
contained in clauses (i), (ii), (iii) and (iv) of representation 10 of
this Schedule II, and in the case of Adjustable Rate Mortgage Loans,
against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Rate and Scheduled Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to
choose the carrier of the required mortgage title insurance. Additionally,
such lender's title insurance policy affirmatively insures ingress and
egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. WMC Mortgage Corp., its successor and assigns, are the
sole insureds of such lender's title insurance policy, and such lender's
title insurance policy is valid and remains in full force and effect and
will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender's title insurance policy, and no prior holder of the related
Mortgage, including WMC Mortgage Corp., has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy, including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or
will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained
or realized by WMC Mortgage Corp.;
(17) No Defaults. Other than payments due but not yet 30 or more
days delinquent, as of the Cut-off Date, and to the knowledge of WMC
Mortgage Corp. and its Affiliates as of the Closing Date, there is no
default, breach, violation or event which would permit acceleration
existing under the Mortgage or the Mortgage Note and no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event which would
permit acceleration. Neither WMC Mortgage Corp. nor its Affiliates or any
of their respective predecessors have waived any default, breach,
violation or event which would permit acceleration;
(18) No Mechanics' Liens. As of the date of origination, there are
no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under law could give
rise to such liens) affecting the related Mortgaged Property which are or
may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. As of the date of origination, there
are no improvements located on or being part of the Mortgaged Property in
violation of any applicable zoning law or regulation;
(20) Origination; Payment Terms. The Mortgage Loan was originated by
a Mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings
and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and
examined by a federal or state authority, except with respect to a
Mortgage Loan purchased from a correspondent as indicated on the Mortgage
Loan Schedule. Unless otherwise specified on the related Mortgage Loan
Schedule, principal payments on the Mortgage Loan commenced no more than
seventy days after funds were disbursed in connection with the Mortgage
Loan. The Mortgage Rate as well as, in the case of an Adjustable Rate
Mortgage Loan, the lifetime rate cap and the periodic cap are as set forth
on the related Mortgage Loan Schedule. Unless otherwise specified on the
related Mortgage Loan Schedule, the Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to
change due to the adjustments to the Mortgage Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the related
Mortgage Loan Schedule, the Mortgage Loan is payable on the first day of
each month and the Mortgage Loan does not require a balloon payment on its
stated maturity date;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(22) [Reserved];
(23) Occupancy of the Mortgaged Property. As of the Servicing
Transfer Date and to the knowledge of WMC Mortgage Corp. and its
Affiliates as of the Closing Date, the Mortgaged Property is lawfully
occupied under applicable law. As of the Servicing Transfer Date and to
the knowledge of WMC Mortgage Corp. and its Affiliates as of the Closing
Date, 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, but not
limited to, certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate authorities. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgagor
represented at the time of origination of the Mortgage Loan that the
Mortgagor would occupy the Mortgaged Property as the Mortgagor's primary
residence;
(24) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage referred to in paragraph (10) above;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(26) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Purchaser;
(27) Transfer of Mortgage Loans. Except with respect to MERS
Designated Mortgage Loans, the Assignment of Mortgage is in recordable
form, other than the assignee's name and recording information not yet
returned from the recording office, and is acceptable for recording under
the laws of the jurisdiction in which the Mortgaged Property is located.
The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by WMC Mortgage Corp. are not subject to the bulk transfer or
similar statutory provisions in effect in any applicable jurisdiction;
(28) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains a provision for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written
consent of the mortgagee thereunder, and to the best of WMC Mortgage
Corp.'s knowledge, such provision is enforceable subject to applicable
bankruptcy, equitable principles and laws affecting creditors' rights;
(29) No Buydown Provisions No Graduated Payments or Contingent
Interests. As of the Servicing Transfer Date and to the knowledge of WMC
Mortgage Corp. and its Affiliates as of the Closing Date, the Mortgage
Loan does not contain provisions pursuant to which Scheduled Payments are
paid or partially paid with funds deposited in any separate account
established by WMC Mortgage Corp., the Mortgagor, or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and
the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(30) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed
if the party assuming such Mortgage Loan meets certain credit requirements
stated in the Mortgage Loan Documents;
(31) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority (with
respect to a First Lien Mortgage Loan) or second lien priority (with
respect to a Second Lien Mortgage Loan) by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest
or by other title evidence acceptable to prudent lenders in the secondary
mortgage market. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan;
(32) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Servicing Transfer Date and to the knowledge of WMC Mortgage Corp.
and its Affiliates as of the Closing Date, there is no proceeding pending
or, to WMC Mortgage Corp.'s knowledge, threatened for the total or partial
condemnation of the Mortgaged Property. As of the Closing Date, the
Mortgaged Property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage
Loan or the use for which the premises were intended and each Mortgaged
Property is in at least the same condition or better than its condition at
the time of its appraisal. As of the Servicing Transfer Date and to the
knowledge of WMC Mortgage Corp. and its Affiliates as of the Closing Date,
since the time of its appraisal, there have not been any condemnation
proceedings with respect to the Mortgaged Property and WMC Mortgage Corp.
and its Affiliates have no knowledge of any such proceedings in the
future;
(33) Collection Practices; Escrow Payments; Interest Rate
Adjustments. The origination, servicing and collection practices used by
WMC Mortgage Corp. or its sub-servicer with respect to the Mortgage Loan
have been in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and
proper. As of the Servicing Transfer Date, with respect to escrow deposits
and Escrow Payments, if any, all such payments are in the possession of,
or under the control of, WMC Mortgage Corp. and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. As of the Servicing Transfer Date,
all Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage.
An escrow of funds is not prohibited by any applicable law (as in effect
on the Servicing Transfer Date) and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed
but is not yet due and payable. No escrow deposits or Escrow Payments or
other charges or payments due WMC Mortgage Corp. have been capitalized
under the Mortgage or the Mortgage Note. All Mortgage Rate adjustments
have been made in strict compliance with state and federal law and the
terms of the related Mortgage Note. If, pursuant to the terms of the
Mortgage Note, another index was selected for determining the Mortgage
Rate, the same index was used with respect to each Mortgage Note which
required a new index to be selected, and such selection did not conflict
with the terms of the related Mortgage Note. WMC Mortgage Corp. or its
sub-servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Rate and the monthly payment adjustments. Any
interest required to be paid pursuant to state, federal and local law has
been properly paid and credited;
(34) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed
on or prior to the Servicing Transfer Date and, to the knowledge of WMC
Mortgage Corp. and its Affiliates, on or prior to the Closing Date that
has resulted or will result in the exclusion from, denial of, or defense
to coverage under any applicable hazard insurance policy, primary mortgage
insurance policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the
availability of the timely payment of the full amount of the loss
otherwise due thereunder to the insured), irrespective of the cause of
such failure of coverage. In connection with the placement of any such
insurance, no commission, fee, or other compensation has been or will be
received by WMC Mortgage Corp. or by any officer, director, or employee of
WMC Mortgage Corp. or any designee of WMC Mortgage Corp. or any
corporation in which WMC Mortgage Corp. or any officer, director, or
employee had a financial interest at the time of placement of such
insurance;
(35) No Violation of Environmental Laws. To the best of WMC Mortgage
Corp.'s knowledge, there is no pending action or proceeding directly
involving the Mortgaged Property in which compliance with any
environmental law, rule or regulation is an issue; and there is no
violation of any environmental law, rule or regulation with respect to the
Mortgaged Property;
(36) Servicemembers Civil Relief Act. The Mortgagor has not notified
WMC Mortgage Corp., and WMC Mortgage Corp. has no knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers Civil
Relief Act or other similar state statutes;
(37) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed, prior to the approval of the Mortgage
Loan application, by a qualified appraiser, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both
satisfy the requirements of (a) Xxxxxx Mac or Freddie Mac and (b) the
Underwriting Guidelines and Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated;
(38) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials
required by, and WMC Mortgage Corp. has complied with all applicable law
with respect to the making of the Mortgage Loans;
(39) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(40) [Reserved];
(41) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by WMC Mortgage Corp. to the Purchaser, WMC Mortgage
Corp. has full right and authority and is not precluded by law or contract
from furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective
purchaser of such Mortgage. WMC Mortgage Corp. shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information in
connection with the Purchaser's secondary marketing operations and the
purchase and sale of mortgages or servicing rights thereto;
(42) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, such lease conforms to the requirements required by Xxxxxx Xxx
pursuant to the Xxxxxx Xxx Guides;
(43) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans (a) is covered by the Home Ownership and Equity Protection
Act of 1994 or (b) is classified as a "high cost home," "threshold,"
"covered", "high risk home", "predatory" or similar loan under any other
applicable federal, state or local law (or a similarly 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 and/or fees) or (c) is a Mortgage Loan
categorized as "High Cost" or "Covered", as applicable (as such terms are
defined in the then current Standard & Poor's LEVELS(R) Glossary);
(44) Prepayment Charge. None of the Mortgage Loans has a Prepayment
Premium period at origination in excess of three years;
(45) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines, as may be amended from time to time by WMC Mortgage Corp. The
Mortgage Note and Mortgage are on forms acceptable to prudent mortgage
lenders in the secondary mortgage market and no representations have been
made to a Mortgagor that are inconsistent with the mortgage instruments
used;
(46) Single-Premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance or acquire a single-premium credit life insurance
policy;
(47) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
Underwriting Guidelines;
(48) No Mortgaged Property Located in Georgia. There is no Mortgage
Loan that was originated on or after October 1, 2002 and prior to March 7,
2003, that is secured by property located in the State of Georgia. There
is no Mortgage Loan that was originated after March 7, 2003 that is a
"high-cost home loan" as defined under the Georgia Fair Lending Act;
(49) Conversion to Fixed Interest Rate. With respect to each
Adjustable Rate Mortgage Loan, the Mortgage Loan is not a Convertible
Mortgage Loan;
(50) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(51) Compliance with Anti-Money Laundering Laws. WMC Mortgage Corp.
has complied with all applicable anti-money laundering laws and
regulations, including, without limitation, the USA Patriot Act of 2001;
(52) Credit Reporting. WMC Mortgage Corp. (or its sub-servicer) has
caused to be fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information
(i.e., favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis;
(53) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of Xxxxxx Xxx Guides;
(54) Mortgagor Selection. No Mortgagor was encouraged or required to
select a Mortgage Loan product offered by WMC Mortgage Corp. which is a
higher cost product designed for less creditworthy mortgagors, unless at
the time of the Mortgage Loan's origination, such Mortgagor did not
qualify taking into account credit history and debt-to-income ratios for a
lower-cost credit product then offered by WMC Mortgage Corp. or any
Affiliate of WMC Mortgage Corp. with which WMC Mortgage Corp. has a
referral relationship or mechanism in place. If, at the time of loan
application, the Mortgagor may have qualified for a lower-cost credit
product then offered by any mortgage lending Affiliate of WMC Mortgage
Corp. with which WMC Mortgage Corp. has a referral relationship or
mechanism in place, WMC Mortgage Corp. referred the related Mortgagor's
application to such Affiliate for underwriting consideration;
(55) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income,
assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the related Mortgagor'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 (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan;
(56) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the related Mortgagor was
offered the option of obtaining a mortgage loan that did not require
payment of such a premium (provided, that such offer may have been
evidenced by the Responsible Party's rate sheet/pricing grid relating to
such Mortgage Loan, which provided that the Mortgage Loan had a full
prepayment premium buy-out pricing adjustment available), (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage
Loan documents pursuant to applicable state and federal law, and (iv)
notwithstanding any state or federal law to the contrary, WMC Mortgage
Corp., as prior servicer, did not impose such prepayment premium in any
instance when the mortgage debt is accelerated as the result of the
related Mortgagor's default in making the Mortgage Loan payments;
(57) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a
condition of obtaining the extension of credit. No Mortgagor obtained a
prepaid single-premium credit life, disability, accident or health
insurance policy in connection with the origination of the Mortgage Loan.
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, such Mortgage Loan;
(58) [Reserved];
(59) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each
Mortgage Loan, have been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation;
(60) No Default under First Lien. As of the Servicing Transfer Date
and to the knowledge of WMC Mortgage Corp. and its Affiliates as of the
Closing Date, with respect to each Second Lien Mortgage Loan, the related
first lien mortgage loan is in full force and effect, and there is no
default, breach, violation or event which would permit acceleration
existing under such first lien mortgage or mortgage note, and no event
which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration thereunder;
(61) Right to Cure First Lien. With respect to each Second Lien
Mortgage Loan, the related first lien mortgage contains a provision which
provides for giving notice of default or breach to the mortgagee under
such Second Lien Mortgage Loan and allows such mortgagee to cure any
default under the related first lien mortgage;
(62) No Failure to Cure Default. With respect to each Second Lien
Mortgage Loan, WMC Mortgage Corp. has not received a written notice of
default of any senior mortgage loan related to the Mortgaged Property
which has not been cured;
(63) Request for Notice; No Consent Required. With respect to any
Second Lien Mortgage Loan, where required or customary in the jurisdiction
in which the Mortgaged Property is located, the original lender has filed
for record a request for notice of any action by the related senior
lienholder, and WMC Mortgage Corp. has notified the senior lienholder in
writing of the existence of the Second Lien Mortgage Loan and requested
notification of any action to be taken against the Mortgagor by the senior
lienholder. Either (a) no consent for the Second Lien Mortgage Loan is
required by the holder of the related first lien or (b) such consent has
been obtained and is contained in the Mortgage File;
(64) Tax Service Contract. As of the date on which WMC Mortgage
Corp. transferred the servicing of such Mortgage Loan to the Purchaser or
its designee, each Mortgage Loan was covered by a paid in full, life of
loan, tax service contract issued by Fidelity National Tax Service, and
such contract was transferable;
(65) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to
the ability of the Mortgagor to repay and the extension of credit which
has no apparent benefit to the Mortgagor, were employed in the origination
of the Mortgage Loan;
(66) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment
to the Purchaser) have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as
against creditors of WMC Mortgage Corp., or is in the process of being
recorded;
(67) Mortgagor Bankruptcy. On or prior to the date 60 days after the
date on which WMC Mortgage Corp. transferred the Mortgage Loan to the
Purchaser, the Mortgagor has not filed and will not file a bankruptcy
petition or has not become the subject and will not become the subject of
involuntary bankruptcy proceedings or has not consented to or will not
consent to the filing of a bankruptcy proceeding against it or to a
receiver being appointed in respect of the related Mortgaged Property;
(68) No Prior Offer. Prior to the transfer of the Mortgage Loan to
the Purchaser, the Mortgage Loan had not been previously rejected by a
third-party purchaser; and
(69) No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction.
SCHEDULE VI
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-HE3
Representations and Warranties of NC Capital
as to the NC Capital Mortgage Loans
NC Capital hereby makes the representations and warranties set forth
in this Schedule VI, as to NC Capital Mortgage Loans only, to the Depositor, the
Servicers and the Trustee, as of July 30, 2005 (the "Securitization Closing
Date") (unless otherwise expressly indicated). Capitalized terms used but not
otherwise defined in this Schedule VI shall have the meanings ascribed thereto
in the NC Capital Purchase Agreement.
(1) Mortgage Loans as Described. NC Capital has delivered to the
Purchaser, as of July 1, 2005, the Data Tape Information and that Data
Tape Information and the information set forth on the Mortgage Loan
Schedule (other than item (21) thereof, as to which NC Capital makes no
representation or warranty) are true and correct, including, without
limitation, the terms of the Prepayment Charges, if any, as of the
Securitization Closing Date;
(2) Payments Current. Except with respect to NC Capital Mortgage
Loans representing approximately 4.91% of the aggregate principal balance
of NC Capital Mortgage Loans as of the Cut-off Date, all payments required
to be made up to July 1, 2005 for the Mortgage Loan under the terms of the
Mortgage Note, other than payments not yet 30 days delinquent, have been
made and credited. No payment required under the Mortgage Loan is 30 days
or more delinquent nor has any payment under the Mortgage Loan been 30
days or more delinquent at any time since the origination of the Mortgage
Loan. The first Scheduled Payment was or shall be made with respect to the
Mortgage Loan on its Due Date or within the grace period, all in
accordance with the terms of the related Mortgage Note;
(3) No Outstanding Charges. Except with respect to NC Capital
Mortgage Loans representing approximately 4.91% of the aggregate principal
balance of NC Capital Mortgage Loans as of the Cut-off Date, there are no
defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due
and owing have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and
which has been assessed but is not yet due and payable. Neither NC Capital
nor any Affiliate has 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 under the
Mortgage Loan, except for interest accruing from the date of the Mortgage
Note or date of disbursement of the Mortgage Loan proceeds, whichever is
earlier, to the day which precedes by one month the Due Date of the first
installment of principal and interest;
(4) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any
respect from the date of origination, except by a written instrument which
has been recorded, if necessary to protect the interests of the Purchaser,
and which has been delivered to the Trustee and the terms of which are
reflected in the Mortgage Loan Schedule, the Data Tape Information or
included in the Mortgage File. The substance of any such waiver,
alteration or modification has been approved by the title insurer, if any,
to the extent required by the policy, and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Trustee and
the terms of which are reflected in the Mortgage Loan Schedule and the
Data Tape Information;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage unenforceable,
in whole or in part, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(6) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Xxxxxx Xxx
Guides or by Freddie Mac, as well as all additional requirements set forth
in Section 3.13 of the Pooling and Servicing Agreement. If required by the
National Flood Insurance Act of 1968, as amended, the Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect
which policy conforms to Xxxxxx Xxx and Freddie Mac, as well as all
additional requirements set forth in Section 3.13 of the Pooling and
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming New Century Mortgage Corporation and its
successors and assigns as mortgagee, and all premiums thereon have been
paid. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Xxxxxxxxx's cost and expense,
and to seek reimbursement therefor from the Mortgagor. Where required by
state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy
is not a "master" or "blanket" hazard insurance policy covering a
condominium, or any hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid
and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Trustee
upon the consummation of the transactions contemplated by this Agreement.
NC Capital has not engaged in, and has no knowledge of the Mortgagor's
having engaged in, any act or omission which would impair the coverage of
any such policy, the benefits of the endorsement provided for herein, or
the validity and binding effect of either, including, without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or
value of any kind has been or will be received, retained or realized by
any attorney, firm or other person or entity, and no such unlawful items
have been received, retained or realized by NC Capital;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions therein relating to the Illinois Interest Act
and Prepayment Charges, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any
such laws or regulations, and NC Capital shall maintain in its possession,
available for the Purchaser's or the Trustee's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with all such
requirements;
(8) No Satisfaction of Mortgage. Other than with respect to any
Mortgage Loan that was subject to a Principal Prepayment in Full occurring
after the Cut-off Date but prior to the Securitization Closing Date, the
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from
the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination
or rescission. NC Capital has not waived the performance by the Mortgagor
of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has NC Capital waived any
default resulting from any action or inaction by the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low rise condominium project, or an
individual unit in a planned unit development or a de minimis planned unit
development which is in each case four stories or less; provided, however,
that any condominium unit, planned unit development, mobile home (double
wide only) or manufactured dwelling shall conform with the applicable
Xxxxxx Xxx and Freddie Mac requirements regarding such dwellings and that
no Mortgage Loan is secured by a single parcel of real property with a
cooperative housing corporation, a log home or, except as specified on the
Mortgage Loan Schedule, a mobile home erected thereon or by a mixed use
property, a property in excess of 10 acres or other unique property types.
As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not
be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. With respect to
any Mortgage Loan secured by a Mortgaged Property improved by manufactured
housing, (i) such Mortgage Loan conforms with the applicable Xxxxxx Xxx or
Freddie Mac requirements regarding mortgage loans related to manufactured
dwellings, (ii) the related manufactured housing unit is permanently
affixed to the land, (iii) the related manufactured housing unit and the
related land are subject to a Mortgage properly filed in the appropriate
public recording office and naming New Century Mortgage Corporation as
mortgagee, (iv) the applicable laws of the jurisdiction in which the
related Mortgaged Property is located will deem the manufactured dwelling
located on such Mortgaged Property to be a part of the real property on
which such dwelling is located and (v) such Manufactured Home Mortgage
Loan is secured by manufactured housing treated as a single family
residence under Section 25(e)(10) of the Code;
(10) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected first lien (with respect to each First Lien
Mortgage Loan) or second lien (with respect to each Second Lien Mortgage
Loan) on the Mortgaged Property, including all buildings and improvements
on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located in or
annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage
is subject only to:
(i) with respect to a Second Lien Mortgage Loan only, the lien
of the first mortgage on the Mortgaged Property;
(ii) the lien of current real property taxes and assessments
not yet due and payable;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iv) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property;
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority (with
respect to each First Lien Mortgage Loan) or second lien and second priority
(with respect to each Second Lien Mortgage Loan) security interest on the
property described therein and NC Capital has full right to sell and assign the
same to the Purchaser;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms (including, without limitation, any provisions therein relating
to Prepayment Charges). All parties to the Mortgage Note, the Mortgage and
any other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage
and any such agreement, and the Mortgage Note, the Mortgage and any other
such related agreement have been duly and properly executed by other such
related parties. No fraud, error, omission, misrepresentation, negligence
or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. NC Capital or its Affiliate has reviewed
all of the documents constituting the Servicing File and NC Capital has
made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;
(12) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(13) Ownership. Immediately prior to the transfer contemplated by
the Purchase Agreement, NC Capital was the sole owner of record and holder
of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note
and upon the sale of the Mortgage Loans to the Purchaser, NC Capital
retained the Mortgage Files or any part thereof with respect thereto not
delivered to the Purchaser or the Purchaser's designee, in trust only for
the purpose of servicing and supervising the servicing of each Mortgage
Loan. The Mortgage Loan was not assigned or pledged, and NC Capital had
good, indefeasible and marketable title thereto, and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest, and has full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell
and assign each Mortgage Loan pursuant to the Purchase Agreement and
following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest. After the
Securitization Closing Date, NC Capital will have no right to modify or
alter the terms of the sale of the Mortgage Loan and NC Capital will have
no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(14) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located, and
(2) either (i) organized under the laws of such state, or (ii) qualified
to do business in such state, or (iii) a federal savings and loan
association, a savings bank or a national bank having a principal office
in such state, or (3) not doing business in such state;
(15) LTV. No First Lien Mortgage Loan has an LTV greater than 100%,
and no Second Lien Mortgage Loan has an CLTV greater than 100%;
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Freddie Mac with respect
to Mortgage Loans and each such title insurance policy is issued by a
title insurer acceptable to Xxxxxx Xxx or Freddie Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring New Century Mortgage Corporation, its successors and assigns, as
to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan, subject only to the exceptions contained in
clauses (i), (ii) and (iii) of representation 10 of this Schedule VI, and
in the case of Adjustable Rate Mortgage Loans, against any loss by reason
of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Rate
and Scheduled Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
NC Capital, its successor and assigns, are the sole insureds of such
lender's title insurance policy, and such lender's title insurance policy
is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including New Century
Mortgage Corporation and NC Capital, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy, including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or
will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained
or realized by New Century Mortgage Corporation or NC Capital;
(17) No Defaults. Except with respect to NC Capital Mortgage Loans
representing approximately 4.91% of the aggregate principal balance of NC
Capital Mortgage Loans as of the Cut-off Date, other than payments due but
not yet 30 or more days delinquent, there is no default, breach, violation
or event which would permit acceleration existing under the Mortgage or
the Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and
neither NC Capital nor its Affiliates or any of their respective
predecessors have waived any default, breach, violation or event which
would permit acceleration;
(18) No Mechanics' Liens. As of the date of origination, there are
no mechanics' or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could
give rise to such liens) affecting the related Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being
part of the Mortgaged Property is in violation of any applicable zoning
law or regulation;
(20) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a Mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act,
a savings and loan association, a savings bank, a commercial bank, credit
union, insurance company or other similar institution which is supervised
and examined by a federal or state authority, or (b) the following
requirements have been met with respect to the Mortgage Loan: NC Capital
purchased the Mortgage Loan from New Century Mortgage Corporation, its
affiliate, that meets the requirements set forth in clause (a), and (i)
such Mortgage Loan was underwritten in accordance with standards
established by New Century Mortgage Corporation, using application forms
and related credit documents approved by New Century Mortgage Corporation,
(ii) New Century Mortgage Corporation approved each application and the
related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until New Century Mortgage
Corporation agreed to fund such Mortgage Loan, (iii) the closing documents
for such Mortgage Loan were prepared on forms approved by New Century
Mortgage Corporation and (iv) such Mortgage Loan was actually funded by
New Century Mortgage Corporation and was purchased by New Century Mortgage
Corporation at closing or soon thereafter. The documents, instruments and
agreements submitted for loan underwriting were not falsified and contain
no untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the information and
statements therein not misleading. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Rate is as set forth on Mortgage Loan
Schedule hereto (including in the case of Adjustable Rate Mortgage Loans,
the interest rate and payment limitations set forth on Mortgage Loan
Schedule hereto). All Mortgage Loans have Due Dates on the first day of
each month except as specified on the Mortgage Loan Schedule. Each
Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the
Mortgage Rate on each Interest Rate Adjustment Date, with interest
calculated and payable in arrears and is not calculated on a simple
interest basis. The monthly principal payments on each Mortgage Loan is
sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from
commencement of amortization. There is no negative amortization allowed in
the terms of any Mortgage Note. None of the Mortgage Loans allows for
negative amortization or the conversion of the interest rate thereon from
an adjustable rate to a fixed rate or from a fixed rate to an adjustable
rate. No Mortgage Loan is a Balloon Loan;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(22) Index. With respect to Adjustable Rate Mortgage Loans, the
Index set forth in the Mortgage Note is LIBOR;
(23) Occupancy of the Mortgaged Property. As of the Securitization
Closing Date the Mortgaged Property is lawfully occupied under applicable
law. 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, but not
limited to, certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate authorities;
(24) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(26) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Purchaser;
(27) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form, other than the assignee's name and recording information
not yet returned from the recording office, and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by NC Capital are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(28) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior
written consent of the mortgagee thereunder, and such provision is
enforceable;
(29) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Scheduled Payments are paid or partially paid with funds deposited in any
separate account established by NC Capital, the Mortgagor, or anyone on
behalf of the Mortgagor, or paid by any source other than the Mortgagor
nor does it contain any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage
loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(30) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed
if the party assuming such Mortgage Loan meets certain credit requirements
stated in the Mortgage Loan Documents;
(31) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority by a
title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable to
Xxxxxx Xxx and Freddie Mac. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(32) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended and each Mortgaged Property is in good repair.
There have not been any condemnation proceedings with respect to the
Mortgaged Property and NC Capital has no knowledge of any such proceedings
in the future;
(33) Collection Practices; Escrow Payments; Interest Rate
Adjustments. The origination, servicing and collection practices used by
NC Capital and its Affiliates with respect to the Mortgage Loan have been
in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and
proper. With respect to escrow deposits and Escrow Payments, if any, all
such payments are in the possession of, or under the control of, NC
Capital and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage.
An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due NC Capital
have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Rate adjustments have been made in strict compliance with state
and federal law and the terms of the related Mortgage Note. If, pursuant
to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such
selection did not conflict with the terms of the related Mortgage Note. NC
Capital or an Affiliate executed and delivered any and all notices
required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Rate and the monthly payment
adjustments. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited;
(34) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or
will result in the exclusion from, denial of, or defense to coverage under
any insurance policy or bankruptcy bond related to the Mortgage Loans,
irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by NC Capital or by any officer,
director, or employee of NC Capital or any designee of NC Capital or any
corporation in which NC Capital or any officer, director, or employee had
a financial interest at the time of placement of such insurance;
(35) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with
respect to the Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(36) Servicemembers Civil Relief Act. The Mortgagor has not notified
NC Capital, and NC Capital has no knowledge of any relief requested or
allowed to the Mortgagor under the Servicemembers Civil Relief Act or any
similar state statutes;
(37) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed by a qualified appraiser, acceptable to
NC Capital, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of Xxxxxx Xxx or Freddie Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(38) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials
required by, and the originator has complied with all applicable law with
respect to the making of the Mortgage Loans;
(39) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(40) Value of Mortgaged Property. NC Capital has no knowledge of any
circumstances existing that could reasonably be expected to adversely
affect the value or the marketability of any Mortgaged Property or
Mortgage Loan or to cause the Mortgage Loans to prepay during any period
materially faster or slower than similar mortgage loans held by NC Capital
generally secured by properties in the same geographic area as the related
Mortgaged Property;
(41) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or
has existed on or prior to the Securitization Closing Date (whether or not
known to NC Capital on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any
primary mortgage insurance (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the
timely payment of the full amount of the loss otherwise due thereunder to
the insured) whether arising out of actions, representations, errors,
omissions, negligence, or fraud of NC Capital, the related Mortgagor or
any party involved in the application for such coverage, including the
appraisal, plans and specifications and other exhibits or documents
submitted therewith to the insurer under such insurance policy, or for any
other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy
or such insurer's financial inability to pay;
(42) Escrow Analysis. With respect to each Mortgage, NC Capital or
its Affiliate has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so
that, assuming all required payments are timely made, any deficiency will
be eliminated on or before the first anniversary of such analysis, or any
overage will be refunded to the Mortgagor, in accordance with RESPA and
any other applicable law;
(43) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(44) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by NC Capital to the Purchaser, that Seller has full
right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser;
(45) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage of
the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to
cure, such default, (b) allow the termination of the lease in the event of
damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent
other than pre-established increases set forth in the lease; (4) the
original term of such lease is not less than 15 years; (5) the term of
such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring
ownership in residential properties is a generally accepted practice;
(46) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans (a) is covered by the Home Ownership and Equity Protection
Act of 1994 or (b) is classified as a "high cost home," "threshold,"
"covered" (excluding a "covered home loan" as defined in clause (1) of the
definition of such term under the New Jersey Home Ownership Security Act
of 2002), "high risk home", "predatory" or similar loan under any other
applicable federal, state or local law (including without limitation any
regulation or ordinance) (or a similarly 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 and/or fees) or (c) is a Mortgage Loan categorized
as "High Cost" or "Covered" pursuant to Appendix E of the Standard &
Poor's Glossary, and no Mortgage Loan originated on or after October 1,
2002 through July 6, 2003 is governed by the Georgia Fair Lending Act;
(47) Prepayment Penalty. No Mortgage Loan has a prepayment penalty
period in excess of three years. Any prepayment penalty is in an amount
equal to the lesser of (a) the maximum amount permitted under applicable
state law, and (b) if the Mortgaged Property is secured by residential
real property located in a state other than Arizona, Maine, Massachusetts,
New York, South Carolina or Wisconsin, six months interest on the related
prepaid amount;
(48) [Reserved];
(49) Conformance with Agency and Underwriting Standards. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines. The Mortgage Note and Mortgage are on forms acceptable to
Freddie Mac or Xxxxxx Xxx and neither NC Capital nor any Affiliate has
made any representations to a Mortgagor that are inconsistent with the
mortgage instruments used;
(50) Single-Premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance or acquire a single-premium credit life insurance
policy;
(51) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors who invest in mortgage
loans similar to the Mortgage Loan to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan, or cause
the Mortgage Loans to prepay during any period materially faster or slower
than the mortgage loans originated by NC Capital or any Affiliates
generally;
(52) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
originator's Underwriting Guidelines;
(53) Conversion to Fixed Interest Rate. With respect to each
Adjustable Rate Mortgage Loan, the Mortgage Loan is not a Convertible
Mortgage Loan;
(54) No Default Under First Lien. With respect to each Second Lien
Mortgage Loan, the related First Lien Mortgage Loan related thereto is in
full force and effect, and there is no default, breach, violation or event
which would permit acceleration existing under such first Mortgage or
Mortgage Note, and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration
thereunder;
(55) Right to Cure First Lien. With respect to each Second Lien
Mortgage Loan, the related first lien Mortgage contains a provision which
provides for giving notice of default or breach to the mortgagee under the
Mortgage Loan and allows such mortgagee to cure any default under the
related first lien Mortgage;
(56) No Failure to Cure Default. NC Capital has not received a
written notice of default of any senior mortgage loan related to the
Mortgaged Property which has not been cured;
(57) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(58) Compliance with Anti-Money Laundering Laws. NC Capital or an
Affiliate has complied with all applicable anti-money laundering laws and
regulations, including, without limitation, the USA Patriot Act of 2001;
(59) Fair Credit Reporting Act. NC Capital or an Affiliate has, in
its capacity as prior servicer for each Mortgage Loan, fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis;
(60) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of Xxxxxx Xxx Guides;
(61) Mortgagor Selection. No Mortgagor was encouraged or required to
select a Mortgage Loan product offered by the originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time
of the Mortgage Loan's origination, such Xxxxxxxxx did not qualify taking
into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the originator or any Affiliate of the
originator. If, at the time of loan application, the Mortgagor may have
qualified for a lower-cost credit product then offered by any mortgage
lending Affiliate of the originator, the originator referred the related
Mortgagor's application to such Affiliate for underwriting consideration;
(62) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income,
assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the related Mortgagor'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 (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan;
(63) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the related Mortgagor was
offered the option of obtaining a mortgage loan that did not require
payment of such a premium, (iii) the prepayment premium is disclosed to
the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state or
federal law to the contrary, the originator, as servicer, shall not impose
such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(64) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, disability,
property, accident, unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of
credit. No Mortgagor obtained a prepaid single premium credit insurance
policy (e.g., life, disability, property, 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 single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(65) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. Except in the case of a
Mortgage Loan in an original principal amount of less than $60,000 which
would have resulted in an unprofitable origination, no Mortgagor was
charged "points and fees" (whether or not financed) in an amount greater
than 5% of the principal amount of such Mortgage Loan, such 5% limitation
is calculated in accordance with Fannie Mae's anti-predatory lending
requirements as set forth in the Xxxxxx Xxx Guides;
(66) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each
Mortgage Loan, have been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation; and
(67) No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction.
SCHEDULE VII
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-HE3
Representations and Warranties of Accredited
as to the Accredited Mortgage Loans
Accredited hereby makes the representations and warranties set forth
in this Schedule VII, as to Accredited Mortgage Loans only, to the Depositor,
the Servicers and the Trustee, as of July 21, 2005 (the "Securitization Closing
Date") (unless otherwise expressly indicated). Capitalized terms used but not
otherwise defined in this Schedule VII shall have the meanings ascribed thereto
in the Accredited Purchase Agreement.
(1) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule as prepared by the Purchaser (the "Information") is
complete, true and correct as of the date on which Accredited transferred
servicing of the Mortgage Loan to the Purchaser or its designee (the "Accredited
Transfer Date") or, if earlier, July 1, 2005 (the "Securitization Cut-off
Date"), and such Information was provided to the Purchaser by Accredited;
(2) Payments Current. Except with respect to Accredited Mortgage
Loans representing approximately 0.53% of the aggregate principal balance of
Accredited Mortgage Loans as of the Cut-off Date, all payments required to be
made up to the Securitization Closing Date for the Mortgage Loan under the terms
of the Mortgage Note, other than payments not yet 30 days delinquent, have been
made and credited. No payment required under the Mortgage Loan is 30 days or
more delinquent nor has any payment under the Mortgage Loan been 30 days or more
delinquent at any time since the origination of the Mortgage Loan;
(3) No Outstanding Charges. Except with respect to Accredited
Mortgage Loans representing approximately 0.53% of the aggregate principal
balance of Accredited Mortgage Loans as of the Cut-off Date, as of the Cut-off
Date, and to Accredited's knowledge as of the Securitization Closing Date, there
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. Accredited 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 under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(4) Original Terms Unmodified. As of Accredited Transfer Date, the
terms of the Mortgage Note and Mortgage have not been impaired, waived, altered
or modified in any respect, from the date of origination except by a written
instrument which has been recorded, if necessary to protect the interests of the
Purchaser, and which has been delivered to the Custodian or to such other Person
as the Purchaser shall designate in writing, and the terms of which are
reflected in the Mortgage Loan Schedule. The substance of any such waiver,
alteration or modification has been approved by the title insurer, if any, to
the extent required by the policy, and its terms are reflected on the Mortgage
Loan Schedule, if applicable. As of Accredited Transfer Date, no Mortgagor has
been released, in whole or in part, except in connection with an assumption
agreement, approved by the issuer of the title insurer, to the extent required
by the policy, and which assumption agreement is part of the Mortgage Loan File
delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing and the terms of which are reflected in the Mortgage Loan
Schedule;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was funded;
(6) Hazard Insurance. As of the Accredited Transfer Date, pursuant
to the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable insurer against loss by
fire, hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located pursuant to insurance policies
conforming to the requirements of Xxxxxx Xxx and Freddie Mac, as well as all
additional requirements set forth in Section 2.10 of the Interim Servicing
Agreement. As of Accredited Transfer Date, if required by the National Flood
Insurance Act of 1968, as amended, each Mortgage Loan is covered by a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to Xxxxxx
Xxx and Freddie Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming Accredited and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Xxxxxxxxx's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the purchase of the Mortgage Loan as contemplated by this
Agreement. Accredited has not engaged in, and has no knowledge of the
Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by Accredited;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to Prepayment Charges, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any such laws
or regulations, and Accredited shall maintain in its possession, available for
the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements. Notwithstanding the
foregoing, Accredited shall not be responsible for a breach of a federal, state
or local law, other than those governing the origination of the Mortgage Loan,
following Accredited Transfer Date;
(8) No Satisfaction of Mortgage. As of Accredited Transfer Date, the
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
Accredited has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has Accredited waived any default resulting from any action or
inaction by the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule, except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the Mortgaged Property may be a leasehold estate, and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development and that no residence or dwelling is a mobile home,
provided, however, that any condominium unit or planned unit development shall
not fall within any of the "Ineligible Projects" of part XII, Section 102 of the
Xxxxxx Xxx Selling Guide and shall conform with the Underwriting Guidelines. In
the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loans"), (i) such Manufactured Home Mortgage Loan
conforms with the applicable Xxxxxx Xxx or Freddie Mac requirements regarding
mortgage loans related to manufactured dwellings, (ii) the related manufactured
dwelling is permanently affixed to the land, (iii) the related manufactured
dwelling and the related land are subject to a Mortgage properly filed in the
appropriate public recording office and naming Accredited as mortgagee, (iv) the
applicable laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged Property
to be a part of the real property on which such dwelling is located, and (v)
such Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section
860G(a)(3) of the Internal Revenue Code of 1986, as amended and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and to Accredited's
knowledge since the Closing Date, no portion of the Mortgaged Property has been
used for commercial purposes; provided, that Mortgaged Properties which contain
a home office shall not be considered as being used for commercial purposes as
long as the Mortgaged Property has not been altered for commercial purposes and
is not storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;
(10) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and Accredited has full right to sell
and assign the same to the Purchaser. As used in this Schedule, "enforceable"
shall be deemed to be subject to bankruptcy laws and general principles of
equity;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms, (including, without limitation, any provisions therein relating to
Prepayment Charges). All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related parties. As
of the Closing Date, and to Accredited's knowledge, as of the Securitization
Closing Date, no fraud, error, omission, misrepresentation, or similar
occurrence with respect to the origination of a Mortgage Loan has taken place on
the part of any Person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. Accredited has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(12) Full Disbursement of Proceeds. Except to the extent the
Mortgage Loan is subject to completion escrows which have been disclosed to and
acknowledged by the Purchaser and which meet the requirements of the
Underwriting Guidelines, and as to which a completed Xxxxxx Xxx form 442 has
been delivered to the Purchaser within sixty (60) days after the Closing Date,
the Mortgage Loan has been closed and the proceeds of the Mortgage Loan have
been fully disbursed and there is no requirement for future advances thereunder,
and any and all requirements as to completion of any on-site or off-site
improvement and as to disbursements of any escrow funds therefor have been
complied with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is
not entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(13) Ownership. As of the Closing Date, Accredited was the sole
owner of record and holder of the Mortgage Loan and the indebtedness evidenced
by each Mortgage Note and upon the sale of the Mortgage Loans to the Purchaser,
Accredited will retain the Mortgage Files or any part thereof with respect
thereto not delivered to the Custodian, the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. As of the Closing Date, upon payment of the
Purchase Price, the Mortgage Loan was not assigned or pledged, and Accredited
had good, indefeasible and marketable title thereto, and has full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and had full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to the Purchase Agreement and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. As of the Closing Date, Accredited intended to relinquish all
rights to possess, control and monitor the Mortgage Loan. After the Closing
Date, Accredited will have no right to modify or alter the terms of the sale of
the Mortgage Loan and Accredited will have no obligation or right to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as provided in
this Agreement;
(14) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (2) either (i) organized under the laws of such state, or (ii) qualified to
do business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or (3)
not doing business in such state;
(15) LTV. No Mortgage Loan had an LTV at origination greater than
100%;
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring Accredited, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan (or to the
extent a Mortgage Note provides for negative amortization, the maximum amount of
negative amortization in accordance with the Mortgage), subject only to the
exceptions contained in clauses (i), (ii) and (iii) of paragraph (10) of this
Schedule VII, and in the case of adjustable rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. Accredited, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the purchase of the
Mortgage Loan as contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including Accredited, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by Accredited;
(17) No Defaults. Except with respect to Accredited Mortgage Loans
representing approximately 0.53% of the aggregate principal balance of
Accredited Mortgage Loans as of the Cut-off Date, other than payments due but
not yet 30 days or more delinquent, as of the Closing Date and to Accredited's
knowledge as of the Securitization Closing Date, there is no default, breach,
violation or event which would permit acceleration existing under the Mortgage
or the Mortgage Note and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration, and neither
Accredited nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(18) No Mechanics' Liens. Except as insured against by the related
title insurance, as of the Closing Date and to Accredited's knowledge as of the
Securitization Closing Date, there are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under the law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. As of the Closing Date, and to Accredited's knowledge as
of the Securitization Closing Date, no improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;
(20) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: Accredited meets the requirements set forth
in clause (a) and (i) such Mortgage Loan was underwritten in accordance with
standards established by Accredited, using application forms and related credit
documents approved by Accredited, (ii) Accredited approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until Accredited agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by Accredited, and (iv) such Mortgage Loan was actually funded
by Accredited and was purchased by Accredited at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
are required to commence no more than sixty days after funds were disbursed in
connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Cap, are as set forth on the Mortgage Loan
Schedule. Except with respect to a "balloon" Mortgage Loan, the Mortgage Note is
payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the Mortgage Loan Schedule, the
Mortgage Loan is payable on the first day of each month. There are no
Convertible Mortgage Loans which contain a provision allowing the Mortgagor to
convert the Mortgage Note from an adjustable interest rate Mortgage Note to a
fixed interest rate Mortgage Note;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(22) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Xxxxxx
Xxx and Accredited has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(23) Occupancy of the Mortgaged Property. As of the Closing Date,
and to Accredited's knowledge as of the Securitization Closing Date, the
Mortgaged Property is capable of being lawfully occupied under applicable law.
As of the Closing Date, and to Accredited's knowledge as of the Securitization
Closing Date, 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 but not limited to
certificates of occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities;
(24) No Additional Collateral. As of Accredited Transfer Date, the
Mortgage Note is not and has not been secured by any collateral except the lien
of the corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in paragraph (10) above;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and, as of Accredited Transfer Date, and to
Accredited's knowledge as of the Securitization Closing Date, so serves and is
named in the Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor;
(26) Acceptable Investment. Accredited has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, the Mortgage File or the Mortgagor's credit standing,
other than the subprime nature of such credit standing, that can reasonably be
expected to cause private institutional investors who invest in mortgage loans
similar to the Mortgage Loan, to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan, or cause the Mortgage Loans to
prepay during any period materially faster or slower than the mortgage loans
originated by Accredited generally;
(27) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. Accredited is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A to the Purchase Agreement,
except for such documents the originals of which have been delivered to the
Custodian;
(28) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in Accredited's Underwriting Guidelines;
(29) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by Accredited are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(30) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision (subject to applicable law) for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, and such provision is
enforceable;
(31) [Reserved];
(32) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by Accredited, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(33) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Xxx and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(34) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Closing Date, and to Accredited's knowledge as of the Securitization
Closing Date, there is no proceeding pending or threatened for the total or
partial condemnation of the Mortgaged Property. As of the Closing Date, and to
Accredited's knowledge as of the Securitization Closing Date, the Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair. As of the
Closing Date, there have not been any condemnation proceedings with respect to
the Mortgaged Property and Accredited has no knowledge of any such proceedings
in the future;
(35) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
Accredited with respect to the Mortgage Loan have been in all respects in
compliance with Accepted Servicing Practices, applicable laws and regulations,
and have been in all respects legal and proper. With respect to escrow deposits
and Escrow Payments, all such payments are in the possession of, or under the
control of, Accredited through Accredited Transfer Date, and, as of such date,
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. As of Accredited Transfer
Date, all Escrow Payments collected by Accredited have been collected in full
compliance with state and federal law and the provisions of the related Mortgage
Note and Mortgage. An escrow of funds is not prohibited by applicable law and,
as of Accredited Transfer Date, all escrows that have been established have been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. As of Accredited Transfer
Date, no escrow deposits or Escrow Payments or other charges or payments due
Accredited have been capitalized by Accredited under the Mortgage or the
Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage and
Mortgage Note on the related Interest Rate Adjustment Date. If, pursuant to the
terms of the Mortgage Note, another index was selected for determining the
Mortgage Interest Rate, the same index was used with respect to each Mortgage
Note which required a new index to be selected, and such selection did not
conflict with the terms of the related Mortgage Note. Accredited executed and
delivered any and all notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the
Monthly Payment adjustments. As of Accredited Transfer Date, any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(36) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(37) Other Insurance Policies. As of Accredited Transfer Date, no
action, inaction or event has occurred and no state of facts exists or has
existed that has resulted or will result in the exclusion from, denial of, or
defense to coverage under any applicable, special hazard insurance policy, or
bankruptcy bond, irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by Accredited or by any officer,
director, or employee of Accredited or any designee of Accredited or any
corporation in which Accredited or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(38) No Violation of Environmental Laws. As of the Closing Date, and
to Accredited's knowledge as of the Securitization Closing Date, there is no
pending action or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue. As of the
Closing Date, to Accredited's knowledge, based upon customary and prudent
residential mortgage industry underwriting standards, and to Accredited's
knowledge as of the Securitization Closing Date, there is no violation of any
environmental law, rule or regulation with respect to the Mortgaged Property,
and nothing further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(39) Servicemembers Civil Relief Act. The Mortgagor has not notified
Accredited, and Accredited has no knowledge of any relief requested or allowed
to the Mortgagor under the Servicemembers Civil Relief Act or any similar state
statute;
(40) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by Accredited, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Xxxxxx Xxx or Freddie Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(41) Disclosure Materials. The Mortgagor has executed one or more
statements to the effect that the Mortgagor has received all disclosure
materials required by, and Accredited has complied with, all applicable law with
respect to the making of the Mortgage Loans. Accredited shall maintain such
statement(s) in the Mortgage File;
(42) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(43) Value of Mortgaged Property. Accredited has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by Accredited generally secured by properties
in the same geographic area as the related Mortgaged Property;
(44) No Defense to Insurance Coverage. As of Accredited Transfer
Date, no action has been taken or failed to be taken, no event has occurred and
no state of facts exists or has existed on or prior to the Closing Date (whether
or not known to Accredited on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any primary
mortgage insurance (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of Accredited, the related Mortgagor or any party involved in the application
for such coverage, including the appraisal, plans and specifications and other
exhibits or documents submitted therewith to the insurer under such insurance
policy, or for any other reason under such coverage, but not including the
failure of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;
(45) Escrow Analysis. With respect to each Mortgage, Accredited has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(46) Prior Servicing. As of Accredited Transfer Date, each Mortgage
Loan had been serviced by Accredited in all material respects in strict
compliance with Accepted Servicing Practices;
(47) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by Accredited to the Purchaser, that Accredited has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. Accredited
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(48) Leaseholds. As of the Closing Date and to Accredited's
knowledge as of Accredited Transfer Date, if the Mortgage Loan is secured by a
long-term residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the collateral assignment of the lease
without the lessor's consent (or such consent has been obtained) and the
acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(49) Prepayment Penalty. (i) Each Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note, except as set forth
on the Mortgage Loan Schedule, and (ii) no such prepayment penalty may be
imposed for a term in excess of five (5) years from the date of origination;
(50) Predatory Lending Regulations. None of the Mortgage Loans (a)
is covered by the Home Ownership and Equity Protection Act of 1994 or (b) is
classified as a "high cost home," "threshold," "covered" (excluding a "covered
home loan" as defined in clause (1) of the definition of such term under the New
Jersey Home Ownership Security Act of 2002), "high risk home", "predatory" or
similar loan under any other applicable federal, state or local law (including
without limitation any regulation or ordinance) (or a similarly 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 and/or fees) or (c) is a Mortgage Loan categorized as
"High Cost" or "Covered" pursuant to Appendix E of the Standard & Poor's
Glossary, and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act;
(51) Single-Premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(52) Compliance with Anti-Money Laundering Laws. Accredited has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws");
(53) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(54) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service, and such contract is transferable;
(55) Fair Credit Reporting Act. Accredited has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis;
(56) Mortgagor Selection. No Mortgagor was 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 mortgagors, unless at
the time of the Mortgage Loan's origination, such Mortgagor did not qualify
taking into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Mortgage Loan's originator or any affiliate
of the Mortgage Loan's originator. If, at the time of loan application, the
Mortgagor may have qualified for a lower-cost credit product then offered by any
mortgage lending affiliate of the Mortgage Loan's originator, the Mortgage
Loan's originator referred the related Mortgagor's application to such affiliate
for underwriting consideration;
(57) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs, in part, objective
mathematical principles which relate the related Mortgagor's income, assets and
liabilities to the proposed payment and such underwriting methodology does not
rely on the extent of the related Mortgagor'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
(application/approval) the related Mortgagor had a reasonable ability to make
timely payments on the Mortgage Loan, relying on the Mortgagor's representation
of the Mortgagor's income in the case of loan programs which did not require
verification of the Mortgagor's income;
(58) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) a mortgage loan without such a premium was
available to the Mortgagor at an interest rate and/or fee structure higher than
that of the Mortgage Loan, (ii) prior to the Mortgage Loan's funding, the
related Mortgagor had the option of obtaining the Mortgage Loan without a
requirement for payment of such a premium, and (iii) the prepayment premium is
disclosed to the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law;
(59) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident, health insurance product or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit life, disability, accident or
health insurance policy in connection with the origination of the Mortgage Loan.
No proceeds from any Mortgage Loan were used to purchase single premium credit
insurance policies or debt cancellation agreements as part of the origination
of, or as a condition to closing, such Mortgage Loan;
(60) [Reserved];
(61) Disclosure of Fees and Charges. All fees and charges (including
finance charges), whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(62) No Arbitration. No Mortgage Loan originated on or after August
1, 2004, requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
SCHEDULE VIII
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2005-HE3
Representations and Warranties of Decision One
as to the Decision One Mortgage Loans
Decision One hereby makes the representations and warranties set
forth in this Schedule VIII, as to Decision One Mortgage Loans only, to the
Depositor, the Servicers and the Trustee, as of July 21, 2005 (the "Closing
Date") (unless otherwise expressly indicated). Capitalized terms used but not
otherwise defined in this Schedule VIII shall have the meanings ascribed thereto
in the Decision One Purchase Agreement.
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule as prepared by the Purchaser is complete, true and
correct as of the Closing Date;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable.
Decision One 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 under the Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day
which precedes by one month the related Due Date of the first installment of
principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards, if any, as are usually and customarily insured against
by prudent mortgage lenders in the community in which the related Mortgaged
Property is located. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to the requirements usually and customarily
insured against by prudent mortgage lenders in the community in which the
related Mortgaged Property is located, as well as all additional requirements
set forth in the Pooling and Servicing Agreement. All individual insurance
policies contain a standard mortgagee clause naming Decision One and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Xxxxxxxxx's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. Decision
One has not engaged in, and has no knowledge of the Mortgagor's having engaged
in, any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by Decision
One;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and Decision One shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. Decision One has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has
Decision One waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule and consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual residential condominium unit in a condominium project, or an
individual unit in a planned unit development and that no residence or dwelling
is a mobile home, provided, however, that any condominium unit or planned unit
development shall not fall within any of the "Ineligible Projects" of part VIII,
Section 102 of the Xxxxxx Xxx Selling Guide and shall conform with the
Underwriting Guidelines. In the case of any Mortgaged Properties that are
manufactured homes (a "Manufactured Home Mortgage Loans"), (i) the related
manufactured dwelling is permanently affixed to the land, (ii) the related
manufactured dwelling and the related land are subject to a Mortgage properly
filed in the appropriate public recording office and naming Seller as mortgagee,
(iii) the applicable laws of the jurisdiction in which the related Mortgaged
Property is located will deem the manufactured dwelling located on such
Mortgaged Property to be a part of the real property on which such dwelling is
located, and (iv) such Manufactured Home Mortgage Loan is (x) a qualified
mortgage under Section 860G(a)(3) of the Internal Revenue Code of 1986, as
amended and (y) secured by manufactured housing treated as a single family
residence under Section 25(e)(10) of the Code. As of the date of origination, no
portion of the Mortgaged Property was used for commercial purposes, and since
the date of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial purposes as long as
the Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(i) the lien of current real property taxes and assessments not yet
due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and (a) specifically
referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and Decision One has full right to
sell and assign the same to the Purchaser.
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any Person, including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application for
any insurance in relation to such Mortgage Loan. Decision One has reviewed all
of the documents constituting the Servicing File and has made such inquiries as
it deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. Decision One is the sole owner of record and holder
of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and
upon the sale of the Mortgage Loans to the Purchaser, Decision One will retain
the Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and Decision One has good,
indefeasible and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. Decision One intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, Decision
One will have no right to modify or alter the terms of the sale of the Mortgage
Loan and Decision One will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring Decision One, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of
this Schedule, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. Decision One, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
Decision One, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by Decision One;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither Decision One nor any of its affiliates
nor any of their respective predecessors, have waived any default, breach,
violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
required to be stated therein or necessary to make the information and
statements therein not misleading. No Mortgage Loan contains terms or provisions
which would result in negative amortization. Principal payments on the Mortgage
Loan commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate as well as, in the case of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as
set forth on the Mortgage Loan Schedule. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty years from commencement of amortization. Unless otherwise
specified on the Mortgage Loan Schedule, the Mortgage Loan is payable on the
first day of each month. The Mortgage Loan does not require a balloon payment on
its stated maturity date, unless otherwise specified in the Mortgage Loan
Schedule;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Xxxxxx
Xxx and Decision One has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. 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 but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the Mortgage Loan
Schedule, the Mortgagor represented at the time of origination of the Mortgage
Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor's
primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. Decision One is in possession of a complete, true
and accurate Mortgage File in compliance with this Agreement, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by Decision One are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of Decision One's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements, if any, stated in
the Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by Decision One, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable under the Underwriting Guidelines. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and Decision One
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
Decision One with respect to the Mortgage Loan have been in all respects in
compliance with Accepted Servicing Practices, applicable laws and regulations,
and have been in all respects legal and proper. With respect to escrow deposits
and Escrow Payments, all such payments are in the possession of, or under the
control of, Decision One and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due to Decision One have been capitalized under the Mortgage
or the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. Decision One
executed and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest
Rate and the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the related Closing Date that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable hazard
insurance policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by Decision One or by any
officer, director, or employee of Decision One or any designee of Decision One
or any corporation in which Decision One or any officer, director, or employee
had a financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgaged
Property; and nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified Decision One, and Decision One has no knowledge of any relief requested
or allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, accepted by Decision One, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and Decision One has complied with, all applicable law with respect to the
making of the Mortgage Loans. Decision One shall maintain such statement in the
Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. Decision One has no knowledge of
any circumstances existing that could reasonably be expected to adversely affect
the value or the marketability of any Mortgaged Property (except as may be
expressly shown in the related appraisal) or Mortgage Loan or to cause the
Mortgage Loans to prepay during any period materially faster or slower than
similar mortgage loans held by Decision One generally secured by properties in
the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to
Decision One on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of Decision
One, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) [Reserved];
(tt) Escrow Analysis. If applicable, with respect to each Mortgage,
Decision One has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(uu) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(vv) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by Decision One to the Purchaser, that Decision one has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or good faith legitimate prospective purchaser of
such Mortgage. Decision One shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's good faith
legitimate secondary marketing operations and the purchase and sale of mortgages
or Servicing Rights thereto;
(ww) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(xx) Prepayment Charge. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
Mortgage Loan Schedule. With respect to Mortgage Loans originated prior to
October 1, 2002, no such Prepayment Charge may be imposed for a term in excess
of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Charge may be imposed
for a term in excess of three (3) years following origination;
(yy) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan (pursuant to Appendix E of the Standard & Poor's Glossary),
as applicable, and no Mortgage Loan originated on or after October 1, 2002
through July 6, 2003 is governed by the Georgia Fair Lending Act. No Mortgage
Loan is covered by the Home Ownership and Equity Protection Act of 1994 and no
Mortgage Loan is in violation of any comparable state or local law;
(zz) Single-premium credit life insurance policy. In connection with
the origination of any Mortgage Loan, no proceeds from such Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by Fidelity National Tax
Service, and such contract is transferable;
(ccc) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(ddd) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of
Decision One, or is in the process of being recorded;
(eee) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(fff) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(ggg) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of Xxxxxx Xxx Guides;
(hhh) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Xxxxxxxxx did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the originator or any Affiliate of the originator;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor'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 (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(jjj) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the originator, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(kkk) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. 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, such Mortgage Loan;
(lll) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation;
(mmm) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(nnn) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction;
SCHEDULE IX
Representations and Warranties of Xxxxx Fargo
Xxxxx Fargo hereby makes the representations and warranties set
forth in this Schedule IX to the Depositor, the Servicers, the Trustee and the
Responsible Parties as of the Closing Date.
(a) Xxxxx Fargo is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is
duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by Xxxxx Fargo in any state
in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(b) Xxxxx Fargo has the full power and authority to execute, deliver
and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
action on the part of Xxxxx Fargo the execution, delivery and performance
of this Agreement; and this Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes a
legal, valid and binding obligation of Xxxxx Fargo, enforceable against
Xxxxx Fargo in accordance with its terms, except that (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (ii) 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.
(c) The execution and delivery of this Agreement by Xxxxx Fargo, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are
in the ordinary course of business of Xxxxx Fargo and will not (i) result
in a material breach of any term or provision of the articles of
incorporation or by laws of Xxxxx Fargo, (ii) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which Xxxxx Fargo is a party or by which it may be bound, or
(iii) constitute a material violation of any statute, order or regulation
applicable to Xxxxx Fargo of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Xxxxx Fargo; and
Xxxxx Fargo is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it which breach or violation
may materially impair Xxxxx Fargo's ability to perform or meet any of its
obligations under this Agreement.
(d) No litigation is pending or threatened against Xxxxx Fargo that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Xxxxx Fargo to perform
any of its obligations under this Agreement in accordance with the terms
thereof. For purposes of the foregoing, Xxxxx Fargo does not regard any
actions, proceedings or investigations "threatened" unless the potential
litigants or governmental authority has manifested to a member of the
Xxxxx Fargo & Company Law Department having responsibility for litigation
matters involving the corporate trust activities of Xxxxx Fargo its
present intention to initiate such proceedings.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Xxxxx Fargo of, or compliance by Xxxxx Fargo with, this
Agreement or the consummation of the transactions contemplated thereby, or
if any such consent, approval, authorization or order is required, Xxxxx
Fargo has obtained the same.
SCHEDULE X
Representations and Warranties of LaSalle
LaSalle hereby makes the representations and warranties set forth in
this Schedule IX to the Depositor, the Servicers, the Trustee and the
Responsible Parties as of the Closing Date.
(a) LaSalle is duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by such Custodian in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(b) LaSalle has the full power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary action on the part
of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution
and delivery thereof by the other parties thereto, constitutes a legal,
valid and binding obligation of such Custodian, enforceable against such
Custodian in accordance with its terms, except that (i) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership
and other similar laws relating to creditors' rights generally and (ii)
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.
(c) The execution and delivery of this Agreement by LaSalle, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are
in the ordinary course of business of such Custodian and will not (i)
result in a material breach of any term or provision of the articles of
incorporation or by laws of such Custodian, (ii) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which such Custodian is a party or by which it may be bound,
or (iii) constitute a material violation of any statute, order or
regulation applicable to such Custodian of any court, regulatory body,
administrative agency or governmental body having jurisdiction over such
Custodian; and such Custodian is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair such Custodian's
ability to perform or meet any of its obligations under this Agreement.
(d) No litigation is pending or threatened against LaSalle that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of such Custodian to
perform any of its obligations under this Agreement in accordance with the
terms thereof.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by XxXxxxx of, or compliance by such Custodian with, this
Agreement or the consummation of the transactions contemplated thereby, or
if any such consent, approval, authorization or order is required, such
Custodian has obtained the same.
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
Certificate No. : A-1ss-[ ]
A-1mz-[ ]
A-2a-[ ]
A-2b-[ ]
A-2c-[ ]
M-1-[ ]
M-2- [ ]
M-3-[ ]
M-4-[ ]
M-5-[ ]
M-6-[ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
Cut-off Date : July 1, 2005
First Distribution Date : August 25, 2005
Initial Certificate Balance
of this Certificate
("Denomination") : $[ ]
Initial Certificate Balances [A-1ss] [$283,769,000]
of all Certificates of this : [A-1mz] [$70,943,000]
Class [A-2a] [$280,000,000]
[to be updated] [A-2b] [$95,831,000]
[A-2c] [$69,000,000]
[M-1] [$37,976,000]
[M-2] [$34,384,000]
[M-3] [$20,527,000]
[M-4] [$18,475,000]
[M-5] [$16,935,000]
[M-6] [$16,935,000]
[B-1] [$15,396,000]
[B-2] [$13,343,000]
[B-3] [$11,290,000]
CUSIP : [A-1ss] [61744C SA 5]
[to be updated] [A-1mz] [61744C SB 3]
[A-2a] [61744C SC 1]
[A-2b] [61744C SD 9]
[A-2c] [61744C SE 7]
[M-1] [61744C SF 4]
[M-2] [61744C SG 2]
[M-3] [61744C SH 0]
[M-4] [61744C SJ 6]
[M-5] [61744C SK 3]
[M-6] [61744C SL 1]
[B-1] [61744C SM 9]
[B-2] [61744C SN 7]
[B-3] [61744C SP 2]
ISIN : [A-1ss] [US61744CSA52]
[to be updated] [A-1mz] [US61744CSB36]
[A-2a] [US61744CSC19]
[A-2b] [US61744CSD91]
[A-2c] [US61744CSE74]
[M-1] [US61744CSF40]
[M-2] [US61744CSG23]
[M-3] [US61744CSH06]
[M-4] [US61744CSJ61]
[M-5] [US61744CSK35]
[M-6] [US61744CSL18]
[B-1] [US61744CSM90]
[B-2] [US61744CSN73]
[B-3] [US61744CSP22]
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates, Series 2005-HE3
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Countrywide Home Loans Servicing LP, as
servicer, HomEq Servicing Corporation, as servicer, Decision One Mortgage
Company LLC, as a responsible party, NC Capital Corporation, as a responsible
party, Accredited Home Lenders, Inc., as a responsible party, WMC Mortgage
Corp., as a responsible party, Xxxxx Fargo Bank, National Association, as master
servicer, securities administrator and custodian, LaSalle Bank National
Association and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to
be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:____________________________________
Authenticated:
By _______________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, any Servicer individually, or all of the Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ___________, or, if mailed by check, to_________________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT
REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES AN OPINION OF
COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR
A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A
PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO
EFFECT.
Certificate No. : P-1
Cut-off Date : July 1, 2005
First Distribution Date : August 25, 2005
Percentage Interest of
this Certificate
("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates, Series 2005-HE3
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Countrywide Home Loans Servicing LP, as
servicer, HomEq Servicing Corporation, as servicer, Decision One Mortgage
Company LLC, as a responsible party, NC Capital Corporation, as a responsible
party, Accredited Home Lenders, Inc., as a responsible party, WMC Mortgage
Corp., as a responsible party, Xxxxx Fargo Bank, National Association, as master
servicer, securities administrator and custodian, LaSalle Bank National
Association and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Securities Administrator for such purposes, or such
other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Pooling and Servicing Agreement) and deliver either (i) a Rule 144A Letter, in
either case substantially in the form attached to the Agreement, or (ii) a
written Opinion of Counsel to the Securities Administrator that such transfer
may be made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act,
which Opinion of Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA, Section 4975 of
the Code or any materially similar provisions of applicable federal, state or
local law ("Similar Law"), or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:______________________________________
Authenticated:
By __________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, any Servicer individually, or all of the Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ___________, or, if mailed by check, to_________________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT C
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN TWO "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF
OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS
VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : July 1, 2005
First Distribution Date : August 25, 2005
Percentage Interest of : 100%
this Certificate
("Denomination")
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates, Series 2005-HE3
Class R
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor"), Countrywide Home Loans Servicing
LP, as servicer, HomEq Servicing Corporation, as servicer, Decision One Mortgage
Company LLC, as a responsible party, NC Capital Corporation, as a responsible
party, Accredited Home Lenders, Inc., as a responsible party, WMC Mortgage
Corp., as a responsible party, Xxxxx Fargo Bank, National Association, as master
servicer, securities administrator and custodian, LaSalle Bank National
Association and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Servicers, the
Securities Administrator, the Depositor or the Trust Fund. In the event that
such representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By_______________________________________
Authenticated:
By __________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, any Servicer individually, or all of the Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ___________, or, if mailed by check, to_________________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO
THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES
AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN
INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
COVERED UNDER SECTIONS I AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60
OR AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR, TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING OF ERISA,
SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE,
THE DEPOSITOR, THE SECURITIES ADMINISTRATOR OR THE SERVICERS TO ANY OBLIGATION
IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : July 1, 2005
First Distribution Date : August 25, 2005
Percentage Interest of this
Certificate ("Denomination") : [___]%
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates, Series 2005-HE3
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx ABS Capital
I Inc., as depositor (the "Depositor"), Countrywide Home Loans Servicing LP, as
servicer, HomEq Servicing Corporation, as servicer, Decision One Mortgage
Company LLC, as a responsible party, NC Capital Corporation, as a responsible
party, Accredited Home Lenders, Inc., as a responsible party, WMC Mortgage
Corp., as a responsible party, Xxxxx Fargo Bank, National Association, as master
servicer, securities administrator and custodian, LaSalle Bank National
Association and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Securities Administrator shall require the transferor to
execute a transferor certificate (in substantially the form attached to the
Pooling and Servicing Agreement) and deliver either (i) a Rule 144A Letter, in
either case substantially in the form attached to the Agreement, or (ii) a
written Opinion of Counsel to the Securities Administrator that such transfer
may be made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act,
which Opinion of Counsel shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received either (i) a representation letter
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA or Section 4975
of the Code or any materially similar provisions of applicable Federal, state or
local law ("Similar Law") or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator, or (ii) if the transferee is an insurance company,
a representation letter that it is purchasing such Certificates with the assets
of its general account and that the purchase and holding of such Certificates
are covered under Sections I and III of PTCE 95-60, or (iii) in the case of a
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or a plan or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments) or a plan subject to
Similar Law, or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Securities Administrator, which Opinion
of Counsel shall not be an expense of the Trustee, the Servicers, the Securities
Administrator or the Trust Fund, addressed to the Securities Administrator, to
the effect that the purchase or holding of such Certificate will not constitute
or result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or any Similar Law and will not subject the Depositor,
the Trustee, the Securities Administrator or the Servicers to any obligation in
addition to those expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as
Securities Administrator
By_______________________________________
Authenticated:
By __________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
XXXXXX XXXXXXX ABS CAPITAL I INC.
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to this Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Trustee, the Securities
Administrator nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, any Servicer individually, or all of the Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_______________________________________________________________________________.
____________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ___________, or, if mailed by check, to_________________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF [CUSTODIAN] [TRUSTEE]
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Countrywide Home Loans Servicing LP
0000 Xxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Decision One Mortgage Company LLC
0000 X.X. Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Accredited Home Lenders, Inc.
00000 Xxxxxx xx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
WMC Mortgage Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
LaSalle Bank National Association
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank
00 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of July 1, 2005, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, WMC Mortgage Corp.,
as a Responsible Party, Countrywide Home Loans Servicing LP, as a
Servicer, HomEq Servicing Corporation, as a Servicer, Decision One
Mortgage Company LLC, as a Responsible Party, NC Capital
Corporation, as a Responsible Party, Accredited Home Lenders, Inc.,
as a Responsible Party, LaSalle Bank National Association, as a
Custodian, Xxxxx Fargo Bank, National Association, as Master
Servicer, Securities Administrator and a Custodian, and Deutsche
Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS Capital
I Inc. Trust, Series 2005-HE3
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse";
and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The [Custodian] [Trustee] has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The [Custodian] [Trustee] makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the [Custodian]
[Trustee] has made no determination and makes no representations as to whether
(i) any endorsement is sufficient to transfer all right, title and interest of
the party so endorsing, as Noteholder or assignee thereof, in and to that
Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
[____________________],
as [____________]
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION
REPORT OF [CUSTODIAN] [TRUSTEE]
[date]
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Countrywide Home Loans Servicing LP
0000 Xxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of July 1, 2005, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, WMC Mortgage Corp.,
as a Responsible Party, Countrywide Home Loans Servicing LP, as a
Servicer, HomEq Servicing Corporation, as a Servicer, Decision One
Mortgage Company LLC, as a Responsible Party, NC Capital
Corporation, as a Responsible Party, Accredited Home Lenders, Inc.,
as a Responsible Party, LaSalle Bank National Association, as a
Custodian, Xxxxx Fargo Bank, National Association, as Master
Servicer, Securities Administrator and a Custodian, and Deutsche
Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS Capital
I Inc. Trust, Series 2005-HE3
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
[Custodian] [Trustee], hereby certifies that as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided
in Section 2.01 of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of endorsement
from the Originator to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or,
if the Depositor has certified or the [Custodian] [Trustee]
otherwise knows that the related Mortgage has not been returned from
the applicable recording office, a copy of the assignment of the
Mortgage (excluding information to be provided by the recording
office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment
from the Originator to the last endorsee.
(v) The original or duplicate original lender's title policy
and all riders thereto or, any one of an original title binder, an
original preliminary title report or an original title commitment,
or a copy thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1) solely with
respect to the Mortgage Loan number, (2), (7), and (9) of the Mortgage Loan
Schedule and items (1), (9) and (17) of the Data Tape Information accurately
reflects information set forth in the Custodial File.
The [Custodian] [Trustee] has made no independent examination of any
documents contained in each Mortgage File beyond the review of the Custodial
File specifically required in the Pooling and Servicing Agreement. The
[Custodian] [Trustee] makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in each Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan. Notwithstanding anything herein to the
contrary, the [Custodian] [Trustee] has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as Noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which the assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
[______________________],
as [______________]
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3,
Mortgage Pass-Through Certificates,
Series 2005-HE3
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
(1) The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among Xxxxxx
Xxxxxxx ABS Capital I Inc., as Depositor, WMC Mortgage Corp., as a Responsible
Party, Countrywide Home Loans Servicing LP, as a Servicer, HomEq Servicing
Corporation, as a Servicer, Decision One Mortgage Company LLC, as a Responsible
Party, NC Capital Corporation, as a Responsible Party, Accredited Home Lenders,
Inc., as a Responsible Party, LaSalle Bank National Association, as a Custodian,
Xxxxx Fargo Bank, National Association, as Master Servicer, Securities
Administrator and a Custodian, and Deutsche Bank National Trust Company, as
Trustee (the "Trustee"). Capitalized terms used, but not defined herein shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee
for the benefit of the Depositor and the Trustee.
(2) The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
(3) The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
(4) The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
(5) The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
(6) The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that, among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted Transferee.
(7) The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
(8) The Transferee's taxpayer identification number is __________.
(9) The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
(10) The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
(11) The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other U.S. Person.
(12) Check the applicable paragraph:
[ ] The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable, does
not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Certificate will only be taxed in the
United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
None of the above.
(13) The Transferee is not an employee benefit plan that is subject to Title I
of ERISA or a plan that is subject to Section 4975 of the Code or a plan subject
to any Federal, state or local law that is substantially similar to Title I of
ERISA or Section 4975 of the Code, and the Transferee is not acting on behalf of
or investing plan assets of such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this day of , 20__.
_________________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ___ day of ______, 20__.
_________________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Xxxxx Fargo Bank
00 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2005-HE3, Mortgage
Pass-Through Certificates, Series 2005-HE3, Class
------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee, (ii) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
_________________________________________
Print Name of Transferor
By:______________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Xxxxx Fargo Bank
00 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Re: Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2005-HE3, Mortgage
Pass-Through Certificates, Series 2005-HE3, Class
------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class A-1ss, Class
A-1mz, Class A-2a, Class A-2b, Class A-2c, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 or Class B-3 Certificate
or we are not an employee benefit plan that is subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a plan
or arrangement that is subject to Section 4975 of the Internal Revenue Code of
1986, as amended, nor are we acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such acquisition
or, with respect to a Class X Certificate, the purchaser is an insurance company
that is purchasing this certificate with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
and (f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $_____________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation
(other than a bank, savings and loan association
or similar institution), Massachusetts or similar
business trust, partnership, or charitable
organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the
business of which is substantially confined to
banking and is supervised by the State or
territorial banking commission or similar official
or is a foreign bank or equivalent institution,
and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached
hereto.
____ Savings and Loan. The Buyer (a) is a savings and
loan association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
any such institutions or is a foreign savings and
loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ Broker dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange
Act of 1934.
____ Insurance Company. The Buyer is an insurance
company whose primary and predominant business
activity is the writing of insurance or the
reinsuring of risks underwritten by insurance
companies and which is subject to supervision by
the insurance commissioner or a similar official
or agency of a State, territory or the District of
Columbia.
____ State or Local Plan. The Buyer is a plan
established and maintained by a State, its
political subdivisions, or any agency or
instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors
Act of 1940.
____ Small Business Investment Company. Buyer is a
small business investment company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act
of 1958.
____ Business Development Company. Buyer is a business
development company as defined in Section
202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_________________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
Date:__________________________________
-------------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
____ The Buyer owned $________ in securities
(other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of
Investment Companies which owned in the aggregate
$____ in securities (other than the excluded
securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_________________________________________
Print Name of Transferee
By:______________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Buyer
Date:____________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for [Custodian] [Trustee])
To: [Trustee]
Re: In connection with the administration of the Mortgage Loans held by
you as the [Custodian] [Trustee] on behalf of the
Certificateholders, we request the release, and acknowledge receipt,
of the (Custodial File/[specify documents]) for the Mortgage Loan
described below, for the reason indicated.
--------------------------------------------------------------------
Mortgagor's Name, Address & Zip Code:
------------------------------------
Mortgage Loan Number:
--------------------
Send Custodial File to:
----------------------
Delivery Method (check one)
---------------------------
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Servicer hereby certifies
that all amounts received in connection therewith have
been credited to its Collection Account as provided in the
Pooling and Servicing Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of
the Pooling and Servicing Agreement. (The Servicer hereby
certifies that the repurchase price has been credited to
Collection Account as provided in the Pooling and
Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The
Servicer hereby certifies that all proceeds of
foreclosure, insurance, condemnation or other liquidation
have been finally received and credited to its Collection
Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).____________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the Custodial File was
previously released to us, please release to us our previous request and receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above documents to
you as the [Custodian] [Trustee], please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
[SERVICER]
By:____________________________________
Name:
Title:
Date:
[ACKNOWLEDGED AND AGREED:
[___________________________],
as [__________]
By:_______________________________________
Name:
Title:
Date: ]
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by applicable Servicer or delivered to and
retained by the Trustee or Custodian, as applicable:
(i) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _____________, without
recourse" and signed in the name of the last endorsee by an
authorized officer. To the extent that there is no room on the face
of a Mortgage Note for endorsements, the endorsement may be
contained on an allonge, unless the Trustee is advised by the
applicable Responsible Party (pursuant to the applicable Purchase
Agreement) that state law does not so allow.
(ii) The original of any guaranty executed in connection with
the Mortgage Note.
(iii) (A) With respect to the Mortgage Loans other than the
Xxxxx Fargo and LaSalle Mortgage Loans, the original Mortgage with
evidence of recording thereon or a certified true copy of such
Mortgage submitted for recording. If, in connection with any
Mortgage Loan, the original Mortgage cannot be delivered with
evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the
original recorded Mortgage, the Trustee or applicable Custodian
shall notify the applicable Responsible Party to deliver or cause to
be delivered to the Trustee or applicable Custodian as required
under the applicable Purchase Agreement, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the
public recording office, an officer's certificate of the applicable
Responsible Party (delivered pursuant to the applicable Purchase
Agreement), or evidence of certification on the face of such
photocopy of such mortgage, or a certificate from an escrow company,
a title company or closing attorney stating that such Mortgage has
been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of
such Mortgage certified by such public recording office to be a true
and complete copy of the original recorded Mortgage will be promptly
delivered to the Trustee or applicable Custodian upon receipt
thereof by the applicable Responsible Party; or (ii) in the case of
a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete
copy of the original recorded Mortgage;
(B) With respect to the Xxxxx Fargo and LaSalle Mortgage
Loans, the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If, in
connection with any Xxxxx Fargo and LaSalle Mortgage Loan, the
original Mortgage cannot be delivered with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by
the public recording office where such Mortgage has been delivered
for recordation or because such Mortgage has been lost or because
such public recording office retains the original recorded Mortgage,
the applicable Responsible Party shall deliver or cause to be
delivered to the Custodian a photocopy of such Mortgage certified by
the applicable Responsible Party to be a true and complete copy of
such Mortgage and shall forward to the applicable Custodian such
original recorded Mortgage within 14 days following the applicable
Responsible Party's receipt of such Mortgage from the applicable
public recording office; or in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the
case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original
recorded Mortgage.
(iv) The originals of all assumption, modification,
consolidation or extension agreements, with evidence of recording
thereon.
(v) Except with respect to each MERS Designated Mortgage Loan,
the original Assignment of Mortgage for each Mortgage Loan endorsed
in blank.
(vi) (A) With respect to the Mortgage Loans other than the
Xxxxx Fargo and LaSalle Mortgage Loans, the originals of all
intervening assignments of Mortgage (if any) evidencing a complete
chain of assignment from the applicable originator (or MERS with
respect to each MERS Designated Mortgage Loan) to the last endorsee
with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains
the original recorded assignments of Mortgage, the Trustee or
applicable Custodian shall notify the applicable Responsible Party,
to deliver, as required under the applicable Purchase Agreement, a
photocopy of such intervening assignment, together with (A) in the
case of a delay caused by the public recording office, an officer's
certificate of the applicable Responsible Party, or evidence of
certification on the face of such photocopy of such intervening
assignment, or a certificate from an escrow company, a title company
or a closing attorney stating that such intervening assignment of
Mortgage has been dispatched to the appropriate public recording
office for recordation and that such original recorded intervening
assignment of Mortgage or a copy of such intervening assignment of
Mortgage certified by the appropriate public recording office to be
a true and complete copy of the original recorded intervening
assignment of Mortgage will be promptly delivered to the Trustee or
applicable Custodian upon receipt thereof by the applicable
Responsible Party; or (B) in the case of an intervening assignment
where a public recording office retains the original recorded
intervening assignment or in the case where an intervening
assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original
recorded intervening assignment;
(B) With respect to the Xxxxx Fargo and LaSalle Mortgage
Loans, the originals of all intervening assignments of Mortgage (if any)
evidencing a complete chain of assignment from the applicable originator
to the last endorsee with evidence of recording thereon or a certified
true copy of such intervening assignments of Mortgage submitted for
recording, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of Mortgage,
the applicable Responsible Party shall deliver or cause to be delivered a
photocopy of such intervening assignment, certified by the applicable
Responsible Party to be a true and complete copy of such intervening
assignment and shall forward to the applicable Custodian such original
recorded intervening assignment within 14 days following the applicable
Responsible Party's receipt of such from the applicable public recording
office; or in the case of an intervening assignment where a public
recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified
by such public recording office to be a true and complete copy of the
original recorded intervening assignment.
(vii) The original mortgagee title insurance policy or
attorney's opinion of title and abstract of title, or, in the event
such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be
true and complete by the title insurance company.
(viii) The original of any security agreement, chattel
mortgage or equivalent document executed in connection with the
Mortgage (if provided).
(ix) Residential loan application.
(x) Mortgage Loan closing statement.
(xi) Verification of employment and income, if applicable.
(xii) Verification of acceptable evidence of source and amount
of downpayment.
(xiii) Credit report on Mortgagor.
(xiv) Residential appraisal report.
(xv) Photograph of the Mortgaged Property.
(xvi) Survey of the Mortgaged Property.
(xvii) Copy of each instrument necessary to complete
identification of any exception set forth in the exception schedule
in the title policy, i.e., map or plat, restrictions, easements,
sewer agreements, home association declarations, etc.
(xviii) All required disclosure statements.
(xix) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(xx) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2005-HE3 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2005-HE3, issued pursuant to the
Pooling and Servicing Agreement, dated as of July 1, 2005, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, WMC Mortgage Corp.,
as a Responsible Party, Countrywide Home Loans Servicing LP, as a
Servicer, HomEq Servicing Corporation, as a Servicer, Decision One
Mortgage Company LLC, as a Responsible Party, NC Capital
Corporation, as a Responsible Party, Accredited Home Lenders, Inc.,
as a Responsible Party, LaSalle Bank National Association, as a
Custodian, Xxxxx Fargo Bank, National Association, as Master
Servicer, Securities Administrator and a Custodian, and Deutsche
Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS Capital
I Inc. Trust, Series 2005-HE3
--------------------------------------------------------------------
I, [identify the certifying individual], certify that:
(1) I have reviewed this annual report on Form 10-K (the "Annual
Report"), and all reports on Form 8-K containing distribution reports
(collectively with this Annual Report, the "Reports") filed in respect of
periods included in the year covered by this Annual Report, of the Trust;
(2) Based on my knowledge, the information in the Reports, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this Annual Report;
(3) Based on my knowledge, the distribution or servicing information
required to be provided to the Securities Administrator by each Servicer under
the Pooling and Servicing Agreement, for inclusion in the Reports is included in
the Reports;
(4) Based on my knowledge and upon the annual compliance statement
included in this Annual Report and required to be delivered to the Securities
Administrator in accordance with the terms of the Pooling and Servicing
Agreement, and except as disclosed in the Reports, the Servicer has fulfilled
its obligations under the Pooling and Servicing Agreement; and
(5) The Reports disclose all significant deficiencies relating to
the Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar procedure, as set forth in the Pooling and Servicing Agreement, that
is included in the Reports.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Securities
Administrator and the Servicers.
Date: ________________________________
________________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF CERTIFICATION TO BE
PROVIDED BY THE SECURITIES ADMINISTRATOR TO DEPOSITOR
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2005-HE3 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2005-HE3, issued pursuant to the
Pooling and Servicing Agreement, dated as of July 1, 2005, among
Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, WMC Mortgage Corp.,
as a Responsible Party, Countrywide Home Loans Servicing LP, as a
Servicer, HomEq Servicing Corporation, as a Servicer, Decision One
Mortgage Company LLC, as a Responsible Party, NC Capital
Corporation, as a Responsible Party, Accredited Home Lenders, Inc.,
as a Responsible Party, LaSalle Bank National Association, as a
Custodian, Xxxxx Fargo Bank, National Association, as Master
Servicer, Securities Administrator and a Custodian, and Deutsche
Bank National Trust Company, as Trustee, Xxxxxx Xxxxxxx ABS Capital
I Inc. Trust, Series 2005-HE3
--------------------------------------------------------------------
I, [identify the certifying individual], certify to the Depositor, and its
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the year covered by
the Annual Report (collectively with the Annual Report, the "Reports"), of the
Trust;
(2) To my knowledge, the information in the Reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by the Annual Report; and
(3) To my knowledge, the distribution or servicing information
required to be provided to the Securities Administrator by each Servicer under
the Pooling and Servicing Agreement for inclusion in the Reports is included in
the Reports.
Date: _________________________________
_______________________________________
[Signature]
[Title]
EXHIBIT N
FORM OF CERTIFICATION TO BE PROVIDED
BY EACH SERVICER TO DEPOSITOR
Re: Xxxxxx Xxxxxxx Capital I Inc. Trust 2005-HE3 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2005-HE3, issued pursuant to the Pooling
and Servicing Agreement, dated as of July 1, 2005, among Xxxxxx Xxxxxxx
ABS Capital I Inc., as Depositor, WMC Mortgage Corp., as a Responsible
Party, Countrywide Home Loans Servicing LP, as a Servicer, HomEq Servicing
Corporation, as a Servicer, Decision One Mortgage Company LLC, as a
Responsible Party, NC Capital Corporation, as a Responsible Party,
Accredited Home Lenders, Inc., as a Responsible Party, LaSalle Bank
National Association, as a Custodian, Xxxxx Fargo Bank, National
Association, as Master Servicer, Securities Administrator and a Custodian,
and Deutsche Bank National Trust Company, as Trustee,
Xxxxxx Xxxxxxx ABS Capital I Inc. Trust, Series 2005-HE3
--------------------------------------------------------
[Countrywide] [HomEq] certifies to the Depositor, the Securities Administrator
and the Trustee, and their respective officers, directors and affiliates, and
with the knowledge and intent that they will rely upon this certification, that:
(1) Based on our knowledge, the information prepared by
[Countrywide] [HomEq] and relating to the mortgage loans serviced by
[Countrywide] [HomEq] pursuant to the Pooling and Servicing Agreement and
provided by [Countrywide] [HomEq] to the Securities Administrator in its reports
to the Securities Administrator is accurate and complete in all material
respects as of the last day of the period covered by such report;
(2) Based on our knowledge, the servicing information required to be
provided to the Securities Administrator by [Countrywide] [HomEq] pursuant to
the Pooling and Servicing Agreement has been provided to the Securities
Administrator;
(3) Based upon the review required under the Pooling and Servicing
Agreement, and except as disclosed in its annual compliance statement required
to be delivered pursuant to the Pooling and Servicing Agreement, [Countrywide]
[HomEq] as of the last day of the period covered by such annual compliance
statement has fulfilled its obligations under the Pooling and Servicing
Agreement; and
(4) [Countrywide] [HomEq] has disclosed to its independent auditor,
who issues the independent auditor's report on the Uniform Single Attestation
Program for Mortgage Bankers for [Countrywide] [HomEq], any significant
deficiencies relating to [Countrywide's] [HomEq's] compliance with minimum
servicing standards.
[COUNTRYWIDE HOME LOANS SERVICING LP]
[HOMEQ SERVICING CORPORATION]
Date: _________________________________
[Signature]
[Title]
EXHIBIT O
DECISION ONE PURCHASE AGREEMENT
EXECUTION COPY
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
--------------------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
DECISION ONE MORTGAGE COMPANY, LLC,
Seller
--------------------------------------------------------------
Dated as of October 1, 2004
Conventional,
Fixed and Adjustable Rate, Subprime Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH. ........................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of October 1, 2004, by and between Xxxxxx Xxxxxxx
Mortgage Capital Inc., a New York corporation, having an office at 0000 Xxxxxx
xx xxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and
Decision One Mortgage Company, LLC, a North Carolina limited liability company,
having an office at 6060 J.A. Xxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain conventional adjustable-rate and fixed-rate subprime,
residential first mortgage loans (the "Mortgage Loans") on a servicing released
basis as described herein, and which shall be delivered in pools of whole loans
(each a "Mortgage Loan Package") on the various dates as provided herein (each,
a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule for the
related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below. Other capitalized terms used in
this Agreement and not defined herein shall have the respective meanings set
forth in the Interim Servicing Agreement.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Xxx Transfer or a Freddie Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser and without recourse except as
otherwise set forth herein.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Code: Internal Revenue Code of 1986, as amended
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The Custodial Agreement, dated as of August 1,
2002, among the Seller, the Purchaser and the Custodian, which governs the
retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents.
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and or its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Seller, acting as interim servicer, a
copy of which is attached to the Interim Servicing Agreement as Exhibit 6.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004) "high risk home," or "predatory" loan under any other
applicable federal, state or local law (or a similarly 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 and/or fees) or (c) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary. For avoidance of doubt, the parties agree that
this definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Seller, as interim servicer, providing for the Seller to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note; except that with respect to
real property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity based on original
amortization schedule; (8) the Loan-to-Value Ratio at origination; (9) the
Mortgage Interest Rate as of the related Cut-off Date; (10) the date on which
the Monthly Payment was due on the Mortgage Loan and, if such date is not
consistent with the Due Date currently in effect, such Due Date; (11) the stated
maturity date; (12) the first payment date; (13) the amount of the Monthly
Payment as of the related Cut-off Date; (14) the last payment date on which a
payment was actually applied to the outstanding principal balance; (15) the
original principal amount of the Mortgage Loan; (16) the principal balance of
the Mortgage Loan as of the close of business on the related Cut-off Date, after
deduction of payments of principal due and collected on or before the related
Cut-off Date; (17) delinquency status as of the related Cut-off Date; (18) with
respect to each Adjustable Rate Mortgage Loan, the Interest Rate Adjustment
Date; (19) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(20) with respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap
under the terms of the Mortgage Note; (21) with respect to each Adjustable Rate
Mortgage Loan, a code indicating the type of Index; (22) the type of Mortgage
Loan (i.e., Fixed or Adjustable Rate Mortgage Loan); (23) a code indicating the
purpose of the loan (i.e., purchase, rate and term refinance, equity take-out
refinance); (24) a code indicating the documentation style (i.e., full,
alternative or reduced); (25) the loan credit classification (as described in
the Underwriting Guidelines); (26) whether such Mortgage Loan provides for a
Prepayment Penalty and, if applicable, the Prepayment Penalty period; (27) the
Mortgage Interest Rate as of origination; (28) the credit risk score (FICO
score); (29) the date of origination; (30) with respect to Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate adjustment period; (31) with respect
to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate adjustment
percentage; (32) with respect to each Adjustable Rate Mortgage Loan, the
Mortgage Interest Rate floor; (33) with respect to each Adjustable Rate Mortgage
Loan, the Mortgage Interest Rate Cap as of the first Interest Rate Adjustment
Date; (34) with respect to each Adjustable Rate Mortgage Loan, the Periodic Rate
Cap subsequent to the first Interest Rate Adjustment Date; (35) a code
indicating whether the Mortgage Loan is a Home Loan; (36) a code indicating
whether the Mortgage Loan is a Balloon Mortgage Loan; (37) the Due Date for the
first Monthly Payment; (38) the original Monthly Payment due; (39) Appraised
Value; (40) with respect to the related Mortgagor, the debt-to-income ratio; and
(41) the MERS Identification Number, if applicable. With respect to the Mortgage
Loans in the aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; (4) the
weighted average maturity of the Mortgage Loans; (5) the applicable Cut-off
Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a Residential
Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price Percentage: As defined in the related Purchase Price
and Terms Agreement.
Purchase Price and Terms Agreement: Those certain letter agreements
setting forth the general terms and conditions of the transactions consummated
herein and identifying the Mortgage Loans to be purchased from time to time
hereunder, by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, accepted by the Seller, who had
no interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and such appraiser and the appraisal made by
such appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan (iv) be of the same type as the deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family dwelling
in a planned unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Decision One Mortgage Company, LLC, its successors in
interest and assigns.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Seller under the Interim Servicing Agreement. The obligation of the Purchaser to
pay the Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of such Monthly
Payment collected by the Seller, or as otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans, and the Seller shall cease all servicing
responsibilities. Such date shall occur on the day indicated by the Purchaser to
the Seller in accordance with the Interim Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance Agreement, attached hereto as Exhibit G.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the related
Purchase Price Percentage (subject to adjustment as provided therein),
multiplied by the aggregate principal balance, as of the related Cut-off Date,
of the Mortgage Loans, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans, net of the
Servicing Fee Rate. The Purchase Price plus accrued interest as set forth in the
preceding paragraph shall be paid to the Seller by wire transfer of immediately
available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such related Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such related Cut-off date, but to be applied on a Due Date beyond the related
Cut-off Date shall not be applied to the principal balance as of the related
Cut-off Date. Such prepaid amounts shall be the property of the Purchaser. The
Seller shall deposit any such prepaid amounts into the Custodial Account, which
account is established for the benefit of the Purchaser for subsequent
remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser; provided, however, that
the Purchaser and the Seller shall agree in writing on the final pool of
Mortgage Loans to be purchased on a Closing Date pursuant to this Agreement The
Purchaser may, at its option and without notice to the Seller, purchase some or
all of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the Purchaser's (or any of its successor's) rights to demand
repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by it
pursuant to this Agreement to be appropriately identified in its computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. In addition, the Seller shall maintain
in its possession, available for inspection by the Purchaser, and shall deliver
to the Purchaser upon demand, evidence of compliance with all federal, state,
and local laws, rules and regulations in connection with the origination and
servicing of the Mortgage Loans to the extent required by law to be maintained.
The Seller shall release from its custody the contents of any Servicing File
retained by it only in accordance with this Agreement or the Interim Servicing
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Interim Servicer after
the related Cut-off Date on or in connection with a Mortgage Loan shall be
vested in the Purchaser or one or more designees of the Purchaser; provided,
however, that all funds received on or in connection with a Mortgage Loan shall
be received and held by the Seller in trust for the benefit of the Purchaser or
the appropriate designee of the Purchaser, as the case may be, as the owner of
the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
ten (10) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan, as set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the Mortgage Loans, the Seller shall
reissue and deliver to the Purchaser or its designee said officer's certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
statistically verifies, on a regular basis, the existence and accuracy of the
legal documents, credit documents, property appraisals, and underwriting
decisions. The program shall include evaluating and monitoring the overall
quality of the Seller's loan production and the servicing activities of the
Seller. The program is to ensure that the Mortgage Loans are originated in
accordance with the Underwriting Guidelines, guard against dishonest,
fraudulent, or negligent acts, and guard against errors and omissions by
officers, employees, or other authorized persons.
Subsection 6.05 MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the Purchaser as the
Investor and the Custodian as custodian, and no Person shall be listed as
Interim Funder on the MERS System. In addition, on or prior to the related
Closing Date, Seller shall provide the Custodian and the Purchaser with a MERS
Report listing the Purchaser as the Investor, the Custodian as custodian and no
Person as Interim Funder with respect to each MERS Designated Mortgage Loan.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to and upon the terms and conditions of this
Agreement and the Interim Servicing Agreement (with respect to each Mortgage
Loan, for an interim period, as specified therein), the Seller hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the Servicing Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified therein). The
Purchaser and Seller shall execute the Interim Servicing Agreement on the
initial Closing Date.
Pursuant to the Interim Servicing Agreement, the Seller shall begin
servicing the Mortgage Loans on behalf of the Purchaser and shall be entitled to
a Servicing Fee with respect to such Mortgage Loans from the related Closing
Date until the termination of the Interim Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to the Mortgage Loans. The Transfer
Date shall be the date determined in accordance with Section 6.03 of the Interim
Servicing Agreement (with respect to each Mortgage Loan, for an interim period,
as specified therein).
On or prior to the related Transfer Date, or as otherwise specified
below the Seller shall, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser with copies of
all such related notices within five (5) Business Days following the related
Transfer Date.
(b) [Reserved]
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Seller's possession relating to each related Mortgage Loan including the
information enumerated in the Interim Servicing Agreement (with respect to each
such Mortgage Loan, for an interim period, as specified therein).
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Seller.
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the related Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
related Transfer Date all payments received by the Seller on each related
Mortgage Loan shall be properly applied by the Seller to the account of the
particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the related Transfer
Date shall be forwarded to the Purchaser by overnight mail within one (1)
Business Day following the date of receipt. The Seller shall notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Seller forwards with its payment sufficient
information to permit appropriate processing of the payment by the Purchaser.
The Seller shall assume full responsibility for the necessary and appropriate
legal application of such Monthly Payments received by the Seller after the
related Transfer Date with respect to related Mortgage Loans then in foreclosure
or bankruptcy; provided, for purposes of this Agreement, necessary and
appropriate legal application of such Monthly Payments shall include, but not be
limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller shall
comply with the foregoing requirements with respect to all Monthly Payments
received by it after the related Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the related Transfer Date and discovered after
the related Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
related Transfer Date cannot be identified and said misapplied
payment has resulted in a shortage in a Custodial Account or Escrow
Account, the Seller shall be liable for the amount of such shortage.
The Seller shall reimburse the Purchaser for the amount of such
shortage within thirty (30) days after receipt of written demand
therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
related Transfer Date has created an improper Purchase Price as the
result of an inaccurate outstanding principal balance, a check shall
be issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the related Transfer Date, the books,
records and accounts of the Seller with respect to the related Mortgage Loans
shall be in accordance with all applicable Purchaser requirements as set forth
in this agreement.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed in accordance with applicable law
in relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of North Carolina and has all licenses necessary to carry
on its business as now being conducted and is licensed, qualified and in good
standing in the states where the related Mortgaged Property is located, if the
laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Seller. The Seller has corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement and all agreements contemplated
hereby have been duly executed and delivered and constitute the valid, legal,
binding and enforceable obligations of the Seller, except as enforceability may
be limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether enforcement is sought
in a proceeding in equity or at law. All requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the related Closing Date;
(h) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(i) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(j) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(k) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(l) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws, including with respect to the legitimacy of
the applicable Mortgagor and the origin of the assets used by the said Xxxxxxxxx
to purchase the property in question, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer of the Mortgage Loans will be treated as a
sale on the books and records of the Seller and the Seller has determined that
the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(r) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards, if any, as are usually and customarily insured against
by prudent mortgage lenders in the community in which the related Mortgaged
Property is located. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to the requirements usually and customarily
insured against by prudent mortgage lenders in the community in which the
related Mortgaged Property is located, as well as all additional requirements
set forth in Section 2.10 of the Interim Servicing Agreement. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Xxxxxxxxx's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule and consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual residential condominium unit in a condominium project, or an
individual unit in a planned unit development and that no residence or dwelling
is a mobile home, provided, however, that any condominium unit or planned unit
development shall not fall within any of the "Ineligible Projects" of part VIII,
Section 102 of the Xxxxxx Xxx Selling Guide and shall conform with the
Underwriting Guidelines. In the case of any Mortgaged Properties that are
manufactured homes (a "Manufactured Home Mortgage Loans"), (i) the related
manufactured dwelling is permanently affixed to the land, (ii) the related
manufactured dwelling and the related land are subject to a Mortgage properly
filed in the appropriate public recording office and naming Seller as mortgagee,
(iii) the applicable laws of the jurisdiction in which the related Mortgaged
Property is located will deem the manufactured dwelling located on such
Mortgaged Property to be a part of the real property on which such dwelling is
located, and (iv) such Manufactured Home Mortgage Loan is (x) a qualified
mortgage under Section 860G(a)(3) of the Internal Revenue Code of 1986, as
amended and (y) secured by manufactured housing treated as a single family
residence under Section 25(e)(10) of the Code. As of the date of origination, no
portion of the Mortgaged Property was used for commercial purposes, and since
the date of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial purposes as long as
the Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(1) the lien of current real property taxes and assessments
not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and the Seller has full right to sell
and assign the same to the Purchaser.;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any Person, including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application for
any insurance in relation to such Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (A), (B) and (C) of paragraph (j) of
this Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against
any loss by reason of the invalidity or unenforceability of the lien resulting
from the provisions of the Mortgage providing for adjustment to the Mortgage
Interest Rate and Monthly Payment. Where required by state law or regulation,
the Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. The Seller, its successor
and assigns, are the sole insureds of such lender's title insurance policy, and
such lender's title insurance policy is valid and remains in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
required to be stated therein or necessary to make the information and
statements therein not misleading. No Mortgage Loan contains terms or provisions
which would result in negative amortization. Principal payments on the Mortgage
Loan commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate as well as, in the case of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap are as
set forth on the related Mortgage Loan Schedule. The Mortgage Note is payable in
equal monthly installments of principal and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Loan is
payable on the first day of each month. The Mortgage Loan does not require a
balloon payment on its stated maturity date, unless otherwise specified in the
related Mortgage Loan Schedule;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Xxxxxx
Xxx and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. 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 but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements, if any, stated in
the Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable under the Underwriting Guidelines. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller
executed and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest
Rate and the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the related Closing Date that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable hazard
insurance policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgaged
Property; and nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, accepted by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property (except as may be expressly
shown in the related appraisal) or Mortgage Loan or to cause the Mortgage Loans
to prepay during any period materially faster or slower than similar mortgage
loans held by the Seller generally secured by properties in the same geographic
area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) [Reserved];
(tt) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(uu) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(vv) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or good faith legitimate prospective purchaser of
such Mortgage. The Seller shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's good faith
legitimate secondary marketing operations and the purchase and sale of mortgages
or Servicing Rights thereto;
(ww) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(xx) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(yy) Predatory Lending Regulations. 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. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(zz) Single-premium credit life insurance policy. In connection with
the origination of any Mortgage Loan, no proceeds from such Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by Fidelity National Tax
Service, and such contract is transferable;
(ccc) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(ddd) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(eee) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(fff) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(ggg) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of Xxxxxx Xxx Guides;
(hhh) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a higher
cost product designed for less creditworthy mortgagors, unless at the time of
the Mortgage Loan's origination, such Mortgagor did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Originator or any Affiliate of the Originator;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor'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 (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(jjj) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Originator, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments;
(kkk) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. 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, such Mortgage Loan;
(lll) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation;
(mmm) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(nnn) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Paragraph (xx), (yy), (zz), (aaa), (ggg), (hhh), (iii),
(jjj), (kkk), (lll), (mmm) and (nnn) of Subsection 9.02, the Seller shall
repurchase such Mortgage Loan at the Repurchase Price. In the event that a
breach shall involve any representation or warranty set forth in Subsection 9.01
which materially and adversely affects the value of the Mortgage Loans as a
whole or the interests of the Purchaser therein, and such breach cannot be cured
within 60 days of the earlier of either discovery by or notice to the Seller of
such breach, all of the Mortgage Loans affected by such breach shall, at the
Purchaser's option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Subsection 9.02 (except as provided in the second sentence of this paragraph
with respect to certain breaches for which no substitution is permitted) and the
Seller discovers or receives notice of any such breach within 120 days of the
related Closing Date, the Seller shall, at the Purchaser's option and provided
that the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase
the Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted
Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan
or Loans, provided that any such substitution shall be effected not later than
120 days after the related Closing Date. If the Seller has no Qualified
Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan at the
Repurchase Price. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Subsection 9.03 shall be accomplished by either (a)
if the Interim Servicing Agreement has been entered into and is in effect,
deposit in the Custodial Account of the amount of the Repurchase Price for
distribution to the Purchaser on the next scheduled Remittance Date, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution or
(b) if the Interim Servicing Agreement has not been entered into or is no longer
in effect, by direct remittance of the Repurchase Price to the Purchaser or its
designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the
Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the Mortgage Loan
Schedule to reflect the addition of such Qualified Substitute Mortgage Loan to
this Agreement. In connection with any such substitution, the Seller shall be
deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all such
representations and warranties set forth in this Agreement shall be deemed made
as of the date of such substitution. The Seller shall effect such substitution
by delivering to the Custodian or to such other party as the Purchaser may
designate in writing for such Qualified Substitute Mortgage Loan the documents
required by Subsection 6.03 and the Custodial Agreement, with the Mortgage Note
endorsed as required by Subsection 6.03 and the Custodial Agreement. No
substitution will be made in any calendar month after the Determination Date for
such month. The Seller shall remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller representations and warranties contained
in this Agreement or any Reconstitution Agreement. It is understood and agreed
that the obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03 and in
Subsection 14.01 constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans With First Payment
Defaults.
With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan, or (ii) after the related Closing Date is not paid by the
related Mortgagor to the Purchaser within thirty (30) days of such Due Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage Loan from the
Purchaser at a price equal to the related Purchase Price Percentage multiplied
by the then outstanding principal balance of such Mortgage Loan, plus accrued
and unpaid interest thereon from the date to which interest and last paid
through the day prior to the repurchase date at the applicable Mortgage Interest
Rate, plus any outstanding advances owed to any servicer in connection with such
Mortgage Loan. The Purchaser shall notify the Seller and request a repurchase
within 90 days after the Mortgagor fails to make such payment and the Seller
shall repurchase such delinquent Mortgage Loan within forty-five (45) days of
receipt of such notice. Notwithstanding the foregoing, if any payment referred
to above is received by the Seller following the Transfer Date but such payment
is made within the allotted thirty (30) day period, the Purchaser shall not have
the option to request a repurchase.
Subsection 9.05 Premium Recapture
With respect to any Mortgage Loan without prepayment penalties that
prepays in full during the first three months following the Closing Date, the
Seller shall pay the Purchaser, within three (3) Business Days after such
prepayment in full, an amount equal to the excess of the Purchase Price
Percentage for such Mortgage Loan over par, multiplied by the outstanding
principal balance of such Mortgage Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette,
or transmit by modem, a listing on a loan-level basis of the
necessary information to compute the Purchase Price of the
Mortgage Loans delivered on such Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and under the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as
specified therein) shall be true and correct as of the related
Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default
under this Agreement or an Event of Default under the Interim
Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the Interim Servicing Agreement, dated as of the initial
Cut-off Date (to be executed and delivered only for the
initial Closing Date);
3. with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date;
4. the related Mortgage Loan Schedule, one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached the related Assignment and Conveyance as the Mortgage
Loan Schedule thereto;
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. a Custodial Account Letter Agreement or a Custodial Account
Certification, as applicable, as required under the Interim
Servicing Agreement;
7. an Escrow Account Letter Agreement or an Escrow Account
Certification, as applicable, as required under the Interim
Servicing Agreement;
8. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments thereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon
request of the Purchaser;
9. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
10. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
11. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
12. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
13. Assignment and Conveyance Agreement in the form of Exhibit G
hereto, and all exhibits thereto;
14. with respect to each Closing Date, the Underwriting Guidelines
to be attached to the related Assignment and Conveyance; and
15. a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each a "Reconstitution Date") at the Purchaser's sole option, the Purchaser may
effect a sale (each, a "Reconstitution") of some or all of the Mortgage Loans
then subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Xxx Transfer"); or
(ii) Freddie Mac (the "Freddie Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Freddie Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit I
(collectively the agreements referred to herein as designated, the
"Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements reasonably required by the Purchaser; and (3) to
restate the representations and warranties set forth in this Agreement and the
Interim Servicing Agreement as of the settlement or closing date in connection
with such Reconstitution that occurs on or prior to six (6) months following the
related Closing Date and in connection with any Reconstitution thereafter, to
restate the representations and warranties set forth in this Agreement and the
Interim Servicing Agreement as of the related Closing Date (each, a
"Reconstitution Date"), or make the representations and warranties set forth in
the related selling/servicing guide of the master servicer or issuer, as the
case may be, in connection with such Reconstitution. The Seller shall use its
reasonable best efforts to provide to such master servicer or issuer, as the
case may be, and any other participants in such Reconstitution: (i) any and all
information and appropriate verification of information which may be reasonably
available to the Seller or its affiliates, whether through letters of its
auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request; (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Seller as are reasonably believed necessary
by the Purchaser or any such other participant, including, without limitation,
an Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit B; and (iii) to execute, deliver and satisfy all conditions
set forth in any indemnity agreement required by the Purchaser or any such
participant. The Seller shall indemnify the Purchaser, each Affiliate of the
Purchaser participating in the Reconstitution, each underwriter or placement
agent participating in the Reconstitution, and each Person who controls the
Purchaser, such Affiliate, underwriter or placement agent and their respective
present and former directors, officers, employees and agents, and hold each of
them harmless from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that each of them may sustain in any way
related to any information provided by or on behalf of the Seller regarding the
Seller, the Seller's servicing practices or performance, the Mortgage Loans or
the Underwriting Guidelines set forth in any offering document (including,
without limitation, structural term sheets, collateral term sheets and
computational materials) prepared in connection with any Reconstitution. For
purposes of the previous sentence, "Purchaser" shall mean the Person then acting
as the Purchaser under this Agreement and any and all Persons who previously
were "Purchasers" under this Agreement. Moreover, the Seller agrees to cooperate
with all reasonable requests made by the Purchaser to effect such Reconstitution
Agreements.
Notwithstanding the foregoing, the Seller shall not be obligated to
any greater extent under any Reconstitution Agreement than it is under this
Agreement. In addition, the Purchaser will reimburse to the Seller up to $10,000
of the Seller's out-of-pocket expenses incurred in connection with a
Securitization Transfer.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall execute each
Assignment of Mortgage, track such Assignments of Mortgage to ensure they have
been recorded and deliver them as required by the prospective purchaser or
trustee, as applicable, upon the Seller's receipt thereof. Additionally, the
Seller shall prepare and execute, at the direction of the Purchaser, any note
endorsement (consistent with this Agreement) in connection with any and all
seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and its present and former
directors, officers, employees, and agents and any Successor Servicer and its
present and former directors, officers, employees, and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and expenses (including legal
fees and expenses incurred in connection with the enforcement of the Seller's
Indemnification obligation under Subsection 14.01) and related costs, judgments,
and any other costs, fees and expenses that such parties may sustain in any way
related to the failure of the Seller to perform its duties and to service the
Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. For purposes of
this paragraph "Purchaser" shall mean the Person then acting as the Purchaser
under this Agreement and any and all Persons who previously were "Purchasers"
under this Agreement and "Successor Purchaser" shall mean any Person designated
as the Successor Servicer pursuant to this Agreement and any and all Persons who
previously were Successor Servicers pursuant to this Agreement. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans,
assume (with the prior written consent of the Purchaser, which consent shall not
be unreasonably withheld) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the Purchaser
in respect of such claim. The Purchaser promptly shall reimburse the Seller for
all amounts advanced by it pursuant to the preceding sentence, except when the
claim is in any way related to the Seller's indemnification pursuant to Section
9, or is in any way related to the failure of the Seller to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a limited liability company under the laws of the state of its
incorporation except as permitted herein, and will obtain and preserve its
qualification to do business as a foreign limited liability company in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, or any of the Mortgage Loans and
to perform its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any entity resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a value or net worth of at least
$25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans is mandatory from and after the date of the execution of the Purchase
Price and Terms Agreement, it being specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser (including damages to prospective
purchasers of the Mortgage Loans) in the event of the Seller's failure to
deliver (i) each of the related Mortgage Loans or (ii) one or more Qualified
Substitute Mortgage Loans or (iii) one or more Mortgage Loans otherwise
reasonably acceptable to the Purchaser on or before the related Closing Date.
The Seller hereby grants to the Purchaser a lien on and a continuing security
interest in each Mortgage Loan and each document and instrument evidencing each
such Mortgage Loan to secure the performance by the Seller of its obligations
under the related Purchase Price and Terms Agreement, and the Seller agrees that
it shall hold such Mortgage Loans in custody for the Purchaser subject to the
Purchaser's (i) right to reject any Mortgage Loan (or Qualified Substitute
Mortgage Loan) under the terms of this Agreement and to require another Mortgage
Loan (or Qualified Substitute Mortgage Loan) to be substituted therefor, and
(ii) obligation to pay the Purchase Price for the Mortgage Loans. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Decision One Mortgage Company, LLC
0000 X.X. Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
With a copy to:
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-1935
Attention: Xxxxxx X. Xxxxxx, Xx./Xxxxxxx X. Xxxxxxx, Xx.
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent shall not be unreasonably withheld. This Agreement may be
assigned, pledged or hypothecated by the Purchaser in whole or in part, and with
respect to one or more of the Mortgage Loans, without the consent of the Seller.
In the event the Purchaser assigns this Agreement, and the assignee assumes any
of the Purchaser's obligations hereunder, the Seller acknowledges and agrees to
look solely to such assignee, and not to the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability to
the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not cause any action to be taken by any of its affiliates, and that it will
not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail (via electronic means or otherwise), solicit
the borrower or obligor under any Mortgage Loan for any purpose whatsoever,
including to refinance a Mortgage Loan, in whole or in part, without (i) the
prior written consent of the Purchaser; or (ii) written notice from the related
borrower or obligor under a Mortgage Loan of such party's intention to refinance
such Mortgage Loan. It is understood and agreed that all rights and benefits
relating to the specific solicitation of any Mortgagors and the attendant
rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Purchaser pursuant hereto on the Closing Date and the Seller
shall take no action to undermine these rights and benefits. Notwithstanding the
foregoing, it is understood and agreed that the Seller, or any of its respective
affiliates:
(1) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(2) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
DECISION ONE MORTGAGE COMPANY, LLC
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon.;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except with respect to MERS
Designated Loans). The Assignment of Mortgage shall be delivered in blank. If
the Mortgage Loan was acquired by the Seller in a merger, the Assignment of
Mortgage must be made by "[Seller], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee with evidence of recording thereon;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Morgage.
Notwithstanding the foregoing, in connection with any item described
above in clauses (c), (d), (f) or (g), if the Seller cannot deliver or cause to
be delivered the original of any such item with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public recording
office where such item has been delivered for recordation or because such item
has been lost or because such public recording office retains the original
recorded item (each such item, a "Delayed Document"), the Seller shall deliver
or cause to be delivered to the Custodian, (i) in the case of a delay caused by
the public recording office, a photocopy of such Delayed Document, together with
an Officer's Certificate of the Seller (or certified by the title company,
escrow agent, or closing attorney) to the effect that such copy is a true and
correct copy of the Delayed Document that has been dispatched to the appropriate
public recording office for recordation (and the original recorded Delayed
Document or a copy of such Delayed Document certified by such public recording
office to be a true and complete copy of the original recorded Delayed Document
will be promptly delivered to the Custodian upon receipt thereof by the Seller);
or (ii) in the case of a Delayed Document where a public recording office
retains the original recorded Delayed Document or in the case where a Delayed
Document is lost after recordation in a public recording office, a copy of such
Delayed Document certified by such public recording office to be a true and
complete copy of the original recorded Delayed Document; provided however in
connection with clauses (f) and (g), the Seller may deliver or cause to be
delivered to the Custodian in the case of a delay caused by the public recording
office, a photocopy of such Delayed Document certified by the Seller to be true
and correct, with the original recorded Delayed Document to be provided to the
Custodian within 180 days of the related Closing Date.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document is
expected to be delivered to the Custodian. An extension of the date specified in
(iv) above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
Exhibit B
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), [______________], a
[______________] (the "Initial Purchaser") and [______________], a
[______________] (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party and the Depositor are parties to the
Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party "The Mortgage Loan
Pool--Underwriting Guidelines" and (ii) regarding the Mortgage Loans, the
related mortgagors and/or the related Mortgaged Properties (but in the case of
this clause (ii), only to the extent any untrue statement or omission arose from
or is based upon errors or omissions in the information concerning the Mortgage
Loans, the related mortgagors and/or the related Mortgaged Properties, as
applicable, provided to the Depositor or any affiliate by or on behalf of the
Indemnifying Party).
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the Indemnifying
Party, as responsible party and servicer, and [______________].
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates, including any structural term sheets, collateral terms sheets and
computational materials used in connection with such offering.
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates, including any structural term sheets, collateral terms sheets and
computational materials used in connection with such offering.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Purchase Agreement: The Purchase Agreement, dated ___________, 200_,
between the Depositor and the Initial Purchaser, relating to the sale of the
Privately Offered Certificates.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, between the Depositor and the Underwriter, relating to the
sale of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor, the Underwriter and the Initial Purchaser and their respective
affiliates, and their respective present and former directors, officers,
employees, agents and each Person, if any, that controls the Depositor, the
Underwriter or such affiliate, within the meaning of either the 1933 Act or the
1934 Act (collectively, the "Indemnified Parties"), against any and all losses,
claims, damages, penalties, fines, forfeitures or liabilities, joint or several,
to which each such Indemnified Party may become subject, under the 1933 Act, the
1934 Act or otherwise, to the extent that such losses, claims, damages,
penalties, fines, forfeitures or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Prospectus Supplement, the Private
Placement Memorandum or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to information set forth in the Indemnifying Party
Information, and the Indemnifying Party shall in each case reimburse each
Indemnified Party for any legal or other costs, fees, or expenses reasonably
incurred and as incurred by such Indemnified Party in connection with
investigating or defending any such loss, claim, damage, penalty, fine,
forfeiture, liability or action. The Indemnifying Party's liability under this
Section 3.1 shall be in addition to any other liability that the Indemnifying
Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[ ]
--------------
[ ]
--------------
[ ]
--------------
Attention:
Telephone:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[ ]
--------------
[ ]
--------------
[ ]
--------------
Attention:
Telephone:
In the case of the Indemnifying Party:
[ ]
--------------
[ ]
--------------
[ ]
--------------
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:
--------------------------------------
Name:
Title:
[UNDERWRITER]
By:
--------------------------------------
Name:
Title:
[INDEMNIFYING PARTY]
By:
--------------------------------------
Name:
Title:
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
DECISION ONE MORTGAGE COMPANY, LLC
I, Xxxxxxx X. Xxxxx, hereby certify that I am a duly appointed, qualified
and acting Assistant Secretary of DECISION ONE MORTGAGE COMPANY, LLC, a North
Carolina Limited Liability Company (the "Company"), and hereby further certify
to the following
1. Attached hereto as Exhibit 1 is a true, correct and complete copy of the
Integrated Limited Liability Company Operating Agreement of the Company
which is in full force and effect on the date hereof and which has been in
effect without amendment, waiver, rescission or modification since March
4, 1996 and restated as of Restated as of August 31, 1999.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy of the
bylaws of the Company which are in effect on the date hereof and which
have been in effect without amendment, waiver rescission or modification
since March 4, 1996.
3. Attached hereto as Exhibit 3 is a certificate of existence of the Company
issued State of North Carolina Department of The Secretary of State on
October 28, 2004, and no event has occurred since the date thereof which
would impair such standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy of the
resolutions adopted by the Managers of the Limited Liability Company on
October 27, 2004, which have not been rescinded or modified.
5. Each person listed on Exhibit 5 attached hereto who, as an officer or
representative of the Company, signed (a) the Mortgage Loan Purchase and
Warranties Agreement, dated as of October 1, 2004, by and between the
Company and Xxxxxx Xxxxxxx Mortgage Capital Inc. ("MS Capital"), (b) the
Interim Servicing Agreement, dated as of October 1, 2004, by and between
the Company and MS Capital and (c) the Custodial Agreement, dated as of
October 1, 2004, by and among MS Capital, the Company and Deutsche Bank
Trust Company Americas, as Custodian, and (d) any other document delivered
or on the date hereof in connection with any purchase described in the
agreements set forth above was, at the respective times of such signing
and delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the office set
forth opposite his or her name on Exhibit 5, and the signatures of such
persons appearing on such documents are their genuine signatures.
6. To my knowledge, neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Mortgage Loan Purchase and
Warranties Agreement, the Interim Servicing Agreement and the Custodial
Agreement referred to above conflicts or will conflict with or results or
will result in a breach of or constitutes or will constitute a default
under the charter
IN WITNESS WHEREOF, the undersigned has executed this Certificate on this
the 28th day of October 2004.
---------------------------------
X. X.Xxxxx
Assistant Secretary
Exhibit 1
EXHIBIT 1
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
DECISION ONE MORTGAGE COMPANY, LLC
Exhibit 2
EXHIBIT 2
BYLAWS
DECISION ONE MORTGAGE COMPANY, LLC
Exhibit 3
EXHIBIT 3
CERTIFICATE OF GOOD STANDING - NORTH CAROLINA
DECISION ONE MORTGAGE COMPANY, LLC
Exhibit 4
EXHIBIT 4
DECISION ONE MORTGAGE COMPANY, LLC
"WHEREAS, the Company desires to sell or securitize pools of
Mortgage Loans held for sale;
WHEREAS, in order to effect such sales and securitizations, the
Company must enter into Mortgage Loan Purchase Agreements, Interim Servicing
Agreements, Custodial Agreements and related and similar agreements;
NOW, THEREFORE, BE IT RESOLVED, that the Company is hereby
authorized to enter into (a) Mortgage Loan Purchase Agreements, (b) Interim
Servicing Agreements and (c) Custodial Agreements and related and similar
agreements.
RESOLVED FURTHER, that each of the President, and each Senior Vice
President, Vice President, Secretary and Assistant Secretary of the Company is
hereby authorized, for and on behalf of the Company, to execute and deliver each
of the foregoing agreements, as well as such other agreements, instruments and
certificates, and to take such other action, as any of them may deem necessary
or advisable to carry out the purpose of the foregoing resolutions.
BE IT FURTHER RESOLVED, that the Company is authorized to enter into
the Mortgage Loan Purchase and Warranties Agreement, dated as of October 1,
2004, and the Interim Servicing Agreement, dated as of October 1, 2004, with
XXXXXX XXXXXXX MORTGAGE CAPITAL INC. ("MS Capital"), and the Custodial
Agreement, dated as of October 1, 2004, among MS Capital, the Company and
Deutsche Bank Trust Company Americas, as Custodian, as well as such other
agreements, instruments and certificates as any of them may deem necessary or
advisable in connection therewith, for the purpose of selling mortgage loans to
MS Capital from time to time and servicing such mortgage loans on an interim
basis."
Exhibit 5
EXHIBIT 5
LIST OF OFFICERS AS ADOPTED JUNE 21, 2004
DECISION ONE MORTGAGE COMPANY, LLC
Manager Xxxxx X. Xxxxxxxx
Manager Xxxxxxx X. Xxxxxxx
President Xxxxx X. Xxxxxxxx
Senior Vice President & Assistant Xxxxxxx X. Xxxxxxx
Secretary
Senior Vice President of Finance, Xxxxxxx X. Xxxxxxx
CFO, Treasurer & Assistant Secretary
Senior Vice President & Assistant Xxxxxx X. Xxxxxx, Xx.
Secretary
Senior Vice President & Assistant Xxx X. Xxxxxxxxx
Secretary
Senior Vice President & Assistant Xxxxx X. Xxxxxxx
Secretary
Vice President & Controller Xxxxxxxxx X. Xxxxx
Vice President, Secretary & General Xxxxxx X. Xxxxxxxxxx
Counsel
Vice President & Assistant Secretary Xxxxx X. Xxxxxx
Vice President & Assistant Secretary Xxxx X. Xxxx
Vice President Xxxxx X. Xxxxxx
Assistant Vice President Xxxxxx X. Xxxxxx
Assistant Vice President & Assistant Xxxxxx X. Xxxxxxxx
Secretary
Assistant Vice President and Xxxxx X. Xxxxxxxx
Assistant Secretary
Assistant Vice President Xxxxxxx X. Xxxxxxx
Managing Principal Xxxxxx X. XxXxxx
Assistant Secretary Xxxxxxx X. Xxxxx
Assistant Secretary Xxxxxxxx X. Xxxxxx
Assistant Secretary Xxxx X. Xxxxx
Assistant Secretary Xxxx X. Xxxxxx
Assistant Secretary Xxxxx X. Xxxxxxx
Assistant Secretary Xxxxx X. Xxxxxxx
Assistant Secretary Xxxxxxx X. Xxxxxxx
Assistant Secretary Xxxxxxx X. Xxxxxx
Assistant Secretary Xxxxx X. Xxx
Assistant Secretary Xxxxxxxx X. Xxxx
Assistant Secretary Xxxxx X. Xxxxxxx
Assistant Secretary Xxxxxx X. Xxxxxxx
Assistant Secretary Xxxxxx X. Xxxxxxxx
Assistant Secretary Xxxxxxx. X. Xxxx
Assistant Secretary XxXxxxx X. Xxxxx
Assistant Secretary Xxxxx X. Xxx
Assistant Secretary Xxxxx X. Xxxxxx
Assistant Secretary Xxxxx X. Xxxxxx
Assistant Secretary Xxxx Xxx Xxxxxxxx
Assistant Secretary Xxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxx X. Xxxx
Assistant Secretary Xxxx X. Xxxxxxx
Assistant Secretary Xxxx X. Xxxx
Assistant Secretary Xxxxxxx X. Xxxxx
Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser"), dated as of
_________ __, 200_ (the "Purchase Agreement") which sale is in the form of whole
loans, serviced pursuant to an Interim Servicing Agreement dated as of _____ __,
____ between the Purchaser, and, ________________________ (the "Interim
Servicer") (the "Servicing Agreement", and collectively with the Purchase
Agreement, the "Agreements"). Capitalized terms not otherwise defined herein
have the meanings set forth in the Purchase Agreement.
[We] [I] have examined the following documents:
(i) the Purchase Agreement;
(ii) the Servicing Agreement;
(iii) the form of Assignment of Mortgage;
(iv) the form of endorsement of the Mortgage Notes; and
(v) such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
(i) The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of the [United
States] and is qualified to transact business in, and is in
good standing under, the laws of [the state of incorporation].
(ii) The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver the
Agreements and to perform and observe the terms and conditions
of the Agreements.
(iii) Each of the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
(iv) The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
(v) The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
(vi) Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
(vii) Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company the terms of any indenture or other
agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or regulatory body
to which the Company is subject or by which it is bound.
(viii) There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements or the
Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company to perform under the terms of the Agreements.
(ix) The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
(x) The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
Except as otherwise set forth in the Agreements, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
--------------------------
--------------------------
--------------------------
Attention:
-----------------------------
-----------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Mortgage Loan Purchase and
Warranties Agreement. The Company warrants that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
----------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Date:
---------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
----------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Date:
---------------------------
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
Upon receipt of the sum of $_____________ in immediately available funds, the
financial institution named below hereby relinquishes any and all right, title
and interest it may have in all Mortgage Loans to be purchased by to Xxxxxx
Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc. from the Company named below pursuant
to that certain Mortgage Loan Purchase and Warranties Agreement, dated as of
______ __, 200_, and certifies that all notes, mortgages, assignments and other
documents in its possession relating to such Mortgage Loans have been delivered
and released to the Company named below or its designees, as of the date and
time of the sale of such Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc.
Name and Address of Financial Institution
--------------------------------
(name)
--------------------------------
(Address)
By:
-----------------------------
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
-----------------------------
By:
-----------------------------
Title:
--------------------------
Date:
---------------------------
Exhibit G
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of ____________, ________, _______________
("Seller"), as the Seller under (i) that certain Purchase Price and Terms
Agreement, dated as of _________, ____ (the "PPTA"), and (ii) that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of _________, ____
(the "Purchase Agreement"), does hereby sell, transfer, assign, set over and
convey to Xxxxxx Xxxxxxx Mortgage Capital, Inc. ("Purchaser") as the Purchaser
under the Agreements (as defined below) without recourse, but subject to the
terms of the Agreements, all right, title and interest of, in and to the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as Exhibit A
(the "Mortgage Loans"), together with the Mortgage Files and the related
Servicing Rights and all rights and obligations arising under the documents
contained therein. Each Mortgage Loan subject to the Agreements was underwritten
in accordance with, and conforms to, the Underwriting Guidelines attached hereto
as Exhibit C. Pursuant to Section 6 of the Purchase Agreement, the Seller has
delivered to the Custodian the documents for each Mortgage Loan to be purchased
as set forth in the Purchase Agreement. The ownership of each Mortgage Note,
Mortgage and the contents of the Mortgage File and Servicing File is vested in
the Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Seller shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Seller at the will of the Purchaser in a custodial
capacity only. The PPTA and the Purchase Agreement shall collectively be
referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____; (2)
an origination date earlier than __ months prior to the related Cut-off Date;
(3) a FICO Score of less than ___; or (4) a debt-to-income ratio of more than
___%. Each Mortgage Loan has a Mortgage Interest Rate of at least ___% per annum
and an outstanding principal balance of less than $______. Each Adjustable Rate
Mortgage Loan has an Index of [______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
Exhibit H
EXHIBIT H
UNDERWRITING GUIDELINES
Exhibit I
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase Agreement (the "Purchase Agreement"), dated as of [DATE], between the
Assignor, as purchaser (the "Purchaser"), and the Company, as seller, solely
insofar as the Purchase Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Section 9.02
of the Purchase Agreement are true and correct as of the date hereof as if such
representations and warranties were made on the date hereof unless otherwise
specifically stated in such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By:
------------------------------------
Name:
------------------------------------
Its:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
------------------------------------
Name:
------------------------------------
Its:
[ ]
--------------------------
By:
------------------------------------
Name:
------------------------------------
Its:
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT P
NC CAPITAL PURCHASE AGREEMENT
EXECUTION COPY
================================================================================
SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
------------------------------------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
NC CAPITAL CORPORATION,
Seller
------------------------------------------------
Dated as of July 1, 2003
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
SECOND AMENDED AND RESTATED MORTGAGE LOAN
PURCHASE AND WARRANTIES AGREEMENT
This SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of July 1, 2003, by and between
Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation, having an office
at 0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Purchaser") and NC Capital Corporation, a California corporation, having an
office at 00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of January 1, 2003 (the "Original Purchase Agreement"), pursuant to which the
Seller may sell, from time to time, to the Purchaser, and the Purchaser may
purchase, from time to time, from the Seller, certain conventional adjustable
and fixed rate B/C, residential first and second mortgage loans (the "Mortgage
Loans") as described therein, and which shall be delivered in pools of whole
loans (each, a "Mortgage Loan Package") on various dates as provided therein
(each, a "Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend the Original Purchase Agreement to make certain modifications as set forth
herein:
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Xxx Transfer or a Freddie Mac Transfer.
Agreement: This Second Amended and Restated Mortgage Loan Purchase
and Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All late charges, assumption fees, escrow account
benefits, reinstatement fees, and similar types of fees arising from or in
connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which the Originator's servicing operations are located or (iii)
the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement".
Custodian: Deutsche Bank Trust Company Americas, or the Custodian's
successor in interest or permitted assigns, or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The date specified in the Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan, the period commencing on the day immediately succeeding the Due Date for
such Mortgage Loan occurring in the month preceding the month of the Remittance
Date and ending on the next Due Date.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Servicing Agreement (with respect to each Mortgage Loan,
as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: Freddie Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Freddie Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost,"
"threshold," "covered," "predatory" or similar loan under any other applicable
state, federal or local law (or a similarly 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 and/or fees).
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the Lifetime Rate Cap set forth as an amount per annum on the related
Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the
Originator generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the Mortgagor or may be on leased land.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on an unsubordinated estate in
fee simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create, with
respect to a First Lien Loan, a first lien, and with respect to a Second Lien
Loan, a second lien, in each case, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgaged
Property is owner-occupied; (5) the number and type of residential units
constituting the Mortgaged Property; (6) the original months to maturity or the
remaining months to maturity from the related Cut-off Date, in any case based on
the original amortization schedule and, if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (7) with respect
to each First Lien Loan, the Loan-to-Value Ratio at origination, and with
respect to each Second Lien Loan, the CLTV at origination; (8) the Mortgage
Interest Rate as of the related Cut-off Date; (9) the date on which the Monthly
Payment was due on the Mortgage Loan and, if such date is not consistent with
the Due Date currently in effect, such Due Date; (10) the stated maturity date;
(11) the amount of the Monthly Payment as of the related Cut-off Date; (12) the
last payment date on which a payment was actually applied to the outstanding
principal balance; (13) the original principal amount of the Mortgage Loan; (14)
the principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (15) with respect to each Adjustable Rate
Mortgage Loan, the Interest Rate Adjustment Date; (16) with respect to each
Adjustable Rate Mortgage Loan, the Gross Margin; (17) with respect to each
Adjustable Rate Mortgage Loan , the Lifetime Rate Cap under the terms of the
Mortgage Note; (18) with respect to each Adjustable Rate Mortgage Loan, a code
indicating the type of Index; (19) the type of Mortgage Loan (i.e., Fixed Rate
or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (20) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (21) a code indicating the documentation style
(i.e., full, alternative or reduced); (22) the loan credit classification (as
described in the Underwriting Guidelines); (23) whether such Mortgage Loan
provides for a prepayment penalty and, if applicable, the prepayment penalty
period; (24) the Mortgage Interest Rate as of origination; (25) the credit risk
score (FICO score); (26) the date of origination; (27) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Interest Rate adjustment period;
(28) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate adjustment percentage; (29) with respect to each Adjustable Rate Mortgage
Loan, the Mortgage Interest Rate floor; (30) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate Cap as of the first Interest Rate
Adjustment Date; (31) a code indicating whether the Mortgage Loan is a High Cost
Loan; (32) a code indicating whether the Mortgage Loan is a Balloon Mortgage
Loan; (33) the Due Date for the first Monthly Payment; (34) the original Monthly
Payment due; and (35) with respect to the related Mortgagor, the debt-to-income
ratio. With respect to the Mortgage Loans in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the related Cut-off
Date: (1) the number of Mortgage Loans; (2) the current aggregate outstanding
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; (4) the weighted average maturity of the
Mortgage Loans; (5) the applicable Cut-off Date; and (6) the applicable Closing
Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) securing repayment of the debt
evidenced by the related Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement which does not contain a
provision pursuant to which the Mortgagor may convert the Adjustable Rate
Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Originator, will not or, in the case of a proposed advance, would not, be
ultimately recoverable from related Insurance Proceeds, Liquidation Proceeds or
otherwise. The determination by the Originator that it has made a Nonrecoverable
Advance or that any proposed advance of principal and interest, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller, the Originator and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its successor in
interest or assigns or any successor to the Purchaser under this Agreement as
herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the Originator, who had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation was
not affected by the approval or disapproval of the Mortgage Loan, and such
appraiser and the appraisal made by such appraiser both satisfied the
requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Xxx and Freddie Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance (or such other rating as may be required by a Rating
Agency in connection with a Securitization Transfer in order to achieve the
desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and/or the Originator and the Purchaser and/or certain third
parties on the Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans sold hereunder, in connection with a Whole Loan Transfer, Agency
Transfer or a Securitization Transfer pursuant to Section 13, including, but not
limited to, a seller's warranties and servicing agreement with respect to a
Whole Loan Transfer, and a pooling and servicing agreement and/or
seller/servicer agreements and related custodial/trust agreement and documents
with respect to a Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Servicing Agreement (with
respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: NC Capital Corporation, its successors in interest and
assigns.
Servicing Agreement: The servicing agreement, dated as of July 1,
2003, between the Purchaser and the Originator, providing for the Originator to
service the Mortgage Loans as specified in the Servicing Agreement.
Servicing Fee: With respect to each Mortgage Loan subject to the
Servicing Agreement, a fee payable monthly equal to one-twelfth of the product
of (a) the Servicing Fee Rate and (b) the outstanding principal balance of such
Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated for any
portion of a month during which the Mortgage Loan is serviced by the Originator
under the Servicing Agreement. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by this Agreement) of such Monthly Payment
collected by the Originator, or as otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Originator consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Sections 9.03 and 14.01.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the
Originator, a copy of which is attached hereto as Exhibit G and a then-current
copy of which shall be attached as an exhibit to the related Assignment and
Conveyance.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller is obligated to deliver those Mortgage Loans owned by the
Seller and funded by the Originator pursuant to the original terms of the
Originator's commitment to the mortgagor. The Seller shall deliver the related
Mortgage Loan Schedule for the Mortgage Loans to be purchased on a particular
Closing Date to the Purchaser at least two (2) Business Days prior to the
related Closing Date. The related Mortgage Loan Schedule shall be the related
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the related Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off Date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least three (3) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its
option and without notice to the Seller, purchase some or all of the Mortgage
Loans without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Originator pursuant to this Agreement to be appropriately identified in the
Seller's computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Seller shall
cause the Originator to release from its custody the contents of any Servicing
File retained by it only in accordance with this Agreement or the Servicing
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Originator after the
related Cut-off Date on or in connection with a Mortgage Loan shall be vested in
the Purchaser or one or more designees of the Purchaser; provided, however, that
all funds received on or in connection with a Mortgage Loan shall be received
and held by the Seller or the Originator in trust for the benefit of the
Purchaser or the appropriate designee of the Purchaser, as the case may be, as
the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall or shall cause the Originator to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or shall cause
the Originator to maintain in its possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Freddie Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Xxx Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller or Originator
may be in the form of microfilm or microfiche so long as the Seller or
Originator complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
three (3) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Originator to forward to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Seller shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Originator to, have an internal
quality control program that verifies, on a regular basis, the existence and
accuracy of the legal documents, credit documents, property appraisals, and
underwriting decisions. The program shall include evaluating and monitoring the
overall quality of the Originator's loan production and the servicing activities
of the Originator. The program is to ensure that the Mortgage Loans are
originated and serviced in accordance with Accepted Servicing Standards and the
Underwriting Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard against errors and omissions by officers, employees, or other
authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Servicing Agreement (with respect to each Mortgage Loan,
for an interim period, as specified therein), the Seller hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the Servicing Rights.
The Purchaser shall retain the Originator as independent contract servicer of
the Mortgage Loans pursuant to and in accordance with the terms and conditions
contained in the Servicing Agreement. Pursuant to the Servicing Agreement, the
Originator shall begin servicing the Mortgage Loans on behalf of the Purchaser
and shall be entitled to the Servicing Fee and any Ancillary Income with respect
to such Mortgage Loans from the related Closing Date until the termination of
the Servicing Agreement with respect to any of the Mortgage Loans as set forth
in the Servicing Agreement. The Seller shall cause the Originator to service the
Mortgage Loans in accordance with the terms of the Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Originator to cease all servicing responsibilities related to the
related Mortgage Loans subject to such Transfer Date. The Transfer Date shall be
the date determined in accordance with Section 6.03 of the Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
On or prior to the applicable Transfer Date, the Seller shall cause
the Originator shall, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall cause the Originator to
mail to the Mortgagor of each related Mortgage Loan a letter advising such
Mortgagor of the transfer of the servicing of the related Mortgage Loan to the
Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx National
Affordable Housing Act of 1990; provided, however, the content and format of the
letter shall have the prior approval of the Purchaser. The Seller shall cause
the Originator to provide the Purchaser with copies of all such related notices
no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall cause the Originator to transmit to the applicable taxing authorities and
insurance companies (including primary mortgage insurance policy insurers, if
applicable) and/or agents, notification of the transfer of the servicing to the
Purchaser, or its designee, and instructions to deliver all notices, tax bills
and insurance statements, as the case may be, to the Purchaser from and after
the related Transfer Date. The Seller shall cause the Originator to provide the
Purchaser with copies of all such notices no later than such Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Originator to forward to the Purchaser, or its designee, all servicing records
and the Servicing File in the Originator's possession relating to each related
Mortgage Loan including the information enumerated in the Servicing Agreement
(with respect to each such Mortgage Loan, for an interim period, as specified
therein).
(d) Escrow Payments. The Seller shall cause the Originator to
provide the Purchaser, or its designee, with immediately available funds by wire
transfer in the amount of the net Escrow Payments and suspense balances and all
loss draft balances associated with the related Mortgage Loans. The Seller shall
cause the Originator to provide the Purchaser with an accounting statement of
Escrow Payments and suspense balances and loss draft balances sufficient to
enable the Purchaser to reconcile the amount of such payment with the accounts
of the Mortgage Loans. Additionally, the Seller shall cause the Originator to
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Originator.
(e) Payoffs and Assumptions. The Seller shall cause the Originator
to provide to the Purchaser, or its designee, copies of all assumption and
payoff statements generated by the Originator on the related Mortgage Loans from
the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Originator on each related Mortgage
Loan shall be properly applied by the Originator to the account of the
particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The Seller shall
cause the amount of any related Monthly Payments received by the Originator
after the Transfer Date to be forwarded to the Purchaser by overnight mail on
the date of receipt. The Seller shall cause the Originator to notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Originator forwards with its payment sufficient
information to permit appropriate processing of the payment by the Purchaser.
The Seller shall cause the Originator to assume full responsibility for the
necessary and appropriate legal application of such Monthly Payments received by
the Originator after the Transfer Date with respect to related Mortgage Loans
then in foreclosure or bankruptcy; provided, for purposes of this Agreement,
necessary and appropriate legal application of such Monthly Payments shall
include, but not be limited to, endorsement of a Monthly Payment to the
Purchaser with the particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application instructions and the
Seller shall comply with the foregoing requirements with respect to all Monthly
Payments received by the it after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered after
such Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall or the Seller shall cause the Originator to be liable
for the amount of such shortage. The Seller shall or the Seller
shall cause the Originator to reimburse the Purchaser for the amount
of such shortage within thirty (30) days after receipt of written
demand therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Originator with respect to the related Mortgage Loans shall be
in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall or shall cause the Originator
to, on or before the Transfer Date, reconcile principal balances and make any
monetary adjustments required by the Purchaser. Any such monetary adjustments
will be transferred between the Seller, the Originator and the Purchaser as
appropriate.
(k) IRS Forms. The Seller shall or shall cause the Originator to
file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller or Originator shall provide copies of
such forms to the Purchaser upon request and shall reimburse the Purchaser for
any costs or penalties incurred by the Purchaser due to the Seller's or
Originator's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing of
such Mortgage Loan in accordance with the terms of this Agreement and the
Servicing Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder and thereunder;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law; and all
requisite corporate action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Seller's charter or by-laws or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(d) Ability to Service. Originator has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. The Originator is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable, and
is in good standing to enforce, originate, sell mortgage loans to, and service
mortgage loans in each jurisdiction wherein the Mortgaged Properties are
located;
(e) Reasonable Servicing Fee. The Originator acknowledges and agrees
that the Servicing Fee, represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Originator,
for accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement and the
Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the Department of Veterans Affairs is
required for the execution, delivery and performance by the Seller of or
compliance by the Seller with this Agreement or the Mortgage Loans, the delivery
of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage
Loans or the consummation of the transactions contemplated by this Agreement, or
if required, such approval has been obtained prior to the related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(j) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(l) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. In addition, the Seller has delivered information as to its loan
gain and loss experience in respect of foreclosures and its loan delinquency
experience for the immediately preceding three-year period, in each case with
respect to mortgage loans owned by it and such mortgage loans serviced for
others during such period, and all such information so delivered shall be true
and correct in all material respects. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. The
Seller has completed any forms requested by the Purchaser in a timely manner and
in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(q) Origination. The Originator's decision to originate any mortgage
loan or to deny any mortgage loan application is an independent decision based
upon Originator's Underwriting Guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated;
(r) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including, without limitation, the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); and
(s) Credit Reporting. The Seller shall cause the Originator, as
servicer, to fully furnish, in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Freddie Mac, as well as all additional requirements set forth in Section 2.10 of
the Servicing Agreement. If required by the National Flood Insurance Act of
1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to Xxxxxx Xxx and Freddie Mac,
as well as all additional requirements set forth in Section 2.10 of the
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Xxxxxxxxx's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws applicable to the Mortgage Loan
have been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Xxx and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit B to the related Assignment and
Conveyance Agreement, a mobile home erected thereon or by a mixed-use property,
a property in excess of 10 acres, or other unique property types. As of the date
of origination, no portion of the Mortgaged Property was used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that Mortgaged
Properties which contain a home office shall not be considered as being used for
commercial purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials other than
those commonly used for homeowner repair, maintenance and/or household purposes.
In the case of a Manufactured Home, (i) the related manufactured dwelling and
the related land are subject to a Mortgage properly filed in the appropriate
public recording office and naming Seller as mortgagee, (ii) the applicable laws
of the jurisdiction in which the related Mortgaged Property is located will deem
the manufactured dwelling located on such Mortgaged Property to be a part of the
real property on which such dwelling is located, and (iii) such Manufactured
Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by manufactured
housing treated as a single family residence under Section 25(e)(10) of the
Code;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or a
second lien (with respect to a second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser.;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (1), (2) and (3) of Paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection with
the Mortgage Loan. The Mortgage Interest Rate as well as, with respect to
Adjustable Rate Mortgage loans, the Lifetime Rate Cap and the Periodic Cap, are
as set forth on the related Mortgage Loan Schedule. The Mortgage Note is payable
in equal monthly installments of principal and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Loan is
payable on the first day of each month. There are no Convertible Mortgage Loans
which contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Xxxxxx
Xxx and neither the Seller nor the Originator has made any representations to a
Mortgagor that are inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. 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 but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in Paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in mortgage loans similar to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first (with respect to a First Lien Loan) or a second (with
respect to a Second Lien Loan) lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Xxx and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Originator with respect to the Mortgage Loan have been in all
respects in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Originator and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Originator executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgage Property;
and nothing further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or any similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
Originator, who had no interest, direct or indirect in the Mortgaged Property or
in any loan made on the security thereof, and whose compensation is not affected
by the approval or disapproval of the Mortgage Loan, and the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Freddie Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Originator has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall cause the Originator to maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or
the Originator has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(zz) Prepayment Penalty. Each Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note and set forth on the
related Mortgage Loan Schedule. Such prepayment penalty is in an amount equal to
the lesser of (a) the maximum amount permitted under applicable state law, and
(b) if the Mortgaged Property is secured by residential real property located in
a state other than Arizona, Maine, Massachusetts, New York, South Carolina or
Wisconsin, six months interest on the related prepaid amount. No such prepayment
penalty may be imposed for a term in excess of (y) with respect to Mortgage
Loans originated prior to October 1, 2002, five (5) years from the date of
origination and (z) with respect to Mortgage Loans originated on or after
October 1, 2002, three (3) years from the date of origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan. No Mortgage Loan is covered by the Home Ownership and Equity Protection
Act of 1994 and no Mortgage Loan is in violation of any comparable state or
local law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of the Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(ddd) Georgia Fair Lending Act. There is no Mortgage Loan that was
originated on or after October 1, 2002 and on or prior to March 7, 2003, which
is secured by property located in the State of Georgia. There is no Mortgage
Loan that was originated after March 7, 2003, which is a "high-cost home loan"
as defined under the Georgia Fair Lending Act;
(eee) Mortgaged Property Located in New York State. There is no
Mortgage Loan secured by Mortgaged Property located in the State of New York (1)
with an original principal balance of $300,000 or less, (2) has an application
date on or after April 1, 2003 and (3) the terms of such loan equal or exceed
either the APR or the points and fees threshold for "high-cost home loans," as
defined in Section 6-L of the New York State Banking Law; and
(fff) Fair Credit Reporting Act. The Seller has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Paragraph (zz)(y), (zz)(z), (aaa), (bbb), (ccc), (ddd),
(eee) or (fff) of Subsection 9.02, the Seller shall repurchase such Mortgage
Loan at the Repurchase Price. In the event that a breach shall involve any
representation or warranty set forth in Subsection 9.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans affected by such breach shall,
at the Purchaser's option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Subsection 9.02 (except as provided in the second sentence of this paragraph
with respect to certain breaches for which no substitution is permitted) and the
Seller discovers or receives notice of any such breach within 120 days of the
related Closing Date, the Seller shall, at the Purchaser's option and provided
that the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase
the Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted
Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan
or Loans, provided that any such substitution shall be effected not later than
120 days after the related Closing Date. If the Seller has no Qualified
Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan at the
Repurchase Price. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Subsection 9.03 shall be accomplished by either (a)
if the Servicing Agreement has been entered into and is in effect, deposit in
the Custodial Account of the amount of the Repurchase Price for distribution to
the Purchaser on the next scheduled Remittance Date, after deducting therefrom
any amount received in respect of such repurchased Mortgage Loan or Loans and
being held in the Custodial Account for future distribution or (b) if the
Servicing Agreement has not been entered into or is no longer in effect, by
direct remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Originator to remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold such
parties harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the Seller representations
and warranties contained in this Agreement or any Reconstitution Agreement. It
is understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and the Successor Servicer as provided in this
Subsection 9.03 constitute the sole remedies of the Purchaser and the Successor
Servicer respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 [RESERVED].
Subsection 9.05 Repurchase of Mortgage Loans With First Payment
Defaults.
If the related Mortgagor is delinquent with respect to the Mortgage
Loan's first Monthly Payment either (i) after origination of such Mortgage Loan,
or (ii) after the related Closing Date, the Seller, at the Purchaser's option,
shall repurchase such Mortgage Loan from the Purchaser at a price equal to the
percentage of par as stated in the related Purchase Price and Terms Agreement
(subject to adjustment as provided therein) multiplied by the then outstanding
principal balance of such Mortgage Loan, plus accrued and unpaid interest
thereon from the date to which interest was last paid through the day prior to
the repurchase date at the applicable Mortgage Interest Rate, plus any
outstanding advances owed to any servicer in connection with such Mortgage Loan.
A Mortgage Loan's first Monthly Payment after the related Closing Date shall be
considered "delinquent" if such Monthly Payment has not been received by the
Purchaser by the fifteenth (15th) day of the month following the month in which
the Monthly Payment was due. The Purchaser shall have ninety (90) days following
any such delinquency to notify the Seller of any repurchase request and the
Seller shall repurchase such delinquent Mortgage Loan within thirty (30) days of
the date of such request.
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without prepayment penalties, in the
event that any such Mortgage Loan prepays in full either (i) on or before a
Securitization Transfer or (ii) during the first six months following the
related Closing Date, the Seller shall pay the Purchaser, within three (3)
Business Days of such prepayment in full, the difference between the Purchase
Price for such Mortgage Loan and the outstanding principal balance of such
Mortgage Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette,
or transmit by modem, a listing on a loan-level basis of the
necessary information to compute the Purchase Price of the
Mortgage Loans delivered on such Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Originator under the Servicing
Agreement (with respect to each Mortgage Loan, as specified
therein) shall be true and correct as of the related Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement or an Event of Default under the Servicing
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the related Mortgage Loan Schedule (one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
3. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
4. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
each of the Seller and the Originator, including all
attachments thereto; with respect to subsequent Closing Dates,
an Officer's Certificate upon request of the Purchaser;
5. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
6. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
7. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
8. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
9. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G; and
10. Assignment and Conveyance Agreement in the form of Exhibit H
hereto, and all exhibits thereto.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after each Closing Date, on one or more dates (each, a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Xxx Transfer"); or
(ii) Freddie Mac (the "Freddie Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Freddie Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; and (3) to restate the
representations and warranties set forth in this Agreement and the Servicing
Agreement as of the settlement or closing date in connection with such
Reconstitution that occurs on or prior to the date which is six (6) months
following the related Closing Date and in connection with any Reconstitution on
or after the date which is six (6) months following the related Closing Date, to
restate the representations and warranties set forth in this Agreement as of the
Closing Date (each, a "Reconstitution Date") or make the representations and
warranties set forth in the related selling/servicing guide of the master
servicer or issuer, as the case may be, in connection with such Reconstitution.
The Seller shall use its reasonable best efforts to provide to such master
servicer or issuer, as the case may be, and any other participants in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller or the
Originator as are reasonably believed necessary by the Purchaser or any such
other participant; and (iii) to execute, deliver and satisfy all conditions set
forth in any indemnity agreement required by the Purchaser or any such
participant. The Seller shall indemnify the Purchaser, each Affiliate designated
by the Purchaser and each Person who controls the Purchaser or such Affiliate
and hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that each of them may sustain
in any way related to any information provided by or on behalf of the Seller or
the Originator regarding the Seller, the Originator, the Seller's and
Originator's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement. Moreover, the Seller agrees to cooperate with all reasonable requests
made by the Purchaser to effect such Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Originator hold record title to the Mortgages, prior to the Reconstitution Date,
the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Originator, as applicable, acceptable to the prospective purchaser or trustee,
as applicable, for each Mortgage Loan that is part of the Reconstitution and
shall pay all preparation and recording costs associated therewith. In
connection with the Reconstitution, the Seller shall execute or shall cause the
Originator to execute each assignment of mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute or shall cause the
Originator to execute, at the direction of the Purchaser, any note endorsement
in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Servicing
Agreement shall remain in effect with respect to the related Mortgage Loan
Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Servicing Agreement and with respect thereto this Agreement
shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and the Successor Servicer
and hold such parties harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that such parties may
sustain in any way related to the failure of the Seller to perform its duties
and the Originator to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13. The Seller immediately shall notify the Purchaser if a claim is made
by a third party with respect to this Agreement or any Reconstitution Agreement
or the Mortgage Loans, assume (with the prior written consent of the Purchaser)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or the Purchaser in respect of such
claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9, or is in
any way related to the failure of the Originator or the Seller to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. The Seller hereby grants to the Purchaser a
lien on and a continuing security interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the consent of the Purchaser. This Agreement may
be assigned, pledged or hypothecated by the Purchaser without the consent of the
Seller. In the event the Purchaser assigns this Agreement, and the assignee
assumes any of the Purchaser's obligations hereunder, the Seller acknowledges
and agrees to look solely to such assignee, and not to the Purchaser, for
performance of the obligations so assumed and the Purchaser shall be relieved
from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the related Closing Date and the Seller shall take no action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Seller or any affiliate of the Seller
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
NC CAPITAL CORPORATION
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Second Amended and Restated Mortgage Loan Purchase
and Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power certified by
the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in clause (iv)
above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
Exhibit B
EXHIBIT B
[RESERVED]
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________ [COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver the Second Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of
_______ __, 200_, by and between Xxxxxx Xxxxxxx Mortgage Capital Inc. (the
"Purchaser") and the Company (the "Purchase Agreement"), [and to endorse
the Mortgage Notes and execute the Assignments of Mortgages by original
[or facsimile] signature], and such resolutions are in effect on the date
hereof and have been in effect without amendment, waiver, rescission or
modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement,, [the sale of the mortgage loans] or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter or by-laws of the Company or,
to the best of my knowledge, the terms of any indenture or other agreement
or instrument to which the Company is a party or by which it is bound or
to which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement, or the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Purchase Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: By:
-------------------- ---------------------------
Name:
-------------------------
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
-------------------- ---------------------------
Name:
-------------------------
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser"), dated as of
_________ __, 200_ (the "Agreement") which sale is in the form of whole loans.
Capitalized terms not otherwise defined herein have the meanings set forth in
the Purchase Agreement and the Servicing Agreement.
[We] [I] have examined the following documents:
1. the Agreement;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company and the
Originator contained in the Agreement. [We] [I] have assumed the authenticity of
all documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company and the Originator are [type of entity] duly
organized, validly existing and in good standing under the
laws of the [United States] and are qualified to transact
business in, and is in good standing under, the laws of [the
state of incorporation].
2. Each of the Company and the Originator has the power to engage
in the transactions contemplated by the Agreement and all
requisite power, authority and legal right to execute and
deliver the Agreement and to perform and observe the terms and
conditions of the Agreement.
3. The Agreement has been duly authorized, executed and delivered
by the Company and the Originator, as applicable, and is a
legal, valid and binding agreement enforceable in accordance
with its terms against the Company and the Originator, as
applicable, subject to bankruptcy laws and other similar laws
of general application affecting rights of creditors and
subject to the application of the rules of equity, including
those respecting the availability of specific performance,
none of which will materially interfere with the realization
of the benefits provided thereunder or with the Purchaser's
ownership of the Mortgage Loans.
4. Each of the Company and the Originator has been duly
authorized to allow any of its officers to execute any and all
documents by original signature in order to complete the
transactions contemplated by the Agreement.
[5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company].
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company or the
Originator of or compliance by the Company or the Originator
with the Agreement and the sale of the Mortgage Loans by the
Company or the consummation of the transactions contemplated
by the Agreement or (ii) any required consent, approval,
authorization or order has been obtained by the Company or the
Originator.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreement conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company or the Originator, as applicable,
or, to the best of my knowledge, the material terms of any
indenture or other agreement or instrument to which the
Company or the Originator is a party or by which it is bound
or to which it is subject, or violates any statute or order,
rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company
or the Originator is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company or the Originator which, in [our] [my] judgment,
either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations,
financial condition, properties or assets of the Company or
the Originator or in any material impairment of the right or
ability of the Company or the Originator to carry on its
business substantially as now conducted or in any material
liability on the part of the Company or the Originator or
which would draw into question the validity of the Agreement
or the Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company or the Originator to perform under the terms of the
Agreement.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreement, is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
Except as otherwise set forth in the Agreement, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
--------------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______ (the "Association")]
---------------------------
---------------------------
---------------------------
Attention:
---------------------------
---------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________ [COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell to Xxxxxx Xxxxxxx Mortgage
Capital Inc. under the Second Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of ______ __, 200_, certain mortgage loans
originated by the Association. The Company warrants that the mortgage loans to
be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond
any collateral required to secure advances made by the Association to the
Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
--------------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Date:
---------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
--------------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Date:
---------------------------
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Second Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __,
200_, and certifies that all notes, mortgages, assignments and other documents
in its possession relating to such Mortgage Loans have been delivered and
released to the Company or its designees, as of the date and time of the sale of
such Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. Such release shall
be effective automatically without any further action by any party upon payment
in one or more installments, in immediately available funds, of $_____________,
in accordance with the wire instructions set forth below.
Name and Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
By:
-----------------------------
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
--------------------------------
By:
-----------------------------
Title:
--------------------------
Date:
---------------------------
Exhibit G
EXHIBIT G
UNDERWRITING GUIDELINES
Exhibit H
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of __________, ____, ___________________ NC Capital
Corporation ("Seller"), as the Seller under (i) that certain Purchase Price and
Terms Agreement, dated as of ___________, _____ (the "PPTA"), and (ii) that
certain Second Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of ________, ____ (the "Purchase Agreement"), does hereby
sell, transfer, assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital
Inc. ("Purchaser") as the Purchaser under the Agreements (as defined below),
without recourse, but subject to the terms of the Agreements, all right, title
and interest of, in and to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as Exhibit A (the "Mortgage Loans"), together with the
Servicing Rights, and the Mortgage Files and all rights and obligations arising
under the documents contained therein. Each Mortgage Loan subject to the
Agreements was underwritten in accordance with, and conforms to, the
Underwriting Guidelines attached hereto as Exhibit C. Pursuant to Section 6 of
the Purchase Agreement, the Seller has delivered to the Custodian the documents
for each Mortgage Loan to be purchased as set forth in the Purchase Agreement.
The contents of each Servicing File required to be retained by
______________________ ("Servicer"), as Originator/Servicer under that certain
Servicing Agreement, dated as of ________, ____ (the "Servicing Agreement") to
service the Mortgage Loans pursuant to the Servicing Agreement and thus not
delivered to the Purchaser are and shall be held in trust by the Servicer for
the benefit of the Purchaser as the owner thereof. The Servicer's possession of
any portion of the Servicing File is at the will of the Purchaser for the sole
purpose of facilitating servicing of the related Mortgage Loan pursuant to the
Servicing Agreement, and such retention and possession by the Servicer shall be
in a custodial capacity only. The ownership of each Mortgage Note, Mortgage, the
Servicing Rights and the contents of the Mortgage File and Servicing File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or which come into the
possession of the Seller or the Servicer shall immediately vest in the Purchaser
and shall be retained and maintained, in trust, by the Seller at the will of the
Purchaser in such custodial capacity only. The PPTA, the Purchase Agreement and
the Servicing Agreement shall collectively be referred to as the "Agreements"
herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
[SELLER]
By:
-----------------------------
Name:
--------------------------
Title:
--------------------------
[SERVICER]
By:
-----------------------------
Name:
--------------------------
Title:
--------------------------
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
-----------------------------
Name:
--------------------------
Title:
--------------------------
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on
the related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than
$_________; (2) an origination date earlier than __ months prior to the related
Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO Score of less than
___; or (5) a debt-to-income ratio of more than __%. Each Mortgage Loan has a
Mortgage Interest Rate of at least ___% per annum and an outstanding principal
balance less than $_________. Each Adjustable Rate Mortgage Loan has an Index of
[_______].
EXECUTION COPY
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXECUTION COPY
AMENDMENT NO. 1
AMENDMENT NO. 1, dated as of October 22, 2003 ("Amendment"), to the
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of July 1, 2003 (the "Purchase Agreement"), each between XXXXXX XXXXXXX
MORTGAGE CAPITAL INC., a New York corporation ("Xxxxxx Xxxxxxx"), and NC CAPITAL
CORPORATION, a California corporation ("NCCC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
(a) Section 1 is hereby amended by deleting the definition of the
term "High Cost Loan" in its entirety and replacing it with the following:
"A Mortgage Loan classified as (a) a "high cost" loan under the Home
Ownership and Equity Protection Act of 1994 or (b) a "high cost
home," "threshold," "covered," "high risk home," "predatory" or
similar loan under any other applicable state, federal or local law
(or a similarly 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 and/or fees)."
(b) Subsection 9.02(eee) is hereby amended by deleting such
subsection in its entirety.
(c) Subsection 9.02(fff) is hereby amended by renumbering such
subsection as 9.02(eee).
(d) Subsection 9.03 is hereby amended by deleting the reference to
(fff) in the second sentence of the second paragraph in its entirety.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
NC CAPITAL CORPORATION
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 2
AMENDMENT NO. 2, dated as of December 30, 2003 ("Amendment"), to the
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of July 1, 2003, as amended by Amendment No. 1, dated as of October 22,
2003 (the "Purchase Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL
INC., a New York corporation ("Xxxxxx Xxxxxxx"), and NC CAPITAL CORPORATION, a
California corporation ("NCCC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
(i) Section 1 is hereby amended by deleting the definition of the
term "Mortgage Loan Schedule" in its entirety and replacing it with the
following:
"The schedule of Mortgage Loans setting forth the following
information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) a
code indicating whether the Mortgagor is self-employed; (5) a code
indicating whether the Mortgaged Property is owner-occupied; (6) the
number and type of residential units constituting the Mortgaged
Property; (7) the original months to maturity or the remaining
months to maturity from the related Cut-off Date, in any case based
on the original amortization schedule and, if different, the
maturity expressed in the same manner but based on the actual
amortization schedule; (8) with respect to each First Lien Loan, the
Loan-to-Value Ratio at origination, and with respect to each Second
Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly
Payment was due on the Mortgage Loan and, if such date is not
consistent with the Due Date currently in effect, such Due Date;
(11) the stated maturity date; (12) the first payment date; (13) the
amount of the Monthly Payment as of the related Cut-off Date; (14)
the last payment date on which a payment was actually applied to the
outstanding principal balance; (15) the original principal amount of
the Mortgage Loan; (16) the principal balance of the Mortgage Loan
as of the close of business on the related Cut-off Date, after
deduction of payments of principal due and collected on or before
the related Cut-off Date; (17) with respect to each Second Lien Loan
and First Lien Loan with a second lien behind it, the combined
principal balance of the Mortgage Loan as of the close of business
on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date;
(18) a code indicating whether there is a simultaneous second; (19)
delinquency status as of the related Cut-off Date; (20) with respect
to each Adjustable Rate Mortgage Loan, the Interest Rate Adjustment
Date; (21) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (22) with respect to each Adjustable Rate Mortgage
Loan , the Lifetime Rate Cap under the terms of the Mortgage Note;
(23) with respect to each Adjustable Rate Mortgage Loan, a code
indicating the type of Index; (24) the type of Mortgage Loan (i.e.,
Fixed Rate or Adjustable Rate Mortgage Loan, First or Second Lien
Loan); (25) a code indicating the purpose of the loan (i.e.,
purchase, rate and term refinance, equity take-out refinance); (26)
a code indicating the documentation style (i.e., full, alternative
or reduced); (27) the loan credit classification (as described in
the Underwriting Guidelines); (28) whether such Mortgage Loan
provides for a prepayment penalty and, if applicable, the prepayment
penalty period; (29) the Mortgage Interest Rate as of origination;
(30) the credit risk score (FICO score); (31) the date of
origination; (32) with respect to each Adjustable Rate Mortgage
Loan, the Mortgage Interest Rate adjustment period; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate adjustment percentage; (34) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate floor; (35) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (36) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Rate Cap
subsequent to the first Interest Rate Adjustment Date; (37) a code
indicating whether the Mortgage Loan is a High Cost Loan; (38) a
code indicating whether the Mortgage Loan is a Balloon Mortgage
Loan; (39) the Due Date for the first Monthly Payment; (40) the
original Monthly Payment due; (41) with respect to the related
Mortgagor, the debt-to-income ratio; (42) sales price; (43)
Appraised Value; (44) appraisal type; and (45) appraisal date. With
respect to the Mortgage Loans in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans; (4) the weighted average maturity of the Mortgage
Loans; (5) the applicable Cut-off Date; and (6) the applicable
Closing Date."
(ii) Subsection 9.01(s) is hereby amended by adding the following
sentence to the end of such clause:
"Additionally, the Seller shall cause the Originator, as servicer,
to transmit full-file credit reporting data for each Mortgage Loan pursuant to
Xxxxxx Xxx Guide Announcement 95-19 and that for each Mortgage Loan, the Seller
shall cause the Originator, as servicer, to report one of the following statuses
each month as follows: new origination, current, delinquent (30-, 60-, 90-days,
etc.), foreclosed, or charged-off."
(iii) Subsection 9.02(g) is hereby amended by deleting the
representation in its entirety and replacing it with the following:
"Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;"
(iv) Subsection 9.02(k) is hereby amended by adding the following
language immediately following the word "terms" and prior to the "." at the end
of the first sentence:
"(including, without limitation, any provisions therein relating to
prepayment penalties)"
(v) Subsection 9.02(ddd) is hereby amended by deleting the "and"
from the end of such subsection.
(vi) Subsection 9.02 is hereby amended by adding each of the
following representations to the end of such Subsection following Subsection
(eee):
"(fff) Each Mortgage Loan is in compliance with the anti-predatory
lending eligibility for purchase requirements of the Xxxxxx Xxx Guides;
(ggg) No Mortgagor was 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 mortgagors, unless at the time of the
Mortgage Loan's origination, such Mortgagor did not qualify taking into account
credit history and debt-to-income ratios for a lower-cost credit product then
offered by the Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator. If, at the time of loan application, the Mortgagor may have
qualified for a lower-cost credit product then offered by any mortgage lending
affiliate of the Mortgage Loan's originator, the Mortgage Loan's originator
referred the related Mortgagor's application to such affiliate for underwriting
consideration;
(hhh) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs objective mathematical principles which relate
the related Mortgagor's income, assets and liabilities to the proposed payment
and such underwriting methodology does not rely on the extent of the related
Mortgagor'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 (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan;
(iii) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity: (i)
prior to the Mortgage Loan's origination, the related Mortgagor agreed to such
premium in exchange for a monetary benefit, including but not limited to a rate
or fee reduction, (ii) prior to the Mortgage Loan's origination, the related
Mortgagor was offered the option of obtaining a mortgage loan that did not
require payment of such a premium, (iii) the prepayment premium is disclosed to
the related Mortgagor in the Mortgage Loan documents pursuant to applicable
state and federal law, and (iv) notwithstanding any state or federal law to the
contrary, the Seller, as servicer shall not impose such prepayment premium in
any instance when the mortgage debt is accelerated as the result of the related
Mortgagor's default in making the Mortgage Loan payments;
(jjj) No Mortgagor was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No Mortgagor obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan. 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, such Mortgage Loan;
(kkk) All points and fees related to each Mortgage Loan were
disclosed in writing to the Mortgagor in accordance with applicable state and
federal law and regulation. Except in the case of a Mortgage Loan in an original
principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no Mortgagor was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such
Mortgage Loan, such 5% limitation is calculated in accordance with Fannie Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Xxx Guides; and
(lll) All fees and charges (including finance charges), whether or
not financed, assessed, collected or to be collected in connection with the
origination and servicing of each Mortgage Loan, have been disclosed in writing
to the Mortgagor in accordance with applicable state and federal law and
regulation."
(vii) Subsection 9.03 is hereby amended by adding references to
clauses (fff), (ggg), (hhh), (iii), (jjj), (kkk) and (lll) following the
reference to clause (eee) in the second sentence of the second paragraph.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
NC CAPITAL CORPORATION
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 3
AMENDMENT NO. 3, dated as of January 29, 2004 ("Amendment"), to the
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of July 1, 2003, as amended by Amendment No. 1, dated as of October 22,
2003, and Amendment No. 2, dated as of December 30, 2003 (the "Purchase
Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a New York
corporation ("Xxxxxx Xxxxxxx"), and NC CAPITAL CORPORATION, a California
corporation ("NCCC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
Section 1 is hereby amended by adding the following language to the
end of the definition of the term "High Cost Loan":
"For avoidance of doubt, the parties agree that this definition
shall apply to any law regardless of whether such law is presently,
or in the future becomes, the subject of judicial review or
litigation."
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
NC CAPITAL CORPORATION
By:
--------------------------------------
Name:
Title:
AMENDMENT NO. 4
AMENDMENT NO. 4, dated as of March 30, 2004 ("Amendment"), to the
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of July 1, 2003, as amended by Amendment No. 1, dated as of October 22,
2003, Amendment No. 2, dated as of December 30, 2003, and Amendment No. 3, dated
as of January 29, 2004 (the "Purchase Agreement"), each between XXXXXX XXXXXXX
MORTGAGE CAPITAL INC., a New York corporation ("Xxxxxx Xxxxxxx"), and NC CAPITAL
CORPORATION, a California corporation ("NCCC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
(i) Subsection 9.02(kkk) is hereby amended by deleting the "and"
from the end of such subsection.
(ii) Subsection 9.02 is hereby amended by adding the following
representation to the end of such Subsection following Subsection (lll):
"(mmm) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction."
(iii) Subsection 9.03 is hereby amended by adding references to
clause (mmm), following the reference to clause (lll) in the second sentence of
the second paragraph.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
NC CAPITAL CORPORATION
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 5
AMENDMENT NO. 5, dated as of June 28, 2004 ("Amendment"), to the
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of July 1, 2003, as amended by Amendment No. 1, dated as of October 22,
2003, Amendment No. 2, dated as of December 30, 2003, Amendment No. 3, dated as
of January 29, 2004, and Amendment No. 4, dated as of March 30, 2004 (the
"Purchase Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a New
York corporation ("Xxxxxx Xxxxxxx"), and NC CAPITAL CORPORATION, a California
corporation ("NCCC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
(i) Section 1 is hereby amended by:
(a) inserting the following defined terms in alphabetical order
therein:
"Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary."
"Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary."
"Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.."
(b) adding the following language to the end of the definition of
"High Cost Loan" following the words "and/or fees)" and prior to the ".":
"or (c) a Mortgage Loan categorized as High Cost pursuant to
Appendix E of Standard & Poor's Glossary"
(c) deleting the "and" prior to the "(35)" in the definition of
"Mortgage Loan Schedule" and adding the following language immediately following
the reference to "debt-to-income ratio" and prior to the "." in clause (35) of
such definition:
"and (36) a code indicating whether the Mortgage Loan is a Home
Loan"
(ii) Subsection 9.02 is hereby amended by:
(a) adding the following language to the end of the first sentence
of clause (aaa) following the word "Loan" and prior to the ".":
"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"
(b) deleting clause (ddd) and replacing it with "[Reserved];"
(iii) Subsection 9.03 is hereby amended by deleting the reference to
"(ddd)," in the second sentence of the second paragraph.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
NC CAPITAL CORPORATION
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 6
AMENDMENT NO. 6, dated as of January 28, 2005 ("Amendment"), to the
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of July 1, 2003, as amended by Amendment No. 1, dated as of October 22,
2003, Amendment No. 2, dated as of December 30, 2003, Amendment No. 3, dated as
of January 29, 2004, Amendment No. 4, dated as of March 30, 2004 and Amendment
No. 5, dated as of June 28, 2004 (the "Purchase Agreement"), each between XXXXXX
XXXXXXX MORTGAGE CAPITAL INC., a New York corporation ("Xxxxxx Xxxxxxx"), and NC
CAPITAL CORPORATION, a California corporation ("NCCC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
a. Section 9.02(dd) is hereby amended by deleting the
following langauge:
"to the best of the Seller's knowledge,"
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
NC CAPITAL CORPORATION
By:
--------------------------------------
Name:
Title:
EXHIBIT Q
ACCREDITED PURCHASE AGREEMENT
EXECUTION COPY
================================================================================
THIRD AMENDED AND RESTATED MORTGAGE LOAN
PURCHASE AND WARRANTIES AGREEMENT
-------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
ACCREDITED HOME LENDERS, INC.,
Seller
-------------------
Dated as of February 1, 2004
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files...........................................
Subsection 6.02 Books and Records......................................
Subsection 6.03 Delivery of Mortgage Loan Documents....................
Subsection 6.04 Quality Control Procedures.............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
Subsection 9.01 Representations and Warranties Regarding the
Seller....................................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans.................................
Subsection 9.03 Remedies for Breach of Representations and
Warranties................................................
Subsection 9.04 [RESERVED].............................................
Subsection 9.05 Mortgage Loans with First Payment Defaults;
Repurchase................................................
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay
in Full...................................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims..............................................
Subsection 14.02 Merger or Consolidation of the Seller..................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY...........................................
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 32. CONFIDENTIALITY..............................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT J FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
THIRD AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
This THIRD AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of February 1, 2004, by and
between Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York corporation, having an
office at 0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Purchaser"), and Accredited Home Lenders, Inc., a California corporation,
having an office at 00000 Xxxxxx xx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx
00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of July 1, 2003, as amended by Amendment No. 1, dated as of September
23, 2003, Amendment No. 2, dated as of December 15, 2003, and Amendment No. 3,
dated as of January 15, 2004 (the "Original Purchase Agreement"), pursuant to
which the Seller may sell, from time to time, to the Purchaser, and the
Purchaser may purchase, from time to time, from the Seller, certain conventional
adjustable and fixed rate B/C, residential first mortgage loans (the "Mortgage
Loans") on a servicing released basis as described therein, and which shall be
delivered in pools of whole loans (each, a "Mortgage Loan Package") on various
dates as provided therein (each, a "Closing Date"); and
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend the Original Purchase Agreement to make certain modifications as set forth
herein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below. Other capitalized terms used in
this Agreement and not defined herein shall have the respective meanings set
forth in the Interim Servicing Agreement.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Xxx Transfer or a Freddie Mac Transfer.
Agreement: This Third Amended and Restated Mortgage Loan Purchase
and Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All late charges, assumption fees, escrow account
benefits, reinstatement fees and similar types of fees arising from or in
connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) the State in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The Custodial Agreement, dated as of the date
hereof, among the Seller, the Purchaser and the Custodian, which governs the
retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents.
Custodian: Deutsche Bank Trust Company Americas, or its successor in
interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan, the period commencing on the day immediately succeeding the Due Date for
such Mortgage Loan occurring in the month preceding the month of the Remittance
Date and ending on the next Due Date.
Equity Take-out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost
home," "threshold," "covered," "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law (or a similarly
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 and/or fees). For avoidance of doubt, the
parties agree that this definition shall apply to any law regardless of whether
such law is presently, or in the future becomes, the subject of judicial review
or litigation.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Interim Servicing Agreement: The Interim Servicing Agreement,
between Purchaser and Seller, as servicer, dated as of August 1, 2002, as
amended by Amendment No. 1, dated as of January 15, 2004, which agreement
provides for the Seller to service the Mortgage Loans for an interim period.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the Lifetime Rate Cap set forth as an amount per annum on the related
Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, or was made within 12 months following such acquisition, the
purchase price of the Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual, (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS(R)
System, and (c) the Seller has designated or will designate the Custodian as the
Custodian on the MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note; except that with respect to
real property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) the Loan-to-Value
Ratio at origination; (9) the Mortgage Interest Rate as of the related Cut-off
Date; (10) the date on which the Monthly Payment was due on the Mortgage Loan
and, if such date is not consistent with the Due Date currently in effect, such
Due Date; (11) the stated maturity date; (12) the first payment date; (13) the
amount of the Monthly Payment as of the related Cut-off Date; (14) the last
payment date as of which a payment was actually applied to the outstanding
principal balance; (15) the original principal amount of the Mortgage Loan; (16)
the principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (17) delinquency status as of the related
Cut-off Date; (18) with respect to each Adjustable Rate Mortgage Loan, the
Interest Rate Adjustment Date; (19) with respect to each Adjustable Rate
Mortgage Loan, the Gross Margin; (20) with respect to each Adjustable Rate
Mortgage Loan, the Lifetime Rate Cap under the terms of the Mortgage Note; (21)
with respect to Adjustable Rate Mortgage Loans, a code indicating the type of
Index; (22) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate); (23)
a code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (24) a code indicating the documentation
style (i.e., full, alternative or reduced); (25) asset verification (Y/N); (26)
the loan credit classification (as described in the Underwriting Guidelines);
(27) whether such Mortgage Loan provides for a prepayment penalty as well as the
terms of such prepayment penalty, if any; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a High Cost Loan; (39) a code indicating whether
the Mortgage Loan is a balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percent of coverage, if applicable; (43) Appraised
Value; (44) appraisal type; (45) automated valuation model (AVM); (46) appraisal
date; (47) with respect to the related Mortgagor, the debt-to-income ratio; (48)
in connection with a condominium unit, a code indicating whether the condominium
project where such unit is located is low-rise or high-rise; (49) with respect
to each MERS Designated Mortgage Loan, the MERS Identification Number; and (50)
a code indicating whether the Mortgage Loan does not comply with Subsection 9.02
(kkk). With respect to the Mortgage Loans in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the related Cut-off
Date: (1) the number of Mortgage Loans; (2) the current aggregate outstanding
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; (4) the weighted average maturity of the
Mortgage Loans; (5) the applicable Cut-off Date; and (6) the applicable Closing
Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement which does not contain a
provision pursuant to which the Mortgagor may convert the Adjustable Rate
Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Seller, will not or, in the case of a proposed advance, would not, be ultimately
recoverable from related Insurance Proceeds, Liquidation Proceeds or otherwise.
The determination by the Seller that it has made a Nonrecoverable Advance or
that any proposed advance of principal and interest, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers' Certificate delivered
to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President
(including Assistant Vice Presidents) and by the Treasurer or the Secretary or
one of the Assistant Treasurers or Assistant Secretaries of the Seller, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price Percentage: As defined in the related Purchase Price
and Terms Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its successor in
interest or assigns or any successor to the Purchaser under this Agreement as
herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller, who
had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation was not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfied the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Xxx and Freddie Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance (or such other rating as may be required by a Rating
Agency in connection with a Securitization Transfer in order to achieve the
desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Index and lien
priority); and (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a trust and servicing agreement, pooling and servicing agreement
and/or seller/servicer agreements and related custodial/trust agreement and
documents with respect to a Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, and any other comparable state statute.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly issued or
privately placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Accredited Home Lenders, Inc., its successors in interest
and assigns.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Seller under the Interim Servicing Agreement. The obligation of the Purchaser to
pay the Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of such Monthly
Payment collected by the Seller, or as otherwise provided under this Agreement.
Servicing Fee Rate: 50 basis points (0.50%) per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Interim Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Seller
(which take into account the exception policies set forth therein), a copy of
which is attached hereto as Exhibit G and a then-current copy of which shall be
attached as an exhibit to the related Assignment and Conveyance.
Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller is obligated to deliver those Mortgage Loans funded by
the Seller pursuant to the original terms of the Seller's commitment to the
mortgagor. The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least two (2) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which are not being purchased by the Purchaser deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans, after application of
scheduled payments of principal due on or before the related Cut-off Date, to
the extent such payments were actually received. The initial principal amount of
the Mortgage Loans shall be the aggregate principal balance of the Mortgage
Loans, so computed as of the related Cut-off Date. If so provided in the related
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage pertaining to each
Mortgage Loan (except with respect to each MERS Designated Mortgage Loan), or
(b) make the related Mortgage File available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans are unacceptable to the Purchaser for any
reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein;
provided, however, that the Purchaser may not demand repurchase, substitution or
other relief on the basis that a Mortgage Loan examined by the Purchaser or its
designee prior to purchase does not comply with the Underwriting Guidelines
provided by the Seller to the Purchaser prior to such examination and attached
as an exhibit hereto.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by it
pursuant to this Agreement to be appropriately identified in its computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. The Seller shall release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement or the Interim Servicing Agreement, except when such release
is required in connection with a repurchase of any such Mortgage Loan pursuant
to Subsection 9.03.
Subsection 6.02. Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller. Notwithstanding the foregoing, each Mortgage and
related Mortgage Note shall be possessed solely by the Purchaser or the
appropriate designee of the Purchaser, as the case may be. All rights arising
out of the Mortgage Loans including, but not limited to, all funds received by
the Seller after the related Cut-off Date on or in connection with a Mortgage
Loan shall be vested in the Purchaser or one or more designees of the Purchaser;
provided, however, that all funds received on or in connection with a Mortgage
Loan shall be received and held by the Seller in trust for the benefit of the
Purchaser or the appropriate designee of the Purchaser, as the case may be, as
the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and applicable requirements of Xxxxxx Xxx or Freddie Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and periodic inspection reports, as required by the Xxxxxx Xxx Guides, if
applicable. To the extent that original documents are not required for purposes
of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Seller may be in the form of microfilm or microfiche so long
as the Seller complies with the requirements of the Xxxxxx Xxx Guides, if
applicable.
Subsection 6.03. Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
three (3) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04. Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
shall include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Seller. The program is to ensure
that the Mortgage Loans are originated and serviced in accordance with Accepted
Servicing Standards and the Underwriting Guidelines; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified therein). The
Purchaser and Seller shall execute the Interim Servicing Agreement on the
Closing Date. Pursuant to the Interim Servicing Agreement, the Seller shall
begin servicing the Mortgage Loans on behalf of the Purchaser and shall be
entitled to a Servicing Fee with respect to each Mortgage Loan from the related
Closing Date until the termination of the Interim Servicing Agreement with
respect to such Mortgage Loan as set forth therein.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to the related Mortgage Loans. The
Transfer Date shall be the date determined in accordance with Section 6.03 of
the Interim Servicing Agreement (with respect to each Mortgage Loan, for an
interim period, as specified therein).
On or prior to the applicable Transfer Date, or as otherwise
specified below, the Seller shall, at its sole cost and expense, take such steps
as may be necessary or appropriate to effectuate and evidence the transfer of
the servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser with copies of
all such related notices within five (5) Business Days following the Transfer
Date;
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Purchaser, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Purchaser from and after the Transfer
Date. The Seller shall provide the Purchaser with copies of all such notices
within five (5) Business Days following the Transfer Date;
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Seller's possession relating to each related Mortgage Loan including the
information enumerated in the Interim Servicing Agreement (with respect to each
such Mortgage Loan, for an interim period, as specified therein);
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Seller;
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the Transfer Date;
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller on each related Mortgage Loan
shall be properly applied by the Seller to the account of the particular
Mortgagor;
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail within one (1) Business
Day following the date of receipt. The Seller shall notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied if
the Seller forwards with its payment sufficient information to permit
appropriate processing of the payment by the Purchaser. The Seller shall assume
full responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Seller after the Transfer Date with respect to
related Mortgage Loans then in foreclosure or bankruptcy; provided, for purposes
of this Agreement, necessary and appropriate legal application of such Monthly
Payments shall include, but not be limited to, endorsement of a Monthly Payment
to the Purchaser with the particulars of the payment such as the account number,
dollar amount, date received and any special Mortgagor application instructions
and the Seller shall comply with the foregoing requirements with respect to all
Monthly Payments received by the it after the Transfer Date;
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered after
the Transfer Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall reimburse the Purchaser for the amount of such shortage within
thirty (30) days after receipt of written demand therefor from the
Purchaser;
(iv) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(v) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments;
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements as set forth in this
Agreement;
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate;
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed on or before the Transfer Date in
relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph; and
(l) MERS. With respect to each MERS Designated Mortgage Loan, the
Seller shall, on or before the Transfer Date, designate, as directed by the
Purchaser, the Purchaser, or its designee, as the Servicer on the MERS(R)
System. In addition, the Seller shall promptly take all other actions reasonably
requested by Purchaser with respect to MERS Designated Mortgage Loans and the
MERS(R) System to effectuate and evidence the transfer of servicing in
accordance with the terms of this Agreement and the Interim Servicing Agreement.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01. Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing of
such Mortgage Loan in accordance with the terms of this Agreement and the
Interim Servicing Agreement; the Seller has the full corporate power, authority
and legal right to hold, transfer and convey the Mortgage Loans and to execute
and deliver this Agreement and to perform its obligations hereunder and
thereunder; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law, but
subject to bankruptcy laws and general principles of equity; and all requisite
corporate or other action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Seller's charter, by-laws or other organizational documents or any legal
restriction or any agreement or instrument to which the Seller is now a party or
by which it is bound, or constitute a default or result in an acceleration under
any of the foregoing, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its property is subject, or
result in the creation or imposition of any lien, charge or encumbrance that
would have an adverse effect upon any of its properties pursuant to the terms of
any mortgage, contract, deed of trust or other instrument, or impair the ability
of the Purchaser to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this Agreement;
(d) Ability to Service. Seller has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans. The Seller is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable, and
is in good standing to enforce, originate, sell mortgage loans to, and service
mortgage loans in each jurisdiction wherein the Mortgaged Properties are
located;
(e) Reasonable Servicing Fee. The Seller acknowledges and agrees
that the Servicing Fee, represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Seller, for
accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement and the Interim
Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Litigation Pending. Except as previously identified by the
Seller to the Purchaser in writing, there is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the Department of Veterans Affairs is
required for the execution, delivery and performance by the Seller of or
compliance by the Seller with this Agreement or the Mortgage Loans, the delivery
of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage
Loans or the consummation of the transactions contemplated by this Agreement, or
if required, such approval has been or will be obtained prior to the date
required by federal, state or local law;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not intentionally
made in a manner so as to affect adversely the interests of the Purchaser;
(j) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(l) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. In addition, the Seller has delivered information as to its loan
gain and loss experience in respect of foreclosures and its loan delinquency
experience for the immediately preceding three-year period, in each case with
respect to mortgage loans owned by it and such mortgage loans serviced for
others during such period, and all such information so delivered shall be true
and correct in all material respects. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. The
Seller has completed any forms requested by the Purchaser in a timely manner and
in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, and upon the sale
of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan; and
(q) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Xxxxxx's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated.
Subsection 9.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was funded;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Xxxxxx Xxx and Freddie Mac, as well as all additional requirements set forth in
Section 2.10 of the Interim Servicing Agreement. If required by the National
Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to Xxxxxx
Xxx and Freddie Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Xxxxxxxxx's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the purchase of the Mortgage Loan as contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the related Mortgage
Loan Schedule, except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the Mortgaged Property may be a leasehold estate,
and consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development and that no residence or dwelling is a mobile home;
provided, however, that any condominium unit or planned unit development shall
not fall within any of the "Ineligible Projects" of part XII, Section 102 of the
Xxxxxx Xxx Selling Guide and shall conform with the Underwriting Guidelines. In
the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loans"), (i) such Manufactured Home Mortgage Loan
conforms with the applicable Xxxxxx Xxx or Freddie Mac requirements regarding
mortgage loans related to manufactured dwellings, (ii) the related manufactured
dwelling is permanently affixed to the land, (iii) the related manufactured
dwelling and the related land are subject to a Mortgage properly filed in the
appropriate public recording office and naming Seller as mortgagee, (iv) the
applicable laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged Property
to be a part of the real property on which such dwelling is located, and (v)
such Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section
860G(a)(3) of the Internal Revenue Code of 1986, as amended, and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes;
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and the Seller has full right to sell
and assign the same to the Purchaser. As used in this Subsection 9.02,
"enforceable" shall be deemed to be subject to bankruptcy laws and general
principles of equity;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any Person, including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan. The Seller has reviewed
all of the documents constituting the Servicing File and has made such inquiries
as it deems necessary to make and confirm the accuracy of the representations
set forth herein;
(l) Full Disbursement of Proceeds. Except to the extent the Mortgage
Loan is subject to completion escrows which have been disclosed to and
acknowledged by the Purchaser and which meet the requirements of the
Underwriting Guidelines, and as to which a completed Xxxxxx Xxx form 442 has
been delivered to the Purchaser within sixty (60) days after the related Closing
Date, the Mortgage Loan has been closed and the proceeds of the Mortgage Loan
have been fully disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor
is not entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. Upon
payment of the Purchase Price, the Mortgage Loan is not assigned or pledged, and
the Seller has good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan had an LTV at origination greater than
100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Freddie Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Xxx or Freddie Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan (or to the
extent a Mortgage Note provides for negative amortization, the maximum amount of
negative amortization in accordance with the Mortgage), subject only to the
exceptions contained in clauses (i) and (ii) of paragraph (j) of this Subsection
9.02, and in the case of Adjustable Rate Mortgage Loans, against any loss by
reason of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the purchase of the
Mortgage Loan as contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. Except as insured against by the related
title insurance, there are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
the law could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
are required to commence no more than sixty days after funds were disbursed in
connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Cap, are as set forth on the related Mortgage
Loan Schedule. Except with respect to a "balloon" Mortgage Loan, the Mortgage
Note is payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgage Loan is payable on the first day of each month. There are no
Convertible Mortgage Loans which contain a provision allowing the Mortgagor to
convert the Mortgage Note from an adjustable interest rate Mortgage Note to a
fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Xxxxxx
Xxx and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is capable of being lawfully occupied under
applicable law. 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 but not limited to
certificates of occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, the Mortgage File or the Mortgagor's credit standing,
other than the subprime nature of such credit standing, that can reasonably be
expected to cause private institutional investors who invest in mortgage loans
similar to the Mortgage Loan, to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan, or cause the Mortgage Loans to
prepay during any period materially faster or slower than the mortgage loans
originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated Mortgage Loans, the Assignment of Mortgage with respect to each
Mortgage Loan is in recordable form and is acceptable for recording under the
laws of the jurisdiction in which the Mortgaged Property is located. The
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller are not subject to the bulk transfer or similar statutory provisions
in effect in any applicable jurisdiction;
(dd) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision (subject to applicable law) for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder, and to the best of the
Seller's knowledge, such provision is enforceable;
(ee) [Reserved];
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Xxx and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and, if requested by the Mortgagor,
has been established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Seller executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue. To the best of Seller's
knowledge, based upon customary and prudent residential mortgage industry
underwriting standards, there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property, and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or any similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Xxxxxx Xxx or Freddie Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed one or more
statements to the effect that the Mortgagor has received all disclosure
materials required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans. The Seller shall maintain such
statement(s) in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded by the terms of
the Mortgage Loan Documents from furnishing the same to any subsequent or
prospective purchaser of such Mortgage. The Seller shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information in connection
with the Purchaser's secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the collateral assignment of the lease without the lessor's
consent (or such consent has been obtained) and the acquisition by the holder of
the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu
of foreclosure or provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the termination
thereof upon the lessee's default without the holder of the Mortgage being
entitled to receive written notice of, and opportunity to cure, such default,
(b) allow the termination of the lease in the event of damage or destruction as
long as the Mortgage is in existence, (c) prohibit the holder of the Mortgage
from being insured (or receiving proceeds of insurance) under the hazard
insurance policy or policies relating to the Mortgaged Property or (d) permit
any increase in rent other than pre-established increases set forth in the
lease; (4) the original term of such lease is not less than 15 years; (5) the
term of such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring ownership in
residential properties is a widely accepted practice;
(ww) Prepayment Penalty. (i) Each Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note, except as set forth
on the related Mortgage Loan Schedule, and (ii) no such prepayment penalty may
be imposed for a term in excess of five (5) years from the date of origination;
(xx) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan. No Mortgage Loan is covered by the Home Ownership and Equity Protection
Act of 1994 and no Mortgage Loan is in violation of any comparable state or
local law;
(yy) Single-premium credit life insurance policy. In connection with
the origination of the Mortgage Loan, no proceeds from such Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy;
(zz) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws");
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service or another issuer reasonably acceptable to the Purchaser, and such
contract is transferable;
(ccc) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with respect to
each MERS Designated Mortgage Loan;
(ddd) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim Funder on
the MERS(R) System;
(eee) Georgia Fair Lending Act. There is no Mortgage Loan that was
originated on or after October 1, 2002 and on or prior to March 7, 2003, which
is secured by property located in the State of Georgia. There is no Mortgage
Loan that was originated after March 7, 2003, which is a "high-cost home loan"
as defined under the Georgia Fair Lending Act;
(fff) Fair Credit Reporting Act. The Seller has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis;
(ggg) Mortgagor Selection. No Mortgagor was 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 mortgagors, unless
at the time of the Mortgage Loan's origination, such Mortgagor did not qualify
taking into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Mortgage Loan's originator or any affiliate
of the Mortgage Loan's originator. If, at the time of loan application, the
Mortgagor may have qualified for a lower-cost credit product then offered by any
mortgage lending affiliate of the Mortgage Loan's originator, the Mortgage
Loan's originator referred the related Mortgagor's application to such affiliate
for underwriting consideration;
(hhh) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs, in part, objective
mathematical principles which relate the related Mortgagor's income, assets and
liabilities to the proposed payment and such underwriting methodology does not
rely on the extent of the related Mortgagor'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
(application/approval) the related Mortgagor had a reasonable ability to make
timely payments on the Mortgage Loan, relying on the Mortgagor's representation
of the Mortgagor's income in the case of loan programs which did not require
verification of the Mortgagor's income;
(iii) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) a mortgage loan without such a premium was
available to the Mortgagor at an interest rate and/or fee structure higher than
that of the Mortgage Loan, (ii) prior to the Mortgage Loan's funding, the
related Mortgagor had the option of obtaining the Mortgage Loan without a
requirement for payment of such a premium, and (iii) the prepayment premium is
disclosed to the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law;
(jjj) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. 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, such Mortgage Loan;
(kkk) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except (i) as set forth on the related
Mortgage Loan Schedule and (ii) in the case of a Mortgage Loan in an original
principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no Mortgagor was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such
Mortgage Loan, such 5% limitation is calculated in accordance with Xxxxxx Xxx's
anti-predatory lending requirements as set forth in the Xxxxxx Xxx Guides; and
(lll) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation.
Subsection 9.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File in accordance with Section 5 hereof. Upon discovery by either the Seller or
the Purchaser of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price, plus
all costs and expenses incurred by the Purchaser or any servicer arising out of
or based upon such breach, including without limitation costs and expenses
incurred in the enforcement of the Seller's repurchase obligation hereunder.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in paragraph (ww)(ii), (xx), (yy), (aaa), (eee), (fff),
(ggg), (hhh), (iii), (jjj), (kkk) or (lll) of Subsection 9.02, the Seller shall
repurchase such Mortgage Loan at the Repurchase Price plus all costs and
expenses incurred by the Purchaser or any servicer arising out of or based upon
such breach, including without limitation costs and expenses incurred in the
enforcement of the Seller's repurchase obligation hereunder. In the event that a
breach shall involve any representation or warranty set forth in Subsection
9.01, and such breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the Seller of such breach, all of the Mortgage Loans
affected by such breach shall, at the Purchaser's option, be repurchased by the
Seller at the Repurchase Price plus all costs and expenses incurred by the
Purchaser or any servicer arising out of or based upon such breach, including
without limitation costs and expenses incurred in the enforcement of the
Seller's repurchase obligation hereunder. However, if the breach shall involve a
representation or warranty set forth in Subsection 9.02 (except as provided in
the second sentence of this paragraph with respect to certain breaches for which
no substitution is permitted) and the Seller discovers or receives notice of any
such breach within 120 days of the related Closing Date, the Seller shall, at
the Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the related Closing
Date. If the Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan at the Repurchase Price plus all costs
and expenses incurred by the Purchaser or any servicer arising out of or based
upon such breach, including without limitation costs and expenses incurred in
the enforcement of the Seller's repurchase obligation hereunder. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this
Subsection 9.03 shall be accomplished by either (a) if the Interim Servicing
Agreement has been entered into and is in effect, deposit in the Custodial
Account of the amount of the Repurchase Price, including all costs and expenses
described above, for distribution to the Purchaser on the next scheduled
Remittance Date, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution or (b) if the Interim Servicing Agreement has not been
entered into or is no longer in effect, by direct remittance of the Repurchase
Price, including all costs and expenses described above, to the Purchaser or its
designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, and, in the case of substitution, identify a Qualified Substitute
Mortgage Loan and amend the related Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Seller shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Seller shall effect such substitution by delivering to the
Custodian or to such other party as the Purchaser may designate in writing for
such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment less the Servicing Fee due, if any,
on such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by the
Seller..For the month of substitution, distributions to the Purchaser shall
include the Monthly Payment due on any Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all amounts
subsequently received by the Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and expenses and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and Successor Servicer as provided in this
Subsection 9.03 and in Subsection 14.01 constitute the sole remedies of the
Purchaser respecting a breach of the foregoing representations and warranties.
For purposes of this paragraph "Purchaser" shall mean the Person then acting as
the Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and all
Persons who previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04. [RESERVED].
Subsection 9.05. Mortgage Loans with First Payment Defaults;
Repurchase.
In the event that the first Monthly Payment with respect to any
Mortgage Loan is not paid before the first day of the second month following
such Due Date, the Seller shall repurchase within 30 days thereafter such
Mortgage Loan at a price equal to the Purchase Price Percentage multiplied by
the then outstanding principal balance of such Mortgage Loan, plus accrued and
unpaid interest thereon from the date to which interest was last paid through
the day prior to the repurchase date at the applicable Mortgage Interest Rate,
plus any outstanding advances owed to any servicer in connection with such
Mortgage Loan, plus all costs and expenses incurred by the Purchaser or any
servicer arising out of or based upon such delinquency, including without
limitation costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder.
Subsection 9.06. Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without prepayment penalties, in the
event that any such Mortgage Loan prepays in full during the first three months
following the related Closing Date, the Seller shall pay the Purchaser, within
ten (10) Business Days of such prepayment in full, an amount equal to the
product of the applicable Purchase Price Percentage less 100%, multiplied by the
outstanding principal balance of such Mortgage Loan as of the related Cut-off
Date. The provisions of this Subsection 9.06 shall supersede the corresponding
provisions set forth in the related Purchase Price and Terms Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette,
or transmit by modem, a listing on a loan-level basis of the
necessary information to compute the Purchase Price of the
Mortgage Loans delivered on such Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and under the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as
specified therein) shall be true and correct as of the related
Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default
under this Agreement or an Event of Default under the Interim
Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the Interim Servicing Agreement, dated as of the initial
Cut-off Date (to be executed and delivered only for the
initial Closing Date);
3. with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date;
4. the related Mortgage Loan Schedule (one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. with respect to the initial Closing Date, a Custodial Account
Letter Agreement or a Custodial Account Certification, as
applicable, as required under the Interim Servicing Agreement;
7. with respect to the initial Closing Date, an Escrow Account
Letter Agreement or an Escrow Account Certification, as
applicable, as required under the Interim Servicing Agreement;
8. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments thereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon
request of the Purchaser;
9. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
10. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
11. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto, or in the form of the Seller's
warehouse lender's standard bailee letter, subject to the
Purchaser's reasonable approval, executed by any person, as
requested by the Purchaser, if any of the Mortgage Loans have
at any time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
12. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
13. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G;
14. Assignment and Conveyance Agreement in the form of Exhibit H
hereto;
15. Exhibit B to the related Assignment and Conveyance Agreement;
and
16. a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after each Closing Date, on one or more dates (each, a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Xxx Transfer"); or
(ii) Freddie Mac (the "Freddie Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Freddie Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the parties or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit I
(collectively, the agreements referred to herein are designated the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; and (3) to restate the
representations and warranties set forth in this Agreement and the Interim
Servicing Agreement as of the settlement or closing date in connection with such
Reconstitution (each, a "Reconstitution Date") that occurs on or prior to the
date which is six (6) months following the related Closing Date, such
restatement to be in the form of Exhibit B to Exhibit I hereto, or make the
representations and warranties set forth in the related selling/servicing guide
of the master servicer or issuer, as the case may be, in connection with such
Reconstitution. The Seller shall use its reasonable best efforts to provide to
such master servicer or issuer, as the case may be, and any other participants
in such Reconstitution: (i) any and all information and appropriate verification
of information which may be reasonably available to the Seller or its
affiliates, whether through letters of its auditors and counsel or otherwise, as
the Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller as are
reasonably believed necessary by the Purchaser or any such other participant and
as are customarily provided in connection with Securitization Transfers
involving mortgage loans similar to the Mortgage Loans; and (iii) to execute,
deliver and satisfy all conditions set forth in any indemnity agreement required
by the Purchaser or any such participant, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit J. The Seller shall indemnify the Purchaser, each Affiliate
designated by the Purchaser and each Person who controls the Purchaser or such
Affiliate and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Seller regarding the Seller, the Seller's servicing practices or performance,
the Mortgage Loans or the Underwriting Guidelines set forth in any offering
document prepared in connection with any Reconstitution. For purposes of the
previous sentence, "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement. Moreover, the Seller agrees to cooperate with
all reasonable requests made by the Purchaser to effect such Reconstitution
Agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01. Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and expenses (including legal
fees and expenses incurred in connection with the enforcement of the Seller's
indemnification obligation under this Subsection 14.01) and related costs,
judgments, and any other costs, fees and expenses that such parties may sustain
in any way related to the failure of the Seller to perform its duties or to
service the Mortgage Loans in strict compliance with the terms of this Agreement
or any Reconstitution Agreement entered into pursuant to Section 13 or any
breach of any of Seller's representations, warranties and covenants set forth in
this Agreement. For purposes of this paragraph "Purchaser" shall mean the Person
then acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer" shall
mean any Person designated as the Successor Servicer pursuant to this Agreement
and any and all Persons who previously were "Successor Servicers" pursuant to
this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02. Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios. The Purchaser shall
use reasonable best efforts to cause any prospective purchaser to enter into a
confidentiality agreement in connection with such financial information.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Accredited Home Lenders, Inc.
00000 Xxxxxx xx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Capital Markets
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Mortgage Loan Files to
determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser. This
Agreement may be assigned, pledged or hypothecated by the Purchaser without the
consent of the Seller. In the event the Purchaser assigns this Agreement, and
the assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the related Closing Date and the Seller shall take no action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Seller or any affiliate of the Seller
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission to Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A). SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B). CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C). AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D). AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.
SECTION 32. Confidentiality.
The Seller hereby acknowledges the Purchaser's need to share
non-public information ("Information") with the Purchaser's employees,
Affiliates, attorneys or accountants (the "Representatives"), as well as Persons
performing due diligence investigations in connection with securities or
merger/acquisition transactions, taxing authorities or other governmental
agencies or regulatory bodies or in order to comply with any applicable federal
or state laws (collectively with the Representatives, the "Agents"). The
Purchaser hereby agrees to use best efforts to avoid causing the Seller to
violate applicable securities laws governing publicly traded companies. The
Purchaser and the Seller shall use mutual best efforts to determine which
Information will remain confidential.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
ACCREDITED HOME LENDERS, INC.
(Seller)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Third Amended and Restated Mortgage Loan Purchase
and Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]." If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage shall be delivered in
blank. If the Mortgage Loan was acquired by the Seller in a merger, the
Assignment of Mortgage must be made by "[Seller], successor by merger to [name
of predecessor]." If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or MERS, with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder, preliminary report or commitment for title issued by the
title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
Notwithstanding the foregoing, in connection with any item described
above in clauses (c), (d) or (f), if the Seller cannot deliver or cause to be
delivered the original of any such item with evidence of recording thereon on or
prior to the related Closing Date because of a delay caused by the public
recording office where such item has been delivered for recordation or because
such item has been lost or because such public recording office retains the
original recorded item (each such item, a "Delayed Document"), the Seller shall
deliver or cause to be delivered to the Custodian, (i) in the case of a delay
caused by the public recording office, a photocopy of such Delayed Document,
together with an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) to the effect that such copy is a
true and correct copy of the Delayed Document that has been dispatched to the
appropriate public recording office for recordation (and the original recorded
Delayed Document or a copy of such Delayed Document certified by such public
recording office to be a true and complete copy of the original recorded Delayed
Document will be promptly delivered to the Custodian upon receipt thereof by the
Seller); or (ii) in the case of a Delayed Document where a public recording
office retains the original recorded Delayed Document or in the case where a
Delayed Document is lost after recordation in a public recording office, a copy
of such Delayed Document certified by such public recording office to be a true
and complete copy of the original recorded Delayed Document.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
Exhibit B
EXHIBIT B
[RESERVED]
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a corporation organized under the
laws of the state of ____________] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver agreements such as the
Third Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of _______ __, 200_, by and between Xxxxxx Xxxxxxx
Mortgage Capital Inc. (the "Purchaser") and the Company (the "Purchase
Agreement"), the Interim Servicing Agreement, dated as of _______ __,
200_, by and between the Company and the Purchaser (the "Servicing
Agreement"), and the Custodial Agreement dated as of _____ __, 200_ by and
among the Company, the Purchaser and Deutsche Bank Trust Company Americas
(the "Custodial Agreement") and to endorse the Mortgage Notes and execute
the Assignments of Mortgages by original [or facsimile] signature, and
such resolutions are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Servicing Agreement, the Custodial
Agreement, the sale of the mortgage loans or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. Except as previously identified by the Company to the Purchaser
in writing, to the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Purchase Agreement, the Servicing Agreement and the Custodial
Agreement, or the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Purchase Agreement, the Servicing Agreement and the
Custodial Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement, (c) the Custodial Agreement and
(d) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: By:
-------------------- ---------------------------
Name:
-------------------------
[Seal] Title: [Executive/Assistant Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Executive/Assistant Vice] President of the Company and
that the signature appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
-------------------- ---------------------------
Name:
-------------------------
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
--------------------------- ------------------------ ---------------------------
--------------------------- ------------------------ ---------------------------
--------------------------- ------------------------ ---------------------------
--------------------------- ------------------------ ---------------------------
--------------------------- ------------------------ ---------------------------
--------------------------- ------------------------ ---------------------------
--------------------------- ------------------------ ---------------------------
Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Third Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Purchaser"), dated as of _________ __, 200_ (the "Purchase Agreement"),
which sale is in the form of whole loans, delivered pursuant to a Custodial
Agreement dated as of _____ __, 200_ among the Purchaser, the Company and
Deutsche Bank Trust Company Americas (the "Custodial Agreement"), and serviced
pursuant to an Interim Servicing Agreement, dated as of ______ __, 200_ by and
between the Seller and the Purchaser (the "Servicing Agreement" and,
collectively with the Purchase Agreement and the Custodial Agreement, the
"Agreements"). Capitalized terms not otherwise defined herein have the meanings
set forth in the Purchase Agreement and the Servicing Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Servicing Agreement;
3. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as [we] [I] have
deemed necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement and in the Servicing Agreement, as applicable. [We] [I]
have assumed the authenticity of all documents submitted to [us] [me] as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is [type of entity] duly organized, validly
existing and in good standing under the laws of the [state of
incorporation] and is qualified to transact business in, and
is in good standing under, the laws of [the state of
incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Agreements to which it is a party and all
requisite power, authority and legal right to execute and
deliver such Agreements and to perform and observe the terms
and conditions of such Agreements.
3. Each of the Agreements to which it is a party has been duly
authorized, executed and delivered by the Company, and is a
legal, valid and binding agreement enforceable in accordance
with its respective terms against the Company, subject to
bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application
of the rules of equity, including those respecting the
availability of specific performance, none of which will
materially interfere with the realization of the benefits
provided thereunder or with the Purchaser's ownership of the
Mortgage Loans.
4. The Company has been duly authorized to allow certain of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements to which it is a party
5. The Company has been duly authorized to allow certain of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements to which it is a
party and the sale of the Mortgage Loans by the Company or the
consummation of the transactions contemplated by the
Agreements to which each is a party or (ii) any required
consent, approval, authorization or order has been obtained by
the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements to which
it is a party conflicts or will conflict with or results or
will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms
of any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations,
writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject
or by which it is bound.
8. Except as previously identified by the Company to the
Purchaser in writing, there is no action, suit, proceeding or
investigation pending or, to the best of [our] [my] knowledge,
threatened against the Company which, in [our] [my] judgment,
either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in
any material impairment of the right or ability of the Company
to carry on its business substantially as now conducted or in
any material liability on the part of the Company or which
would draw into question the validity of the Agreements to
which it is a party or the Mortgage Loans or of any action
taken or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the
terms of the Agreements to which it is a party.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
10. The endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to
the Purchaser, or its designee, are sufficient to permit the
Purchaser to avail itself of all protection available under
applicable law against the claims of any present or future
creditors of the Company, and are sufficient to prevent any
other sale, transfer, assignment, pledge or hypothecation of
the Mortgages and the Mortgage Notes by the Company from being
enforceable.
I am admitted to the bar of the State of California, and I express
no opinion as to the laws of any other jurisdiction except as to matters that
are governed by federal law. I make no undertaking to supplement or update this
opinion if, after the date hereof, facts or circumstances come to my attention
or changes in the law occur which could affect such opinion. This opinion is
given to you for your sole benefit, and no other person or entity is entitled to
rely hereon except that the purchaser or purchasers to which you initially and
directly resell the Mortgage Loans may rely on this opinion as if it were
addressed to them as of its date.
Very truly yours,
--------------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
--------------------------
--------------------------
--------------------------
Attention:
---------------------------
---------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to Xxxxxx Xxxxxxx Mortgage
Capital Inc. under the Third Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of ______ __, 200_, certain mortgage loans
originated by the Association. The Company warrants that the mortgage loans to
be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond
any collateral required to secure advances made by the Association to the
Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
----------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Date:
---------------------------
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Date:
---------------------------
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
Upon receipt of the sum of $_____________ in immediately available
funds, the financial institution named below hereby relinquishes any and all
right, title and interest it may have in all Mortgage Loans to be purchased by
Xxxxxx Xxxxxxx Mortgage Capital Inc. from the Company named below pursuant to
that certain Third Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of ______ __, 200_, and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Company named below or its
designees, as of the date and time of the sale of such Mortgage Loans to Xxxxxx
Xxxxxxx Mortgage Capital Inc.
Name and Address of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
By:
-----------------------------
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
----------------------------
By:
-----------------------------
Title:
--------------------------
Date:
---------------------------
Exhibit G
EXHIBIT G
UNDERWRITING GUIDELINES
Exhibit H
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of __________, ____, ___________________ ("Seller"),
as (i) the Seller under that certain Purchase Price and Terms Agreement, dated
as of ___________, _____ (the "PPTA"), (ii) the Seller under that certain Third
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of ________, ____ (the "Purchase Agreement"), and (iii) the Seller/Interim
Servicer under that certain Interim Servicing Agreement, dated as of
___________, ____ (the "Interim Servicing Agreement" and, together with the PPTA
and the Purchase Agreement, the "Agreements"), does hereby sell, transfer,
assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital Inc.
("Purchaser") as the Purchaser under the Agreements, without recourse, but
subject to the terms of the Agreements, all right, title and interest of, in and
to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit A (the "Mortgage Loans"), together with the Mortgage Files and all
rights and obligations arising under the documents contained therein. Each
Mortgage Loan subject to the Agreements was underwritten in accordance with, and
conforms to, the Underwriting Guidelines attached hereto as Exhibit C. Pursuant
to Section 6 of the Purchase Agreement, the Seller has delivered to the
Custodian the documents for each Mortgage Loan to be purchased as set forth in
the Custodial Agreement. The contents of each Servicing File required to be
retained by __________________________ ("Interim Servicer") to service the
Mortgage Loans pursuant to the Interim Servicing Agreement and thus not
delivered to the Purchaser are and shall be held in trust by the Seller in its
capacity as Interim Servicer for the benefit of the Purchaser as the owner
thereof. The Interim Servicer's possession of any portion of the Servicing File
is at the will of the Purchaser for the sole purpose of facilitating servicing
of the related Mortgage Loan pursuant to the Interim Servicing Agreement, and
such retention and possession by the Interim Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, the Servicing
Rights and the contents of the Mortgage File and Servicing File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Seller or the Interim Servicer shall immediately vest in the Purchaser and shall
be retained and maintained, in trust, by the Seller at the will of the Purchaser
in such custodial capacity only.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
[SELLER]
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Exhibit H
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
Exhibit H
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on
the related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than
$_________; (2) an origination date earlier than _ months prior to the related
Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO Score of less than
___; or (5) a debt-to-income ratio of more than __%. Each First Lien Loan has a
Mortgage Interest Rate of at least ___% per annum and an outstanding principal
balance less than $_________. Each Second Lien Loan has a Mortgage Interest Rate
of at least ______% per annum and an outstanding principal balance less than
$________. Each Adjustable Rate Mortgage Loan has an Index of [_______].
Exhibit H
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT I
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Third Amended
and Restated Mortgage Loan Purchase and Warranties Agreement (the "Purchase
Agreement"), dated as of [DATE], between the Assignor, as purchaser (the
"Purchaser"), and the Company, as seller, solely insofar as the Purchase
Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under and
any obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser or the Custodian under the Purchase Agreement
insofar as they relate to the Mortgage Loans shall be deemed to refer to the
Trust (including the Trustee and the Servicer acting on the Trust's behalf).
Neither the Company nor the Assignor shall amend or agree to amend, modify,
waiver, or otherwise alter any of the terms or provisions of the Purchase
Agreement which amendment, modification, waiver or other alteration would in any
way affect the Mortgage Loans or the Company's performance under the Purchase
Agreement with respect to the Mortgage Loans without the prior written consent
of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement. The
execution by the Company of this Agreement is in the ordinary course of
the Company's business and will not conflict with, or result in a breach
of, any of the terms, conditions or provisions of the Company's charter or
bylaws or any legal restriction, or any material agreement or instrument
to which the Company is now a party or by which it is bound, or result in
the violation of any law, rule, regulation, order, judgment or decree to
which the Company or its property is subject. The execution, delivery and
performance by the Company of this Agreement have been duly authorized by
all necessary corporate action on part of the Company. This Agreement has
been duly executed and delivered by the Company, and, upon the due
authorization, execution and delivery by the Assignor and the Assignee,
will constitute the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and by general principles of equity
regardless of whether enforceability is considered in a proceeding in
equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by the Company in connection with the execution, delivery
or performance by the Company of this Agreement, or if required, such
approval has been obtained prior to the date hereof; and
(d) Except as previously identified by the Company to the Assignor in
writing, there is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative agency or
other tribunal, which would draw into question the validity of this
Agreement or the Purchase Agreement, or which, either in any one instance
or in the aggregate, would result in any material adverse change in the
ability of the Company to perform its obligations under this Agreement or
the Purchase Agreement, and the Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the date hereof as if such representations and
warranties were made on the date hereof unless otherwise specifically stated in
such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By:
------------------------------------
Name:
------------------------------------
Its:
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XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
------------------------------------
Name:
------------------------------------
Its:
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[ ]
--------------------------
By:
------------------------------------
Name:
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Its:
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EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties as to the Mortgage Loans
(insert reps from Exhibit B to PPTA here)
Exhibit J
EXHIBIT J
FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
WHEREAS, [________________] (the "Depositor") is acting as depositor
and registrant with respect to the Prospectus, dated [________________], and the
Prospectus Supplement to the Prospectus, [________________] (the "Prospectus
Supplement"), relating to [________________] Certificates (the "Certificates")
to be issued pursuant to a Pooling and Servicing Agreement, dated as of
[________________] (the "P&S"), among the Depositor, as depositor,
[________________], as servicer (the "Servicer"), and [________________], as
trustee (the "Trustee");
WHEREAS, Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Xxxxxx Xxxxxxx")
purchased from [SELLER] ("Seller") certain of the Mortgage Loans underlying the
Certificates (the "Mortgage Loans") from Seller pursuant to the Third Amended
and Restated Mortgage Loan Purchase and Warranties Agreement, dated as of [DATE]
(the "Purchase Agreement"), by and between Xxxxxx Xxxxxxx and Seller; and
WHEREAS, pursuant to Section 13 of the Purchase Agreement, Seller
has agreed to indemnify Xxxxxx Xxxxxxx and its affiliates and their respective
present and former directors, officers, employees and agents;
NOW THEREFORE, in consideration of the agreements contained herein,
and other valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Seller and Xxxxxx Xxxxxxx agree as follows:
1. Indemnification and Contribution.
(a) Seller agrees to indemnify and hold harmless Xxxxxx Xxxxxxx and
its affiliates and their respective present and former directors, officers,
employees and agents and each person, if any, who controls Xxxxxx Xxxxxxx or
such affiliate within the meaning of either Section 15 of the Securities Act of
1933, as amended (the "1933 Act"), or Section 20 of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based in whole or in part upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus Supplement or in the
Comp Materials or any omission or alleged omission to state in the Prospectus
Supplement or in the Comp Materials a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any such untrue
statement or omission or alleged untrue statement or alleged omission made in
any amendment of or supplement to the Prospectus Supplement or the Comp
Materials and agrees to reimburse Xxxxxx Xxxxxxx or such affiliate and each such
officer, director, employee, agent and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that Seller shall be liable in any such case only to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with the Seller Information.
The foregoing indemnity agreement is in addition to any liability which Seller
may otherwise have to Xxxxxx Xxxxxxx, its affiliates or any such director,
officer, employee, agent or controlling person of Xxxxxx Xxxxxxx or its
affiliates.
As used herein:
"Seller Information" means any information relating to Seller, the
Mortgage Loans and/or the underwriting guidelines relating to the Mortgage Loans
set forth in the Prospectus Supplement or the Comp Materials.
The terms "Collateral Term Sheet" and "Structural Term Sheet" shall
have the respective meanings assigned to them in the February 13, 1995 letter
(the "PSA Letter") of Xxxxxx, Xxxxxxxx, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral Term Sheet" as used
herein includes any subsequent Collateral Term Sheet that reflects a substantive
change in the information presented. The term "Computational Materials" has the
meaning assigned to it in the May 17, 1994 letter (the "Xxxxxx letter" and,
together with the PSA Letter, the "No-Action Letters") of Xxxxx & Xxxx on behalf
of Xxxxxx, Xxxxxxx & Co., Inc. (which letter, and the SEC staff's response
thereto, were publicly available May 20, 1994). The term "Comp Materials" as
used herein means, collectively, Collateral Term Sheets, Structural Term Sheet
and Computational Materials relating to the Certificates or the transaction
contemplated by the Prospectus Supplement.
(b) Promptly after receipt by any indemnified party under this
Section 1 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 1, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided, further, however, that
the failure to notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 1.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, except as provided in
the following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 1 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
necessary or appropriate for such indemnified party to employ separate counsel;
or (iii) the indemnifying party has failed to assume the defense of such action
and employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties.
Each indemnified party, as a condition of the indemnity agreements
contained in this Section 1, shall cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement.
(c) If the indemnification provided for in this Section 1 is
unavailable to an indemnified party, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities, in such proportion as is appropriate to reflect the relative fault
of the indemnifying party and the indemnified party, respectively, in connection
with the statements or omissions that result in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the indemnified party and indemnifying party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission and any other equitable considerations.
(d) The indemnity and contribution agreements contained in this
Section 1 and the representations and warranties set forth in Section 2 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by Xxxxxx Xxxxxxx, its directors,
officers, employees or agents or any person controlling Xxxxxx Xxxxxxx, and
(iii) acceptance of and payment for any of the Offered Certificates.
2. Representations and Warranties. Seller represents and warrants
that:
(i) Seller is validly existing and in good standing under the laws
of its jurisdiction of formation or incorporation, as applicable, and has
full power and authority to own its assets and to transact the business in
which it is currently engaged. Seller is duly qualified to do business 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 otherwise) of Seller;
(ii) Seller is not required to obtain the consent of any other
person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity
or enforceability of this Agreement;
(iii) the execution, delivery and performance of this Agreement by
Seller will not violate any provision of any existing law or regulation or
any order decree of any court applicable to Seller or any provision of the
charter or bylaws of Seller, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which Seller is a
party or by which it may be bound;
(iv) except as previously identified by Seller to Xxxxxx Xxxxxxx in
writing, (a) no proceeding of or before any court, tribunal or
governmental body is currently pending or, (b) to the knowledge of Seller,
threatened against Seller or any of its properties or with respect to this
Agreement or the Offered Certificates, in either case, which would have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of Seller;
(v) Seller has full power and authority to make, execute, deliver
and perform this Agreement and all of the transactions contemplated
hereunder, 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 legal, valid and binding
obligation of each of Seller enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally, by the availability of equitable remedies,
and by limitations of public policy under applicable securities law as to
rights of indemnity and contribution thereunder; and
(vi) this Agreement has been duly executed and delivered by Xxxxxx.
3. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to Seller, will be mailed,
delivered or telegraphed and confirmed [______________________]; or, if
sent to Xxxxxx Xxxxxxx, will be mailed, delivered or telegraphed and
confirmed to Xxxxxx Xxxxxxx, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: [____________].
4. Miscellaneous. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving
effect to the conflict of laws provisions thereof. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
successors and assigns and the controlling persons referred to herein, and
no other person shall have any right or obligation hereunder. Neither this
Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against whom enforcement of the change, waiver, discharge or
termination is sought. This Agreement may be executed in counterparts,
each of which when so executed and delivered shall be considered an
original, and all such counterparts shall constitute one and the same
instrument. Capitalized terms used but not defined herein shall have the
meanings provided in the P&S.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, this
__th day of [_____________].
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
ACCREDITED HOME LENDERS, INC.
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 1
AMENDMENT NO. 1, dated as of April 2, 2004 ("Amendment"), to the
Third Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of February 1, 2004 (the "Purchase Agreement"), each between XXXXXX
XXXXXXX MORTGAGE CAPITAL INC., a New York corporation ("Xxxxxx Xxxxxxx"), and
ACCREDITED HOME LENDERS, INC., a California corporation ("Accredited").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
(i) Subsection 9.02(kkk) is hereby amended by deleting the "and"
from the end of such subsection.
(ii) Subsection 9.02 is hereby amended by adding the following
representation to the end of such subsection following Subsection (lll):
"(mmm) No Arbitration. No Mortgage Loan originated on or after
August 1, 2004, or such earlier date as Xxxxxx Xxx may establish as an effective
date for its policy against such provisions, requires the related Mortgagor to
submit to arbitration to resolve any dispute arising out of or relating in any
way to the Mortgage Loan transaction."
(iii) Subsection 9.03 is hereby amended by adding a reference to
clause (mmm) following the reference to clause (lll) in the second sentence of
the second paragraph.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
ACCREDITED HOME LENDERS, INC.
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 2
AMENDMENT NO. 2, dated as of July 2, 2004 ("Amendment"), to the
Third Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of February 1, 2004, as amended by Amendment No. 1, dated as of April
2, 2004 (the "Purchase Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL
INC., a New York corporation ("Xxxxxx Xxxxxxx"), and ACCREDITED HOME LENDERS,
INC., a California corporation ("Accredited").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
(i) Section 1 is hereby amended by:
(a) inserting the following defined terms in alphabetical order
therein:
"Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary."
"Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary."
"Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.."
(b) adding the following language to the end of the first sentence
of the definition of "High Cost Loan" following the words "and/or fees" and
prior to the ".":
"or (c) a Mortgage Loan categorized as High Cost pursuant to
Appendix E of Standard & Poor's Glossary"
(c) deleting the "and" prior to the "(50)" in the definition of
"Mortgage Loan Schedule" and adding the following language immediately following
the reference to "Section 9.02(kkk)" in clause (50) of such definition:
"and (51) a code indicating whether the Mortgage Loan is a Home
Loan"
(ii) Subsection 9.02 is hereby amended by:
(a) deleting the entire sentence beginning with "No fraud," in
clause (k) and replacing it with the following:
"No fraud, error, omission, misrepresentation, or similar occurrence
with respect to the origination of a Mortgage Loan has taken place on the
part of any Person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan."
(b) adding the following language to the end of the first sentence
of clause (xx) following the word "Loan" and prior to the ".":
"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"
(c) deleting clause (eee) and replacing it with "[Reserved];"
(iii) Subsection 9.05 is hereby amended by deleting the section in
its entirety and replacing it with the following:
"In the event that the first Monthly Payment with respect to any
Mortgage Loan is not paid either (i) before the first day of the second month
following its origination, or (ii) before the first day of the second month
following the related Closing Date, the Seller shall repurchase within 30 days
thereafter such Mortgage Loan at a price equal to the Purchase Price Percentage
multiplied by the then outstanding principal balance of such Mortgage Loan, plus
accrued and unpaid interest thereon from the date to which interest was last
paid through the day prior to the repurchase date at the applicable Mortgage
Interest Rate, plus any outstanding advances owed to any servicer in connection
with such Mortgage Loan, plus all costs and expenses incurred by the Purchaser
or any servicer arising out of or based upon such delinquency, including without
limitation costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder; provided, however, that the Purchaser must
request that Seller repurchase such Mortgage Loan within sixty (60) days of the
initial delinquency."
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
ACCREDITED HOME LENDERS, INC.
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 3
AMENDMENT NO. 3, dated as of February 15, 2005 ("Amendment"), to the
Third Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of February 1, 2004, as amended by Amendment No. 1, dated as of April
2, 2004 and Amendment No. 2, dated as of July 2, 2004 (the "Purchase
Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a New York
corporation ("Xxxxxx Xxxxxxx"), and ACCREDITED HOME LENDERS, INC., a California
corporation ("Accredited").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
a. Section 9.02(dd) is hereby amended by deleting the following
language:
"to the best of the Seller's knowledge,"
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
ACCREDITED HOME LENDERS, INC.
By:
--------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 4
AMENDMENT NO. 4, dated as of April 15, 2005 ("Amendment"), to the
Third Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of February 1, 2004, as amended by Amendment No. 1, dated as of April
2, 2004, Amendment No. 2, dated as of July 2, 2004 and Amendment No. 3, dated as
of February 15, 2005 (the "Purchase Agreement"), each between XXXXXX XXXXXXX
MORTGAGE CAPITAL INC., a New York corporation ("Xxxxxx Xxxxxxx"), and ACCREDITED
HOME LENDERS, INC., a California corporation ("Accredited").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
a. Section 1 is hereby amended by deleting the definition of
"Mortgage Loan Schedule" in its entirety and replacing it with
the following language:
"Mortgage Loan Schedule: The schedule attached to the Purchase
Price and Terms Agreement as the "Points Schedule" together
with the schedule of Mortgage Loans setting forth the
following information with respect to each Mortgage Loan in
the related Mortgage Loan Package: (1) the Seller's Mortgage
Loan identifying number; (2) the Mortgagor's name; (3) the
street address of the Mortgaged Property including the city,
state and zip code; (4) a code indicating whether the
Mortgagor is self-employed; (5) a code indicating whether the
Mortgaged Property is owner-occupied; (6) the number and type
of residential units constituting the Mortgaged Property; (7)
the original months to maturity or the remaining months to
maturity from the related Cut-off Date, in any case based on
the original amortization schedule and, if different, the
maturity expressed in the same manner but based on the actual
amortization schedule; (8) with respect to each First Lien
Loan, the Loan-to-Value Ratio at origination, and with respect
to each Second Lien Loan, the CLTV at origination; (9) the
Mortgage Interest Rate as of the related Cut-off Date; (10)
the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity
date; (12) the first payment date; (13) the amount of the
Monthly Payment as of the related Cut-off Date; (14) the last
payment date on which a payment was actually applied to the
outstanding principal balance; (15) the original principal
amount of the Mortgage Loan; (16) the principal balance of the
Mortgage Loan as of the close of business on the related
Cut-off Date, after deduction of payments of principal due and
collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with
respect to each Adjustable Rate Mortgage Loan, the Interest
Rate Adjustment Date; (19) with respect to each Adjustable
Rate Mortgage Loan, the Gross Margin; (20) with respect to
each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap
under the terms of the Mortgage Note; (21) with respect to
each Adjustable Rate Mortgage Loan, a code indicating the type
of Index; (22) the type of Mortgage Loan (i.e., Fixed or
Adjustable Rate Mortgage Loan, First or Second Lien Loan);
(23) a code indicating the purpose of the loan (i.e.,
purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e., full,
alternative or reduced); (25) asset verification (Y/N); (26)
the loan credit classification (as described in the
Underwriting Guidelines); (27) whether such Mortgage Loan
provides for a Prepayment Penalty and, if applicable, the
Prepayment Penalty period; (28) the Mortgage Interest Rate as
of origination; (29) the credit risk score (FICO score); (30)
the date of origination; (31) with respect to Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate adjustment period;
(32) with respect to each Adjustable Rate Mortgage Loan, the
Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage
Interest Rate floor; (34) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate Cap as of the first
Interest Rate Adjustment Date; (35) with respect to each
Adjustable Rate Mortgage Loan, the Periodic Rate Cap
subsequent to the first Interest Rate Adjustment Date; (36)
with respect to each Adjustable Rate Mortgage Loan, a code
indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate
Mortgage Loan with negative amortization, the negative
amortization limit; (38) a code indicating whether the
Mortgage Loan is a Home Loan; (39) a code indicating whether
the Mortgage Loan is a Balloon Mortgage Loan; (40) the Due
Date for the first Monthly Payment; (41) the original Monthly
Payment due; (42) a code indicating the PMI Policy provider
and percentage of coverage, if applicable; (43) Appraised
Value; (44) appraisal type; (45) automated valuation model
(AVM); (46) appraisal date; (47) with respect to the related
Mortgagor, the debt-to-income ratio; and (48) the MERS
Identification Number, if applicable. With respect to the
Mortgage Loans in the aggregate, the Mortgage Loan Schedule
shall set forth the following information, as of the related
Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest
Rate of the Mortgage Loans; (4) the weighted average maturity
of the Mortgage Loans; (5) the applicable Cut-off Date; and
(6) the applicable Closing Date."
b. Section 9.02 is hereby amended by deleting clause (kkk) in its
entirety and replacing it with "[Reserved];"
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
ACCREDITED HOME LENDERS, INC.
By:
--------------------------------------
Name:
Title:
EXHIBIT R
WMC PURCHASE AGREEMENT
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-----------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
WMC MORTGAGE CORP.,
Seller
----------------
Dated as of April 1, 2004
Conventional,
Fixed and Adjustable Rate, Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH..................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS....
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of April 1, 2004, by and between Xxxxxx Xxxxxxx Mortgage
Capital Inc., a New York corporation, having an office at 0000 Xxxxxx xx xxx
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), and WMC
Mortgage Corp., a California corporation, having an office at 0000 Xxxxxx
Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain first and second lien, adjustable-rate and fixed-rate
residential mortgage loans (the "Mortgage Loans") on a servicing released basis
as described herein, and which shall be delivered in pools of whole loans (each,
a "Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a Residential
Dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing by the Interim Servicer and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Xxx Transfer or a Freddie Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
of the related Mortgaged Property based upon the appraisal made, if any, for the
originator at the time of origination of the Mortgage Loan or the sales price of
the Mortgaged Property at such time of origination, whichever is less; provided,
however, that in the case of a refinanced Mortgage Loan, such value is based
solely upon the appraisal made, if any, at the time of origination of such
refinanced Mortgage Loan, and (ii) with respect to any Second Lien Loan, the
value, determined pursuant to the Seller's Underwriting Guidelines, of the
related Mortgaged Property as of the origination of the Second Lien Loan.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which the Interim Servicer's servicing operations are located or
(iii) the state in which the Custodian's operations are located, are authorized
or obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Custodial Account: The separate trust account created and maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York banking
corporation, and its successors in interest or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement as Exhibit 11.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account created and maintained pursuant
to Subsection 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost
home," "threshold," "covered," "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law (or a similarly
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 and/or fees). For avoidance of doubt, the
parties agree that this definition shall apply to any law currently in effect
regardless of whether such law is presently, or in the future becomes, the
subject of judicial review or litigation.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to Mortgage Insurance issued by the FHA. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof such
as the FHA and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan for the purpose of calculating the Mortgage
Interest Rate thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property
and received on or after the applicable Cut-off Date.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest or assigns, or any successor to the
Interim Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
Liquidation Proceeds: Cash (other than Insurance Proceeds or
Condemnation Proceeds) received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal Manufactured
Home Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development ("HUD Code"), as amended in 2000,
which preempts state and local building codes. Each unit is identified by the
presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and taxed accordingly. The permanent foundation may be on land owned by
the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual, (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS(R)
System, and (c) the Seller has designated or will designate the Custodian as the
Custodian on the MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on the Mortgaged Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity date; (12) the
first payment date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment was actually applied
to the outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, a code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (24) a code indicating the documentation style
(i.e., full, alternative or reduced); (25) asset verification (Y/N); (26) the
loan credit classification (as described in the Underwriting Guidelines); (27)
whether such Mortgage Loan provides for a Prepayment Penalty and, if applicable,
the Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment period; (32) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate adjustment percentage; (33) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (35) with respect to
each Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code indicating
whether the Mortgage Loan is a High Cost Loan; (39) a code indicating whether
the Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) a code indicating
the PMI Policy provider and percentage of coverage, if applicable; (43)
Appraised Value; (44) appraisal type; (45) automated valuation model (AVM); (46)
appraisal date; (47) with respect to the related Mortgagor, the debt-to-income
ratio; (48) with respect to each MERS Designated Mortgage Loan, the MERS
Identification Number; (49) a code indicating whether the Mortgage Loan was
purchased from a correspondent; and (50) a code indicating whether the Mortgage
Loan does not comply with Subsection 9.02 (ooo). With respect to the Mortgage
Loans in the aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; (4) the
weighted average maturity of the Mortgage Loans; (5) the applicable Cut-off
Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in one
or more separate and complete tax parcels of real property improved by a
Residential Dwelling.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any successor to the
Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation was not affected by the approval or disapproval of the
Mortgage Loan, and such appraiser and the appraisal made by such appraiser both
satisfied the requirements of Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project, (iv) a one-family dwelling in
a planned unit development, or (v) a Manufactured Home, none of which is a
dwelling unit in a residential cooperative housing corporation or mobile home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Interim Servicer under the Interim Servicing Agreement. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, to the extent permitted by this Agreement)
of such Monthly Payment collected by the Interim Servicer, or as otherwise
provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans (other than any payments or monies received
by Seller during any interim servicing period for servicing any Mortgage Loan);
(b) any payments to or monies received by the Seller for servicing the Mortgage
Loans; (c) any late fees, penalties or similar payments with respect to the
Mortgage Loans; (d) all agreements or documents creating, defining or evidencing
any such servicing rights to the extent they relate to such servicing rights and
all rights of the Seller thereunder; (e) Escrow Payments or other similar
payments with respect to the Mortgage Loans and any amounts actually collected
by the Seller with respect thereto; (f) all accounts and other rights to payment
related to any of the property described in this paragraph; and (g) any and all
documents, files, records, servicing files, servicing documents, servicing
records, data tapes, computer records, or other information pertaining to the
Mortgage Loans or pertaining to the past, present or prospective servicing of
the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the Stated Principal Balance. The
initial principal amount of the related Mortgage Loans shall be the aggregate
principal balance of the Mortgage Loans, so computed as of the related Cut-off
Date. If so provided in the related Purchase Price and Terms Agreement, portions
of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the Stated Principal
Balance of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans from the related
date on which interest was last paid through the day prior to the applicable
Closing Date, inclusive. The Purchase Price plus accrued interest as set forth
in the preceding paragraph shall be paid to the Seller by wire transfer of
immediately available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees during the period that the
Interim Servicer is servicing the Mortgage Loans (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan (except with respect to each MERS Designated Mortgage Loan),
or (b) make the related Mortgage File available to the Purchaser for examination
at such other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole good
faith discretion, that any Mortgage Loans are unacceptable to the Purchaser for
any reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date and with the payment of the Purchase Price by the Purchaser,
shall execute and deliver an Assignment and Conveyance Agreement in the form
attached hereto as Exhibit G (the "Assignment and Conveyance Agreement"). The
Seller shall cause the Servicing File retained by the Interim Servicer pursuant
to this Agreement to be appropriately identified in the Seller's computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. The Seller shall cause the Interim
Servicer to release from its custody the contents of any Servicing File retained
by it only in accordance with this Agreement or the Interim Servicing Agreement,
except when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, beneficial ownership of each Mortgage and related
Mortgage Note shall be vested solely in the Purchaser or the appropriate
designee of the Purchaser, as the case may be. All rights arising out of the
Mortgage Loans including, but not limited to, all funds received by the Seller
or the Interim Servicer after the related Cut-off Date on or in connection with
a Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller or the Interim Servicer
in trust for the benefit of the Purchaser or the appropriate designee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to
the terms of this Agreement.
The Interim Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each Mortgage Loan which shall
be marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Interim Servicer shall maintain in its possession,
available for inspection by the Purchaser and in accordance with Accepted
Servicing Practices, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations,
including but not limited to documentation as to the method used in determining
the applicability of the provisions of the National Flood Insurance Act of 1968,
as amended, to the Mortgaged Property, documentation evidencing insurance
coverage and periodic inspection reports. To the extent that original documents
are not required for purposes of realization of Liquidation Proceeds or
Insurance Proceeds, documents maintained by the Seller or the Interim Servicer
may be in the form of microfilm or microfiche.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto with respect to each Mortgage Loan set
forth on the related Mortgage Loan Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered for the related Closing Date, as evidenced by
the Initial Certification of the Custodian. The Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
this Agreement within two weeks of their execution, provided, however, that the
Seller shall provide the Custodian, or to such other Person as the Purchaser
shall designate in writing, with a certified true copy of any such document
submitted for recordation within two weeks of its execution, and shall promptly
provide the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original within one hundred twenty days of its submission
for recordation.
In the event any document required to be delivered to the Custodian
pursuant to this Agreement including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 120 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer to, have an
internal quality control program that verifies, on a regular basis, the
existence and accuracy of the legal documents, credit documents, property
appraisals, and underwriting decisions. The program shall include evaluating and
monitoring the overall quality of the Seller's loan production and the servicing
activities of the Interim Servicer. The program is to ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors and
omissions by officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract servicer
of the Mortgage Loans for an interim period pursuant to and in accordance with
the terms and conditions contained in the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein). The
Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
Pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Interim
Servicer shall begin servicing the Mortgage Loans on behalf of the Purchaser and
shall be entitled to a Servicing Fee with respect to such Mortgage Loans until
the applicable Transfer Date. The Interim Servicer shall conduct such servicing
in accordance with the Interim Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cause the Interim Servicer to cease all servicing responsibilities related to,
the related Mortgage Loans subject to such Transfer Date. The Transfer Date
shall be the date determined in accordance with Section 6.02 of the Interim
Servicing Agreement (with respect to each Mortgage Loan, for an interim period,
as specified therein).
On or prior to the applicable Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Seller shall cause the Interim
Servicer to mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall cause the Interim Servicer to provide the Purchaser with copies of all
such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall cause the Interim Servicer to transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall cause the Interim
Servicer to provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Interim Servicer to forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Interim Servicer's possession relating to
each related Mortgage Loan including the information enumerated in the Interim
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall cause the Interim Servicer to
provide the Purchaser, or its designee, with immediately available funds by wire
transfer in the amount of the net Escrow Payments and suspense balances and all
loss draft balances associated with the related Mortgage Loans. The Seller shall
cause the Interim Servicer to provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in its sole
discretion, of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall cause the
Interim Servicer to wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Interim Servicer.
(e) Payoffs and Assumptions. The Seller shall cause the Interim
Servicer to provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Interim Servicer on the related Mortgage
Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Interim Servicer or the Seller on
each related Mortgage Loan shall be properly applied by the Interim Servicer or
the Seller, as applicable, to the account of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt.
The Seller shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment sufficient information to permit appropriate processing of the payment
by the Purchaser. The Seller shall assume full responsibility for the necessary
and appropriate legal application of such Monthly Payments received by the
Seller after the Transfer Date with respect to related Mortgage Loans then in
foreclosure or bankruptcy; provided, for purposes of this Agreement, necessary
and appropriate legal application of such Monthly Payments shall include, but
not be limited to, endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar amount, date
received and any special Mortgagor application instructions and the Seller shall
cause the Interim Servicer to comply with the foregoing requirements with
respect to all Monthly Payments received by the Interim Servicer after the
Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer
Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage in a Custodial Account or Escrow Account, the Seller shall be
liable for the amount of such shortage. The Seller shall reimburse the
Purchaser for the amount of such shortage within thirty (30) days after
receipt of written demand therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the Transfer
Date has created an improper Purchase Price as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party
shorted by the improper payment application within five (5) Business Days
after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h) shall
be accompanied by a statement indicating the corresponding Seller and/or
the Purchaser Mortgage Loan identification number and an explanation of
the allocation of any such payments.
(i) [Reserved].
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments reasonably
required by the Purchaser. Any such monetary adjustments will be transferred
between the Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall or shall cause the Interim Servicer
to file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall provide copies of such forms to
the Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties reasonably incurred by the Purchaser due to the Seller's failure to
comply with this paragraph.
(l) MERS. With respect to each MERS Designated Mortgage Loan, the
Seller shall, on or before the Transfer Date, designate, as directed by the
Purchaser, the Purchaser, or its designee, as the servicer on the MERS(R)
System. In addition, the Seller shall promptly take all other actions reasonably
requested by Purchaser with respect to MERS Designated Mortgage Loans and the
MERS(R) System to effectuate and evidence the transfer of servicing in
accordance with the terms of this Agreement and the Interim Servicing Agreement.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation or formation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in the states where the Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Seller. The Seller has corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement has been duly executed and delivered and constitutes
the valid, legal, binding and enforceable obligation of the Seller, except as
enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors and (ii) general principles of equity,
whether enforcement is sought in a proceeding in equity or at law. All requisite
corporate action has been taken by the Seller to make this Agreement valid and
binding upon the Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this Agreement from any
court, governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if required, such consent,
approval, authorization or order has been or will, prior to the related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to Seller's knowledge, threatened against the Seller,
before any court, administrative agency or other tribunal asserting the
invalidity of this Agreement, seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or which, either in any one instance
or in the aggregate, would likely result in any material adverse change in the
business, operations, financial condition, properties or assets of the Seller,
or in any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon the Underwriting Guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
to the extent required by the Anti-Money Laundering Laws, has conducted due
diligence in connection with the origination of each Mortgage Loan to the extent
required by and for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from among
the one- to four-family mortgage loans in the Seller's portfolio at the related
Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to this Agreement shall be delivered to
the Custodian all in compliance with the specific requirements hereunder. With
respect to each Mortgage Loan, the Seller will be in possession of a complete
Mortgage File in compliance with Exhibit A hereto, except for such documents as
will be delivered to the Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m) [Reserved];
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) [Reserved];
(p) Owner of Record. Upon payment of the Purchase Price, the Seller
is the owner of record of each Mortgage and the indebtedness evidenced by each
Mortgage Note, except for the Assignments of Mortgage which have been sent for
recording, and upon recordation the Seller will be the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, and upon the sale
of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Credit Reporting. The Seller, as servicer, will fully furnish
(or cause to be furnished), in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis. Additionally, the Seller, as servicer, will transmit (or cause to
be transmitted) full-file credit reporting data for each Mortgage Loan pursuant
to Xxxxxx Xxx Guide Announcement 95-19 and that for each Mortgage Loan, the
Seller, as servicer, agrees it shall report (or cause to be reported) one of the
following statuses each month as follows: new origination, current, delinquent
(30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent, exclusive
of any period of grace, at any time since the origination of the Mortgage Loan.
The first Monthly Payment shall be made with respect to the Mortgage Loan on its
related Due Date or within the grace period, all in accordance with the terms of
the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, subject to bankruptcy, equitable principles and laws affecting
creditor rights;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by an
insurer acceptable in accordance with Seller's Underwriting Guidelines against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is situated as well as all
additional requirements set forth in Section 2.10 of the Interim Servicing
Agreement. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to Seller's Underwriting Guidelines as well
as all additional requirements set forth in Section 2.10 of the Interim
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Xxxxxxxxx's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation of
the transactions contemplated hereby will not involve the violation of any such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements to the extent compliance
therewith can be demonstrated and if required by applicable law;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the use
of a leasehold estate for residential properties is a widely-accepted practice,
that consists of one or more separate and complete tax parcels of real property
improved by a Residential Dwelling; provided, however, that any condominium unit
or planned unit development (other than a de minimis planned unit development)
shall conform with the Underwriting Guidelines. In the case of any Mortgaged
Properties that are Manufactured Homes (a "Manufactured Home Mortgage Loans"),
(i) the related manufactured dwelling is permanently affixed to the land, (ii)
the related manufactured dwelling and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming Seller as
mortgagee, (iii) the applicable laws of the jurisdiction in which the related
Mortgaged Property is located will deem the manufactured dwelling located on
such Mortgaged Property to be a part of the real property on which such dwelling
is located, and (iv) such Manufactured Home Mortgage Loan is (x) a qualified
mortgage under Section 860G(a)(3) of the Internal Revenue Code of 1986, as
amended and (y) secured by manufactured housing treated as a single family
residence under Section 25(e)(10) of the Code. No portion of the Mortgaged
Property is used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not be
considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the Mortgaged Properties are log
homes, mobile homes, geodesic domes or other unique property types;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting
and enforceable first lien (with respect to a First Lien Loan) or second lien
(with respect to a Second Lien Loan) on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to (collectively, the "Permitted Exceptions"):
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and which do not adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) and first priority (with
respect to a First Lien Loan) or second priority (with respect to a Second Lien
Loan) security interest on the property described therein and the Seller has
full right to sell and assign the same to the Purchaser subject to the Permitted
Exceptions;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to prepayment
penalties), subject to bankruptcy, equitable principles and laws affecting
creditor rights. All parties to the Mortgage Note, the Mortgage and any other
such related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. Notwithstanding the foregoing, but without
limiting the other representations and warranties set forth elsewhere in this
Agreement, if any error, omission or negligence in the origination of such
Mortgage Loan occurred despite Seller's conformance with its Underwriting
Guidelines (as in effect at the time such Mortgage Loan was made), then there
shall be a presumptive conclusion that there was no error, omission or
negligence. No fraud, misrepresentation, or similar occurrence or, to Seller's
knowledge, error, omission, or negligence with respect to a Mortgage Loan has
taken place on the part of any Person (other than Seller), including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application for
any insurance in relation to such Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. Upon payment of the Purchase Price, the Seller is the
sole owner of record and holder of the Mortgage Loan and the indebtedness
evidenced by each Mortgage Note and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files or any part thereof with
respect thereto not delivered to the Custodian, the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. Upon payment of the Purchase Price, the
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. From
and after the related Closing Date, the Seller intends to relinquish all rights
to possess, control and monitor the Mortgage Loan. After the related Closing
Date, the Seller will have no right to modify or alter the terms of the sale of
the Mortgage Loan and the Seller will have no obligation or right to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as provided in
this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located to the extent required to ensure
enforceability of the Mortgage Loan, and (2) either (i) organized under the laws
of such state, or (ii) qualified to do business in such state, or (iii) a
federal savings and loan association, a savings bank or a national bank having a
principal office in such state, or (3) not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV or a CLTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable pursuant to Seller's Underwriting Guidelines and each such title
insurance policy is issued by a title insurer acceptable to prudent lenders in
the secondary mortgage market and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first (with respect to a First Lien Loan) or second (with
respect to a Second Lien Loan) priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (or to the extent a Mortgage Note provides
for negative amortization, the maximum amount of negative amortization in
accordance with the Mortgage), subject only to the exceptions contained in
clauses (A), (B) and (C) of paragraph (j) of this Subsection 9.02, and in the
case of Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where required by state law or regulation, the Mortgagor has been given
the opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The Seller, its successor and assigns, are the sole insureds
of such lender's title insurance policy, and such lender's title insurance
policy is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims have been made under such lender's title insurance policy, and no
prior holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. There is no default, breach, violation or event
which would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority, except with respect to a Mortgage Loan purchased from a
correspondent as indicated on the Mortgage Loan Schedule. Principal payments on
the Mortgage Loan commenced no more than seventy days after funds were disbursed
in connection with the Mortgage Loan. The Mortgage Interest Rate as well as, in
the case of an Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the
Periodic Cap are as set forth on the related Mortgage Loan Schedule. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Note is
payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgage Loan is payable on the first day of each month and the Mortgage
Loan does not require a balloon payment on its stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines,
as may be amended from time to time by the Seller (a copy of which is attached
to each related Assignment and Conveyance Agreement). The Mortgage Note and
Mortgage are on forms acceptable to prudent mortgage lenders in the secondary
mortgage market and no representations have been made to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. 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 but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) [Reserved].
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under this Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated Mortgage Loans, the Assignment of Mortgage with respect to each
Mortgage Loan is in recordable form and is acceptable for recording under the
laws of the jurisdiction in which the Mortgaged Property is located. The
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller are not subject to the bulk transfer or similar statutory provisions
in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an provision for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the mortgagee
thereunder, and to the best of the Seller's knowledge, such provision is
enforceable subject to applicable bankruptcy, equitable principles and laws
affecting creditors' rights;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to prudent mortgage
lenders in the secondary market. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or, to Seller's knowledge, threatened for the
total or partial condemnation of the Mortgaged Property. The Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in at least the same condition or
better than its condition at the time of its appraisal. Since the time of its
appraisal, there have not been any condemnation proceedings with respect to the
Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Interim Servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Interim Servicer and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Interim Servicer executed and delivered any and
all notices required under applicable law and the terms of the related Mortgage
Note and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on or
prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due thereunder to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. To the best of the Seller's
knowledge, (i) there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; and (ii) there is no violation of any environmental law,
rule or regulation with respect to the Mortgage Property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser who had no interest, direct or indirect in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfy the requirements of Seller's
Underwriting Guidelines and Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) Credit Reporting. The Seller (or its sub-servicer) has caused
to be fully furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis;
(ss) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with respect to
each MERS Designated Mortgage Loan;
(tt) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim Funder on
the MERS(R) System;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, such lease conforms to the requirements required by Xxxxxx Xxx pursuant
to the Xxxxxx Xxx Guide;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan. No Mortgage Loan is covered by the Home Ownership and Equity Protection
Act of 1994 and no Mortgage Loan is in violation of any comparable state or
local law;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of any Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by Fidelity National Tax
Service, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not been previously
rejected by a third-party purchaser;
(iii) Georgia Fair Lending Act. There is no Mortgage Loan that was
originated on or after October 1, 2002 and on or prior to March 7, 2003, which
is secured by property located in the State of Georgia. There is no Mortgage
Loan that was originated after March 7, 2003, which is a "high-cost home loan"
as defined under the Georgia Fair Lending Act;
(jjj) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of Xxxxxx Xxx Guides;
(kkk) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Seller which is a higher cost
product designed for less creditworthy mortgagors, unless at the time of the
Mortgage Loan's origination, such Xxxxxxxxx did not qualify taking into account
credit history and debt-to-income ratios for a lower-cost credit product then
offered by the Seller or any Affiliate of the Seller. If, at the time of loan
application, the Mortgagor may have qualified for a lower-cost credit product
then offered by any mortgage lending Affiliate of the Seller, the Seller
referred the related Mortgagor's application to such Affiliate for underwriting
consideration;
(lll) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor'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 (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(mmm) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium upon
a prepayment prior to maturity: (i) prior to the Mortgage Loan's origination,
the related Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the Mortgage
Loan's origination, the related Mortgagor was offered the option of obtaining a
mortgage loan that did not require payment of such a premium; provided, that
such offer may have been evidenced by the Seller's rate sheet/pricing grid
relating to such Mortgage Loan, which provided that the Mortgage Loan had a full
prepayment premium buy-out pricing adjustment available, (iii) the prepayment
premium is disclosed to the related Mortgagor in the Mortgage Loan documents
pursuant to applicable state and federal law, and (iv) notwithstanding any state
or federal law to the contrary, the Seller, as servicer, shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the related Mortgagor's default in making the Mortgage Loan payments;
(nnn) Purchase of Insurance. No Mortgagor was required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan. 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, such Mortgage Loan;
(ooo) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except (i) as set forth on the related
Mortgage Loan Schedule and (ii) in the case of a Mortgage Loan in an original
principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no Mortgagor was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such
Mortgage Loan, such 5% limitation is calculated in accordance with Xxxxxx Xxx's
anti-predatory lending requirements as set forth in the Xxxxxx Xxx Guides;
(ppp) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation; and
(qqq) [Reserved].
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser therein
(or which materially and adversely affects the value of the applicable Mortgage
Loan or the interest of the Purchaser therein in the case of a representation
and warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, the Seller shall
use commercially reasonable efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Paragraph (rr), (zz), (aaa), (bbb), (ccc), (iii), (jjj),
(kkk), (lll), (mmm), (nnn), (ooo) and (ppp) of Subsection 9.02, the Seller shall
repurchase such Mortgage Loan at the Repurchase Price. In the event that a
breach shall involve any representation or warranty set forth in Subsection
9.01, and such breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the Seller of such breach, all of the Mortgage Loans
affected by such breach shall, at the Purchaser's option, be repurchased by the
Seller at the Repurchase Price. However, if the breach shall involve a
representation or warranty set forth in Subsection 9.02 (except as provided in
the second sentence of this paragraph with respect to certain breaches for which
no substitution is permitted) and the Seller discovers or receives notice of any
such breach within 120 days of the related Closing Date, the Seller shall, at
the Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the related Closing
Date. If the Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan at the Repurchase Price. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this
Subsection 9.03 shall be accomplished by either (a) if the Interim Servicing
Agreement has been entered into and is in effect, deposit in the Custodial
Account of the amount of the Repurchase Price for distribution to the Purchaser
on the next scheduled Remittance Date, after deducting therefrom any amount
received in respect of such repurchased Mortgage Loan or Loans and being held in
the Custodial Account for future distribution or (b) if the Interim Servicing
Agreement has not been entered into or is no longer in effect, by direct
remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 with the Mortgage Note endorsed as required by Subsection 6.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Seller shall cause the Interim Servicer to remit directly to the
Purchaser, or its designee in accordance with the Purchaser's instructions the
Monthly Payment less the Servicing Fee due, if any, on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution shall be retained by the Seller. For the month of
substitution, distributions to the Purchaser shall include the Monthly Payment
due on any Deleted Mortgage Loan in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received by the
Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and expenses and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and Successor Servicer as provided in this
Subsection 9.03 and in Subsection 14.01 constitute the sole remedies of the
Purchaser respecting a breach of the foregoing representations and warranties.
For purposes of this paragraph "Purchaser" shall mean the Person then acting as
the Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and all
Persons who previously were "Successor Servicers" pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults. With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan, or (ii) after the related Closing Date is not paid within
sixty (60) days of the related Due Date, the Seller, at the Purchaser's option,
shall repurchase such Mortgage Loan from the Purchaser at the Repurchase Price.
The Seller shall repurchase such delinquent Mortgage Loan within thirty (30)
days of such request unless the Seller can provide evidence reasonably
acceptable to the Purchaser in its good faith discretion that such delinquency
was due to a servicing error.
Notwithstanding the foregoing, the Purchaser may, in its sole
discretion, elect to submit for the Seller's consideration a revised Purchase
Price Percentage (as defined in the related Purchase Price and Terms Agreement)
(in each case, a "Revised Pricing Offer") with respect to any such Mortgage
Loan. Thereafter, the Seller shall accept or reject such Revised Pricing Offer.
In the event the Seller rejects a Revised Pricing Offer, the applicable Mortgage
Loan shall be repurchased pursuant to the previous paragraph. In the event the
Seller accepts a Revised Pricing Offer with respect to any such Mortgage Loan
(such loan, a "Repriced Mortgage Loan") the Seller shall refund to the Purchaser
an amount equal to (i) the product of (x) the difference between the original
related Purchase Price Percentage and (y) the applicable Revised Pricing Offer,
and (ii) the outstanding principal balance of such Repriced Mortgage Loan as of
the related Cut-off Date (such product, in each case, the "Repricing
Adjustment"), plus accrued interest on such Repricing Adjustment calculated at
the federal funds rate as of the related Closing Date. Such amount shall be paid
by the Seller to the Purchaser within thirty (30) days thereof.
Subsection 9.05 Premium Recapture. With respect to any Mortgage Loan
without a prepayment penalty, in the event that any such Mortgage Loan prepays
in full during the first three months following the related Closing Date, the
Seller shall pay the Purchaser, within ten (10) Business Days of such prepayment
in full, an amount equal to the product of the applicable percentage of par as
stated in the related Purchase Price and Terms Agreement (subject to adjustment
as provided therein) and the Stated Principal Balance of such Mortgage Loan as
of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette, or transmit
by modem, a listing on a loan-level basis of the necessary information to
compute the Purchase Price of the Mortgage Loans delivered on such Closing
Date (including accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Interim Servicer under the Interim Servicing
Agreement (with respect to each Mortgage Loan for an interim period, as
specified therein) shall be true and correct as of the related Closing
Date and no event shall have occurred which, with notice or the passage of
time, would constitute a default under this Agreement or an Event of
Default under the Interim Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents as
specified in Section 11 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to this Agreement; and
(v) all other terms and conditions of this Agreement and the related
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
(1) this Agreement (to be executed and delivered only
for the initial Closing Date);
(2) the Interim Servicing Agreement, dated as of the
initial Cut-off Date (to be executed and delivered only for
the initial Closing Date);
(3) the related Mortgage Loan Schedule (one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
(4) a Custodian's Certification, as required under the
Custodial Agreement, in the form of [Exhibit 2] to the
Custodial Agreement;
(5) with respect to the initial Closing Date, an
Officer's Certificate, in the form of Exhibit C hereto with
respect to each of the Seller, including all attachments
thereto; with respect to subsequent Closing Dates, an
Officer's Certificate upon request of the Purchaser;
(6) with respect to the initial Closing Date, an Opinion
of Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit D hereto ("Opinion of Counsel
of the Seller"); with respect to subsequent Closing Dates, an
Opinion of Counsel of the Seller upon request of the
Purchaser;
(7) with respect to the initial Closing Date, an Opinion
of Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(8) a Security Release Certification, in the form of
Exhibit E or F, as applicable, hereto executed by any person,
as requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest, pledge
or hypothecation for the benefit of such person;
(9) a certificate or other evidence of merger or change
of name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by the
Seller by merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
(10) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto;
(11) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and
with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance; and
(12) a MERS Report reflecting the Purchaser as Investor,
the Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Xxx Transfer"); or
(ii) Freddie Mac (the "Freddie Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller, on behalf of itself and the Interim Servicer, agrees to
execute in connection with any Agency Transfer, any and all pool purchase
contracts, and/or agreements reasonably acceptable to the Seller and the Interim
Servicer, if applicable, among the Purchaser, the Seller and/or the Interim
Servicer, Xxxxxx Xxx or Freddie Mac (as the case may be) and any servicer in
connection with a Whole Loan Transfer, a seller's warranties and servicing
agreement or a participation and servicing agreement in form and substance
reasonably acceptable to the parties, and in connection with a Securitization
Transfer, a pooling and servicing agreement in form and substance reasonably
acceptable to the parties or an Assignment and Recognition Agreement
substantially in the form attached hereto as Exhibit I (collectively, the
agreements referred to herein as designated, the "Reconstitution Agreements"),
together with an opinion of counsel with respect to such Reconstitution
Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller, on behalf of itself and the
Interim Servicer, agrees (1) to cooperate fully with the Purchaser and any
prospective purchaser with respect to all reasonable requests and due diligence
procedures; (2) to execute, deliver and perform all Reconstitution Agreements
reasonably required by the Purchaser (provided Seller and Interim Servicer, if
applicable, shall be given adequate time to review and negotiate in good faith
such agreements); and (3) to restate the representations and warranties set
forth in Subsections 9.01 and 9.02 as of the Reconstitution Date or make the
representations and warranties set forth in the related selling/servicing guide
of the servicer or issuer, as the case may be, or such representations or
warranties as may be required by any rating agency or prospective purchaser of
the related securities or such Mortgage Loans in connection with such
Reconstitution. The Seller and the Interim Servicer shall provide to such
servicer or issuer, as the case may be, and any other participants or purchasers
in such Reconstitution: (i) any and all information and appropriate verification
of information which may be reasonably available to the Seller, the Interim
Servicer or their affiliates, whether through letters of its auditors and
counsel or otherwise, as the Purchaser or any such other participant shall
request; (ii) such additional representations, warranties, covenants, opinions
of counsel, letters from auditors, and certificates of public officials or
officers of the Seller or the Interim Servicer as are reasonably believed
necessary by the Purchaser or any such other participant; and (iii) to execute,
deliver and satisfy all conditions set forth in any indemnity agreement required
by the Purchaser or any such participant, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit B as agreed upon by the parties thereto. Moreover, the Seller,
on behalf of itself and the Interim Servicer, agrees to cooperate with all
reasonable requests made by the Purchaser to effect such Reconstitution
Agreements. The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser participating in the Reconstitution and each Person who controls the
Purchaser or such affiliate and their respective present and former directors,
officers, employees and agents, and hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that each of them may sustain arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
information provided by or on behalf of the Seller regarding the Seller, the
Mortgage Loans or the Underwriting Guidelines set forth in any offering document
prepared in connection with any Reconstitution. For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement.
The Purchaser will reimburse to the Seller up to $15,000 of the
Seller's out-of-pocket expenses incurred in connection with a Securitization
Transfer.
In the event the Purchaser has elected to have the Seller or the
Interim Servicer hold record title to the Mortgages, prior to the Reconstitution
Date, the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the Interim
Servicer, as applicable, acceptable to the prospective purchaser or trustee, as
applicable, for each Mortgage Loan that is part of the Reconstitution and shall
pay all preparation and recording costs associated therewith. In connection with
the Reconstitution, the Seller shall execute or shall cause the Interim Servicer
to execute each assignment of mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the prospective
purchaser or trustee, as applicable, upon the Seller's receipt thereof.
Additionally, the Seller shall prepare and execute or shall cause the Interim
Servicer to execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and expenses (including legal
fees and expenses incurred in connection with the enforcement of the Seller's
indemnification obligation under this Subsection 14.01) and related costs,
judgments, and any other costs, fees and expenses that such parties may sustain
in any way related to the failure of the Seller to perform its duties and the
Interim Servicer to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13 or any breach of any of Seller's representations, warranties and
covenants set forth in this Agreement (provided that such costs shall not
include any lost profits or special or consequential damages). Except as set
forth above, the Seller shall not be liable to any Person for any action taken
or omitted to be taken by it hereunder in good faith and believed by it to be
within the purview of this Agreement. For purposes of this paragraph "Purchaser"
shall mean the Person then acting as the Purchaser under this Agreement and any
and all Persons who previously were "Purchasers" under this Agreement and
"Successor Servicer" shall mean any Person designated as the Successor Servicer
pursuant to this Agreement and any and all Persons who previously were
"Successor Servicers" pursuant to this Agreement.
(b) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 14.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have to
any indemnified party under this Subsection 14.01, except to the extent that it
has been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Subsection 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
(c) The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its obligation
to sell or duty to service the Mortgage Loans in accordance with this Agreement
and which in its opinion may result in its incurring any expenses or liability;
provided, however, that the Seller may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities for which the Purchaser shall
be liable, and the Seller shall be entitled to reimbursement therefor from the
Purchaser upon written demand except when such expenses, costs and liabilities
are subject to the Seller's indemnification under Subsections 14.01(a) or
14.01(b).
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
WMC Mortgage Corp.
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
Facsimile: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent shall not be unreasonably withheld, conditioned or delayed. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. In the event the Purchaser assigns this Agreement, and the
assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or subsidiaries, or by any independent contractors on the Seller's
behalf, to personally, by telephone or mail (via electronic means or otherwise),
solicit a Mortgagor under any Mortgage Loan for the purpose of refinancing a
Mortgage Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed that the
Seller, or any of its respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it has
available for such refinancings, through the sending of letters or
promotional material, so long as it does not specifically target
Mortgagors and so long as such promotional material either is sent to the
mortgagors for all of the mortgages in the servicing portfolio of the
Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their mortgages by
advising them of refinancing terms and streamlined origination
arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Governing Law Jurisdiction; Consent to Service of
Process. THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER
IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
[Signature Page Follows]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
(Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WMC MORTGAGE CORP.
(Seller)
By:
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in
the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage
Notes for endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Custodian is so advised by the Seller that
state law so allows. If the Mortgage Loan was acquired by the Seller in a
merger, the endorsement must be by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated
by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to
be delivered the original Mortgage with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such Mortgage has
been dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law
or commonly required by private institutional mortgage investors in the
area where the Mortgaged Property is located or on direction of the
Purchaser as provided in this Agreement. If the Assignment of Mortgage is
to be recorded, the Mortgage shall be assigned to the Purchaser. If the
Assignment of Mortgage is not to be recorded, the Assignment of Mortgage
shall be delivered in blank. If the Mortgage Loan was acquired by the
Seller in a merger, the Assignment of Mortgage must be made by "[Seller],
successor by merger to [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another
name, the Assignment of Mortgage must be by "[Seller], formerly known as
[previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or MERS, with respect to each MERS Designated Mortgage Loan)
with evidence of recording thereon, or if any such intervening assignment
has not been returned from the applicable recording office or has been
lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered
to the Custodian, a photocopy of such intervening assignment, together
with (i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the Seller (or certified by the title company,
escrow agent, or closing attorney) stating that such intervening
assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is
lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a
true and complete copy of the original recorded intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a true copy of the
related policy binder or commitment for title issued by the title
insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power
certified by the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 120 days of the related Closing Date, an Officer's Certificate which
shall (i) identify the recorded document, (ii) state that the recorded document
has not been delivered to the Custodian due solely to a delay caused by the
public recording office, (iii) state the amount of time generally required by
the applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document is
expected to be delivered to the Custodian; provided, however, that any recorded
document shall in no event be delivered later than one year following the
related Closing Date. An extension of the date specified in clause (iv) above
may be requested from the Purchaser, which consent shall not be unreasonably
withheld.
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the "Depositor"),
[______________], a [______________] (the "Underwriter"), and WMC Mortgage
Corp., a [______________] corporation (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party and the Depositor are parties to the
Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party "The Mortgage Loan
Pool--Underwriting Guidelines" and (ii) regarding the Mortgage Loans, the
related mortgagors and/or the related Mortgaged Properties (but in the case of
this clause (ii), only to the extent any untrue statement or omission arose from
or is based upon errors or omissions in the information concerning the Mortgage
Loans, the related mortgagors and/or the related Mortgaged Properties, as
applicable, provided to the Depositor or any affiliate by or on behalf of the
Indemnifying Party).
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the Indemnifying
Party, as responsible party and servicer, and [______________].
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates.
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to the
Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__], Class [__],
Class [__], Class [__], Class [__] and Class [__] issued pursuant to the Pooling
and Servicing Agreement.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, among the Depositor and the Underwriter, relating to the sale
of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered
by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor and the Underwriter and their respective affiliates, and their
respective present and former directors, officers, employees, agents and each
Person, if any, that controls the Depositor, the Underwriter or such affiliate,
within the meaning of either the 1933 Act or the 1934 Act (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages, penalties,
fines, forfeitures or liabilities, joint or several, to which each such
Indemnified Party may become subject, under the 1933 Act, the 1934 Act or
otherwise, to the extent that such losses, claims, damages, penalties, fines,
forfeitures or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement, the Private Placement Memorandum or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to information set forth in the Indemnifying Party Information, and the
Indemnifying Party shall in each case reimburse each Indemnified Party for any
legal or other costs, fees, or expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such loss, claim,
damage, penalty, fine, forfeiture, liability or action. [The Indemnifying
Party's liability under this Section 3.1 shall be in addition to any other
liability that the Indemnifying Party may otherwise have.]
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[______________]
[______________]
[______________]
Attention:
Telephone:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[______________]
[______________]
[______________]
Attention:
Telephone:
In the case of the Indemnifying Party:
WMC Mortgage Corp.
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:
------------------------------------
Name:
Title:
[UNDERWRITER]
By:
------------------------------------
Name:
Title:
WMC MORTGAGE CORP.
By:
------------------------------------
Name:
Title:
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], corporation organized under the
laws of the [state of ____________] [United States] (the "Company") and further
as follows:
(i) Attached hereto as Exhibit 1 is a true, correct and
complete copy of the charter of the Company which is in full force
and effect on the date hereof.
(ii) Attached hereto as Exhibit 2 is a true, correct and
complete copy of the bylaws of the Company which are in effect on
the date hereof.
(iii) Attached hereto as Exhibit 3 is an original certificate
of good standing of the Company issued within ten days of the date
hereof, and no event has occurred since the date thereof which would
impair such standing.
(iv) Attached hereto as Exhibit 4 is a true, correct and
complete copy of the corporate resolutions of the Board of Directors
of the Company authorizing the Company to execute and deliver (a)
the Mortgage Loan Purchase and Warranties Agreement, dated as of
_______ __, 200_ (the "Purchase Agreement"), by and between Xxxxxx
Xxxxxxx Mortgage Capital Inc. (the "Purchaser") and the Company and
(b) the Interim Servicing Agreement, dated as of _______ __, 200_
(the "Interim Servicing Agreement"), by and between the Purchaser
and ___________ (the "Interim Servicer"), and such resolutions are
in effect on the date hereof.
(v) Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or compliance
by the Company with the Purchase Agreement, [the sale of the
mortgage loans] or the consummation of the transactions contemplated
by the agreements; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
(vi) Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Purchase Agreement
conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the
charter or by-laws of the Company or, to the best of my knowledge,
the terms of any indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which it is
subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or
regulatory body to which the Company is subject or by which it is
bound.
(vii) To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the
Company which, in my judgment, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of
the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted
or in any material liability on the part of the Company or which
would draw into question the validity of the Purchase Agreement, or
the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would
be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
(viii) Each person listed on Exhibit 5 attached hereto who, as
an officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date
hereof in connection with any purchase described in the agreements
set forth above was, at the respective times of such signing and
delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the
office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their
genuine signatures.
(ix) The Company is duly authorized to engage in the
transactions described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
Xxxx Xxxxxxx Executive Vice President
-------------------------- --------------------------- -----------------------
Xxxx Xxxxxx Executive Vice President
-------------------------- --------------------------- -----------------------
Xxxxx Xxxxxxxxx Executive Vice President
-------------------------- --------------------------- -----------------------
Executive Vice
Xxxxxx Xxxxxxxxx President/General Counsel
-------------------------- --------------------------- -----------------------
Xxxxx Xxxxxxxx Senior Vice President
-------------------------- --------------------------- -----------------------
-------------------------- --------------------------- -----------------------
-------------------------- --------------------------- -----------------------
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(to be inserted)
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
Xxxxxx Xxxxxxx Mortgage Capital Inc. under a Mortgage Loan Purchase and
Warranties Agreement. The Company warrants that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
____________________________
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
__________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the next page (the "Company") pursuant to that certain Mortgage Loan Purchase
and Warranties Agreement, dated as of ______ __, 200_, and certifies that all
notes, mortgages, assignments and other documents in its possession relating to
such Mortgage Loans have been delivered and released to the Company or its
designees, as of the date and time of the sale of such Mortgage Loans to Xxxxxx
Xxxxxxx Mortgage Capital Inc. Such release shall be effective automatically
without any further action by any party upon payment in one or more
installments, in immediately available funds, of $_____________, in accordance
with the wire instructions set forth below.
Name, Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
________________________________
________________________________
________________________________
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
________________________________
By:_____________________________
Title:__________________________
Date:___________________________
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this __th day of ____, 200_, WMC Mortgage Corp. ("Seller"), as
the Seller under (i) that certain Purchase Price and Terms Agreement, dated as
of _____, 200_ (the "PPTA"), (ii) that certain Mortgage Loan Purchase and
Warranties Agreement, dated as of April 1, 2004 (the "Purchase Agreement"), and
(iii) that certain Interim Servicing Agreement, dated as of April 1, 2004 (the
"Interim Servicing Agreement" and, together with the PPTA and the Purchase
Agreement, the "Agreements") does hereby sell, transfer, assign, set over and
convey to Xxxxxx Xxxxxxx Mortgage Capital, Inc. ("Purchaser") as the Purchaser
under the Agreements without recourse, but subject to the terms of the
Agreements, all right, title and interest of, in and to the Mortgage Loans
listed on the Mortgage Loan Schedule attached hereto as Exhibit A (the "Mortgage
Loans"), together with the Mortgage Files and the related Servicing Rights and
all rights and obligations arising under the documents contained therein. Each
Mortgage Loan subject to the Agreements was underwritten in accordance with, and
conforms to, the Underwriting Guidelines attached hereto as Exhibit C. Pursuant
to Section 6 of the Purchase Agreement, the Seller has delivered to the
Custodian the documents for each Mortgage Loan as set forth in the Purchase
Agreement. The contents of each Servicing File required to be retained by WMC
Mortgage Corp. or its designee, as interim servicer ("Interim Servicer") to
service the Mortgage Loans pursuant to the Interim Servicing Agreement and thus
not delivered to the Purchaser are and shall be held in trust by the Interim
Servicer in its capacity as interim servicer for the benefit of the Purchaser as
the owner thereof. The Interim Servicer's possession of any portion of the
Servicing File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Interim
Servicing Agreement, and such retention and possession by the Interim Servicer
shall be in a custodial capacity only. The ownership of each Mortgage Note,
Mortgage and the contents of the Mortgage File and Servicing File is vested in
the Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Seller or the Interim Servicer shall immediately vest in the Purchaser and shall
be retained and maintained, in trust, by the Seller at the will of the Purchaser
in such custodial capacity only.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing, the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
WMC MORTGAGE CORP.
By:____________________________________
Name: _____________________________
Title: ____________________________
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:_________________________________
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
[to be provided under separate cover by Xxxxxxxxx as agreed to by Xxxxxx]
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT H
UNDERWRITING GUIDELINES
Exhibit I
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase Agreement (the "Purchase Agreement"), dated as of [DATE], between the
Assignor, as purchaser (the "Purchaser"), and the Company, as seller, solely
insofar as the Purchase Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans to the
same extent as Assignor would have been able to enforce such obligations, and
(iv) all references to the Purchaser, the Custodian or the Bailee under the
Purchase Agreement insofar as they relate to the Mortgage Loans, shall be deemed
to refer to the Trust (including the Trustee and the Servicer acting on the
Trust's behalf). From the date hereof, neither the Company nor the Assignor
shall amend or agree to amend, modify, waiver, or otherwise alter any of the
terms or provisions of the Purchase Agreement which amendment, modification,
waiver or other alteration would in any way affect the Mortgage Loans or the
Company's performance under the Purchase Agreement with respect to the Mortgage
Loans without the prior written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or, to
the Company's knowledge, threatened against the Company, before any
court, administrative agency or other tribunal, which would draw
into question the validity of this Agreement or the Purchase
Agreement, or which, either in any one instance or in the aggregate,
would result in any material adverse change in the ability of the
Company to perform its obligations under this Agreement or the
Purchase Agreement, and the Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that, other than ______, the representations and warranties set
forth in Section 9.02 of the Purchase Agreement are true and correct as of the
date hereof as if such representations and warranties were made on the date
hereof unless otherwise specifically stated in such representations and
warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
WMC MORTGAGE CORP.
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
ASSIGNEE
By:
------------------------------------
Name:
---------------------------------
Its:
----------------------------------
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXECUTION COPY
AMENDMENT NO. 1
AMENDMENT NO. 1, dated as of October 29, 2004 ("Amendment"), to the
Mortgage Loan Purchase and Warranties Agreement, dated as of April 1, 2004 (the
"Purchase Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a New
York corporation ("Xxxxxx Xxxxxxx"), and WMC MORTGAGE CORP., a California
corporation ("WMC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
(i) Section 1 is hereby amended by:
(a) inserting the following defined terms in alphabetical
order therein:
"Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary."
"Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary."
"Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time."
(b) adding the following language to the definition of "High
Cost Loan" following the words "and/or fees)" and prior to the ".":
"or (c) a Mortgage Loan categorized as High Cost pursuant to
Appendix E of Standard & Poor's Glossary"
(c) deleting the "and" prior to the "(50)" in the definition
of "Mortgage Loan Schedule" and adding the following language immediately
following the reference to "Subsection 9.02(ooo)" and prior to the "." in clause
(50) of such definition:
"and (51) a code indicating whether the Mortgage Loan is a Home
Loan"
(ii) Subsection 9.02 is hereby amended by:
(a) adding the following language to the end of the first
sentence of clause (aaa) following the word "Loan" and prior to the ".":
"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"
(b) deleting clause (iii) and replacing it with "[Reserved];"
and
(c) deleting the "[Reserved]" in clause (qqq) and replacing it
with the following:
"No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction."
(iii) Subsection 9.03 is hereby amended by:
(a) deleting the reference to "(iii)," in the second sentence
of the second paragraph; and
(b) adding a reference to clause (qqq) following the reference
to clause (ppp) in the second sentence of the second paragraph.
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
By:
------------------------------------
Name:
Title:
WMC MORTGAGE CORP.
By:
------------------------------------
Name:
Title:
EXECUTION COPY
AMENDMENT NO. 2
AMENDMENT NO. 2, dated as of February 28, 2005 ("Amendment"), to the
Mortgage Loan Purchase and Warranties Agreement, dated as of April 1, 2004, as
amended by Amendment No. 1 thereto, dated as of October 29, 2004 (the "Purchase
Agreement"), each between XXXXXX XXXXXXX MORTGAGE CAPITAL INC., a New York
corporation ("Xxxxxx Xxxxxxx"), and WMC MORTGAGE CORP., a California corporation
("WMC").
RECITALS
WHEREAS, the parties hereto have entered into the Purchase
Agreement;
WHEREAS, the parties hereto desire to modify the Purchase Agreement
as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Purchase Agreement are used herein as therein defined.
2. Amendments.
(i) Subsection 9.02 is hereby amended by:
(a) deleting clause (nnn) in its entirety and replacing it
with the following language:
"Purchase of Insurance. No Mortgagor was required to
purchase any single premium credit insurance policy (e.g.,
life, disability, property, accident, unemployment or health
insurance product) or debt cancellation agreement as a
condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single-premium credit insurance policy
(e.g., life, disability, property, 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 single premium credit
insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;"
(b) adding to clause (kkk) following the words "Affiliate of
the Seller" in the first and second sentences thereof the
following language:
"with which the Seller has a referral relationship or
mechanism in place"
3. Ratification of Agreement. Except as modified and expressly
amended by this Amendment, the Purchase Agreement is in all respects ratified
and confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
4. Counterparts. This Amendment may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
By:
------------------------------------
Name:
Title:
WMC MORTGAGE CORP.
By:
------------------------------------
Name:
Title:
EXHIBIT S
FREMONT AGREEMENTS
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated July 21, 2005
("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"), Xxxxxx
Xxxxxxx ABS Capital I Inc. ("Assignee") and Fremont Investment & Loan (the
"Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase and Warranties Agreement (the "Purchase Agreement"), dated as of May 1,
2005, between the Assignor, as purchaser (the "Purchaser"), and the Company, as
seller, solely insofar as the Purchase Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to Xxxxxx Xxxxxxx ABS
Capital I Inc. Trust 2005-HE3 (the "Trust") created pursuant to a Pooling and
Servicing Agreement, dated as of July 1, 2005 (the "Pooling Agreement"), among
the Assignee, the Assignor, Deutsche Bank National Trust Company, as trustee
(including its successors in interest and any successor trustees under the
Pooling Agreement, the "Trustee"), HomEq Servicing Corporation, as servicer,
Countrywide Home Loans Servicing LP, as servicer, [JPMorgan Chase Bank, National
Association], as servicer, (including their successors in interest and any
successor servicer under the Pooling Agreement, the "Servicers"), WMC Mortgage
Corp., as responsible party, Decision One Mortgage Company LLC, as responsible
party, Accredited Home Lenders, Inc., as responsible party, NC Capital
Corporation, as responsible party (including their successors in interest and
any successor responsible party under the Pooling Agreement, the "Responsible
Parties"), Xxxxx Fargo Bank, National Association, as custodian and LaSalle Bank
National Association (including their successors in interest and an successor
custodian under the pooling agreement, the "Custodians"). The Company hereby
acknowledges and agrees that from and after the date hereof (i) the Trust will
be the owner of the Mortgage Loans, (ii) the Company shall look solely to the
Trust for performance of any obligations of the Assignor insofar as they relate
to the Mortgage Loans, (iii) the Trust (including the Trustee and the Servicer
acting on the Trust's behalf) shall have all the rights and remedies available
to the Assignor, insofar as they relate to the Mortgage Loans, under the
Purchase Agreement, including, without limitation, the enforcement of the
document delivery requirements set forth in Section 6 of the Purchase Agreement,
and shall be entitled to enforce all of the obligations of the Company
thereunder insofar as they relate to the Mortgage Loans, and (iv) all references
to the Purchaser, the Custodian or the Bailee under the Purchase Agreement
insofar as they relate to the Mortgage Loans, shall be deemed to refer to the
Trust (including the Trustee and the Servicer acting on the Trust's behalf).
Neither the Company nor the Assignor shall amend or agree to amend, modify,
waiver, or otherwise alter any of the terms or provisions of the Purchase
Agreement which amendment, modification, waiver or other alteration would in any
way affect the Mortgage Loans or the Company's performance under the Purchase
Agreement with respect to the Mortgage Loans without the prior written consent
of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Section 9.02
of the Purchase Agreement are true and correct as of the Securitization Closing
Date, as if such representations and warranties were made on the date hereof
unless otherwise specifically stated in such representations and warranties or
as limited in Exhibit B attached hereto.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.
By:
------------------------------------
Name:
Its:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:
------------------------------------
Name:
Its:
FREMONT INVESTMENT & LOAN
By:
------------------------------------
Name:
Its:
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Transfer Date Representations and Warranties
(1) Payments Current. All payments required to be made up to the related
Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan.
(2) No Outstanding Charges. There are no defaults in complying with the terms
of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground
rents which previously became due and owing have been paid, or an escrow
of funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is not yet
due and payable. The Seller 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
under the Mortgage Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date
of the first installment of principal and interest, including, without
limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan.
(3) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified in any respect, from
the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and
which has been delivered to the Custodian or to such other Person as the
Purchaser shall designate in writing, and the terms of which are reflected
in the related Mortgage Loan Schedule. The substance of any such waiver,
alteration or modification has been approved by the issuer of the title
insurer, if any, to the extent required by the policy, and its terms are
reflected on the related Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement, approved by the issuer of the title insurer,
to the extent required by the policy, and which assumption agreement is
part of the Mortgage Loan File delivered to the Custodian or to such other
Person as the Purchaser shall designate in writing and the terms of which
are reflected in the related Mortgage Loan Schedule.
(4) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, except as approved by a title insurer, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the performance by
the Mortgagor of any action, if the Mortgagor's failure to perform such
action would cause the Mortgage Loan to be in default, nor has the Seller
waived any default resulting from any action or inaction by the Mortgagor.
(5) No Defaults. Other than payments due but not yet one calendar month or
more delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective
predecessors, have waived any default, breach, violation or event which
would permit acceleration.
(6) No Mechanics' Liens. There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage, that are not
insured against by title insurance.
(7) Occupancy of the Mortgaged Property. As of the related origination date,
the Mortgaged Property is lawfully occupied under applicable law. 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 but not limited to
certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgagor represented
at the time of origination of the Mortgage Loan that the Mortgagor would
occupy the Mortgaged Property as the Mortgagor's primary residence.
(8) Mortgaged Property Undamaged; No Condemnation Proceedings. At the time of
origination and, to the Seller's knowledge, on the Closing Date, there
have not been any condemnation proceedings with respect to the Mortgaged
Property and there is no proceeding pending or, to the best of the
Seller's knowledge, threatened for the total or partial condemnation of
the Mortgaged Property. As of the related Closing Date, the Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the
use for which the premises were intended and each Mortgaged Property is in
good repair.
(9) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Seller with
respect to the Mortgage Loan have been in all respects in compliance with
Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not
been made. Each Mortgage Loan is covered by a paid in full, life of loan,
tax service contract. All Escrow Payments have been collected in full
compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by
applicable law and has been established, if applicable, in an amount
sufficient to pay for every item that remains unpaid and has been assessed
but is not yet due and payable. No escrow deposits or Escrow Payments or
other charges or payments due the Seller have been capitalized under the
Mortgage or the Mortgage Note.
With respect to each Adjustable Rate Mortgage Loan, all Mortgage
Interest Rate adjustments have been made in strict compliance with state
and federal law and the terms of the related Mortgage and Mortgage Note on
the related Interest Rate Adjustment Date. If, pursuant to the terms of
the Mortgage Note for an Adjustable Rate Mortgage Loan, another index was
selected for determining the Mortgage Interest Rate, the same index was
used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the
related Mortgage Note. The Seller executed and delivered any and all
notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and, with
respect to each Adjustable Rate Mortgage Loan, the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited.
(10) Other Insurance Policies. No action, inaction or event has occurred and no
state of facts exists or has existed that has resulted or will result in
the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy or bankruptcy bond,
irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had
a financial interest at the time of placement of such insurance.
(11) Escrow Analysis. With respect to each Mortgage, the Seller has within the
last twelve months (unless such Mortgage was originated within such twelve
month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required
payments are timely made, any deficiency will be eliminated on or before
the first anniversary of such analysis, or any overage will be refunded to
the Mortgagor, in accordance with RESPA and any other applicable law.
(12) No Defenses. The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation the defense
of usury, nor will the operation of any of the terms of the Mortgage Note
or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or federal
bankruptcy or insolvency proceeding at, or subsequent to, the time the
Mortgage Loan was originated.
EXECUTION COPY
================================================================================
MORTGAGE LOAN PURCHASE
AND WARRANTIES AGREEMENT
----------------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
FREMONT INVESTMENT & LOAN,
Seller
----------------------
Dated as of May 1, 2005
Conventional,
Fixed and Adjustable Rate, Subprime Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.....................................................
SECTION 2. AGREEMENT TO PURCHASE...........................................
SECTION 3. MORTGAGE SCHEDULES..............................................
SECTION 4. PURCHASE PRICE..................................................
SECTION 5. EXAMINATION OF MORTGAGE FILES...................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER.............................
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files...........................................
Subsection 6.02 Books and Records.........................................
Subsection 6.03 Delivery of Mortgage Loan Documents.......................
Subsection 6.04 Quality Control Procedures................................
Subsection 6.05 MERS Designated Mortgage Loans............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS.................................
SECTION 8. TRANSFER OF SERVICING...........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH.............................................
Subsection 9.01 Representations and Warranties Regarding the
Seller....................................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans.................................
Subsection 9.03 Remedies for Breach of Representations and
Warranties................................................
Subsection 9.04 Repurchase of Certain Mortgage Loans That Prepay
in Full...................................................
Subsection 9.05 Repurchase of Mortgage Loans With First Payment
Defaults..................................................
SECTION 10. CLOSING.........................................................
SECTION 11. CLOSING DOCUMENTS...............................................
SECTION 12. COSTS...........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION.....................
SECTION 14. THE SELLER......................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims..............................................
Subsection 14.02 Merger or Consolidation of the Seller.....................
SECTION 15. FINANCIAL STATEMENTS............................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST..................
SECTION 17. NOTICES.........................................................
SECTION 18. SEVERABILITY CLAUSE.............................................
SECTION 19. COUNTERPARTS....................................................
SECTION 20. GOVERNING LAW...................................................
SECTION 21. INTENTION OF THE PARTIES........................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT........
SECTION 23. WAIVERS.........................................................
SECTION 24. EXHIBITS........................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES.................................
SECTION 26. REPRODUCTION OF DOCUMENTS.......................................
SECTION 27. FURTHER AGREEMENTS..............................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE..........................
SECTION 29. NO SOLICITATION.................................................
SECTION 30. WAIVER OF TRIAL BY JURY.........................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS.............................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
MORTGAGE LOAN PURCHASE
AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of May 1, 2005, by and between Xxxxxx Xxxxxxx Mortgage
Capital Inc., a New York corporation, having an office at 0000 Xxxxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), and Fremont Investment &
Loan, a California state chartered industrial bank, having an office at 0000
Xxxx Xxxxxxxx Xxxxxxx, Xxxx, Xxxxxxxxxx 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain first and second lien, adjustable-rate and fixed-rate subprime
residential mortgage loans (the "Mortgage Loans") on a servicing released basis
as described herein, and which shall be delivered in pools of whole loans (each,
a "Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule for
the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, servicing by the Interim Servicer and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Mortgage Loan Purchase and Warranties Agreement, and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: The value of the related Mortgaged Property based
upon the appraisal made in connection with the origination of the related
Mortgage Loan or the sales price of the related Mortgaged Property at such time
of origination, whichever is less.
Assignment and Conveyance: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Certification: A final certification as to each Mortgage Loan, which
Certification is delivered to the Purchaser by the Custodian in the form annexed
to the Custodial Agreement.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package. The Closing Dates for each Mortgage Loan Package shall be
as respectively set forth on the related Mortgage Loan Schedule.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Custodial Account: The separate trust account created and maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The Custodial Agreement, dated as of December
1, 2004, as amended by Amendment No. 1, dated as of May 2, 2005, each between
the Purchaser and the Custodian, which governs the retention of the originals of
each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents.
Custodian: Xxxxx Fargo Bank, National Association, or its successor
in interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: The first day of the month in which the related
Closing Date occurs.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Due Date: The day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan, the period commencing on the day immediately succeeding the Due Date for
such Mortgage Loan occurring in the month preceding the month of the Remittance
Date and ending on the next Due Date.
Easy Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx
Xxx Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between November 26, 2003
and July 7, 2004) "high risk home," or "predatory" loan under any other
applicable federal, state or local law (or a similarly 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 and/or fees) or (c) categorized as High Cost pursuant to Appendix
E of Standard & Poor's Glossary. For avoidance of doubt, the parties agree that
this definition shall apply to any law regardless of whether such law is
presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on the related Mortgage Loan Schedule.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest or assigns, or any successor to the
Interim Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the related Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with the MERS Procedures Manual and (b) the Seller
has designated or will designate the Purchaser as the Investor on the MERS
System.
MERS Identification Number: The eighteen digit number permanently
assigned to each MERS Designated Mortgage Loan.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien in the case of a First Lien Loan, or a
second lien, in the case of a Second Lien Loan, on the Mortgaged Property on an
unsubordinated estate in fee simple in real property securing the Mortgage Note;
except that with respect to real property located in jurisdictions in which the
use of leasehold estates for residential properties is a widely-accepted
practice, the mortgage, deed of trust or other instrument securing the Mortgage
Note may secure and create a first lien upon a leasehold estate of the
Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number and type of residential units constituting the
Mortgaged Property; (7) the original months to maturity or the remaining months
to maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to each
First Lien Loan, the Loan-to-Value Ratio at origination, and with respect to
each Second Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate
as of the related Cut-off Date; (10) the date on which the Monthly Payment was
due on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (11) the stated maturity date; (12) the
first payment date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment was actually applied
to the outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17)
delinquency status as of the related Cut-off Date; (18) with respect to each
Adjustable Rate Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the
terms of the Mortgage Note; (21) with respect to each Adjustable Rate Mortgage
Loan, a code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (24) a code indicating the documentation style
(i.e., full, alternative or reduced); (25) [reserved]; (26) the loan credit
classification (as described in the Underwriting Guidelines); (27) whether such
Mortgage Loan provides for a Prepayment Penalty and, if applicable, the
Prepayment Penalty period; (28) a description of the Prepayment Penalty, if
applicable (29) the Mortgage Interest Rate as of origination; (30) the credit
risk score (FICO score); (31) the date of origination; (32) with respect to
Adjustable Rate Mortgage Loans, the Mortgage Interest Rate adjustment period;
(33) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate adjustment percentage; (34) with respect to each Adjustable Rate Mortgage
Loan, the Mortgage Interest Rate floor; (35) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate Cap as of the first Interest Rate
Adjustment Date; (36) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap subsequent to the first Interest Rate Adjustment Date; (37)
[reserved]; (38) [reserved]; (39) [reserved]; (40) [reserved]; (41) the Due Date
for the first Monthly Payment; (42) the original Monthly Payment due; (43)
[reserved]; (44) Appraised Value; (45) [reserved]; (46) [reserved]; (47)
appraisal date; (48) with respect to the related Mortgagor, the debt-to-income
ratio; and (49) the MERS Identification Number, if applicable. With respect to
the Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth
the following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; (4) the weighted average maturity of the Mortgage Loans; (5) the
applicable Cut-off Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) securing repayment of the debt
evidenced by the related Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Seller, will not or, in the case of a proposed advance, would not, be ultimately
recoverable from related Insurance Proceeds, Liquidation Proceeds or otherwise.
The determination by the Seller that it has made a Nonrecoverable Advance or
that any proposed advance of principal and interest, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers' Certificate delivered
to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any master
servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller or any master servicer of the Mortgage
Loans or in an Affiliate of either and (iii) is not connected with the Seller or
any master servicer of the Mortgage Loans as an officer, employee, director or
person performing similar functions.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Rate Cap for each Adjustable Rate Mortgage
Loan is the rate set forth on the related Mortgage Loan Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related Mortgage
Note or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Letter: Those certain letter agreements
setting forth the general terms and conditions of the transactions consummated
herein and identifying the Mortgage Loans to be purchased from time to time
hereunder, by and between the Seller and the Purchaser. All of the individual
Purchase Price and Terms Letters (if there are more than one) shall collectively
be referred to as the "Purchase Price and Terms Letter."
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its
successors in interest or assigns or any successor to the Purchaser under
this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller, who
had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation was not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfied the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9.
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer or a Securitization
Transfer pursuant to Section 13.
Reconstitution Date: As defined in Section 13.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and
Terms Letter.
RESPA: Real Estate Settlement Procedures Act, as amended from
time to time.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Fremont Investment & Loan, a California state chartered
industrial bank, its successors in interest and assigns.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Interim Servicer under the Interim Servicing Agreement. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, to the extent permitted by this Agreement)
of such Monthly Payment collected by the Interim Servicer, or as otherwise
provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of the Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Sections 9.03 and 14.01.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the related Purchase Price and Terms Letter.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit H and a then-current copy of which
shall be attached as an exhibit to the related Assignment and Conveyance.
Whole Loan Agreement: Any Reconstitution Agreement in respect of
a Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to
a Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Letter, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Letter and this Agreement (each, a "Preliminary Mortgage Schedule").
The Seller is obligated to deliver those Mortgage Loans funded by
the Seller pursuant to the original terms of the Seller's commitment to the
Mortgagor. The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser at
least two (2) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which the Seller has not funded prior to the related
Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Letter (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Letter, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans at the weighted average Mortgage Interest
Rate of those Mortgage Loans, net of the Servicing Fee, from the related Cut-off
Date through the day prior to the related Closing Date, inclusive. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
after the related Cut-off Date (provided, however, that all scheduled payments
of principal due on or before the related Cut-off Date and collected by the
Seller after the related Cut-off Date shall belong to the Seller), and (3) all
payments of interest on the Mortgage Loans (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date to the extent such payments were actually received.
Therefore, payments of scheduled principal and interest and Principal
Prepayments prepaid for a due date beyond the related Cut-off Date shall not be
applied to the principal balance as of the related Cut-off Date. Such prepaid
amounts shall be the property of the Purchaser. The Seller shall deposit any
such prepaid amounts into the custodial account, which account is established
for the benefit of the Purchaser for subsequent remittance by the Seller to the
Purchaser. All payments of principal and interest due on the first day of the
month after the related Cut-off Date shall belong to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
substantially all of the Mortgage Loans (with any remaining Mortgage Files
delivered within four (4) Business Days prior to the related Closing Date), or
(b) make the related Mortgage File available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans are unacceptable to the Purchaser for any
reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule. The Purchaser may, at its option and without notice to the Seller,
purchase some or all of the Mortgage Loans without conducting any partial or
complete examination. The fact that the Purchaser or its designee has conducted
or has failed to conduct any partial or complete examination of the Mortgage
Files shall not affect the Purchaser's (or any of its successor's) rights to
demand repurchase, substitution or other relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date shall execute and deliver an Assignment and Conveyance in the
form attached hereto as Exhibit G (the "Assignment and Conveyance"). The Seller
shall cause the Servicing File retained by it pursuant to this Agreement to be
appropriately identified in its computer system and/or books and records, as
appropriate, to clearly reflect the sale of the related Mortgage Loan to the
Purchaser. The Seller shall release from its custody the contents of any
Servicing File retained by it only in accordance with this Agreement, except
when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02. Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller after the related Cut-off Date
on or in connection with a Mortgage Loan shall be vested in the Purchaser or one
or more designees of the Purchaser; provided, however, that all funds received
on or in connection with a Mortgage Loan shall be received and held by the
Seller in trust for the benefit of the Purchaser or the appropriate designee of
the Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant
to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, according to Accepted Servicing Practices, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the National Flood Insurance Act of 1968, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports as would be customary for prudent originators of mortgage
loans similar to the Mortgage Loans. To the extent that original documents are
not required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Seller may be in the form of microfilm or
microfiche so long as the Seller complies with Accepted Servicing Practices or
any regulatory agency to which the Seller is subject or by which it is bound.
Subsection 6.03. Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
five (5) Business Days prior to each Closing Date substantially all of the
Mortgage Loan Documents set forth in Exhibit A hereto with respect to each
Mortgage Loan, set forth on the related Mortgage Loan Schedule with any
remaining Mortgage Loan Document delivered no later than four (4) Business Days
prior to the related Closing Date.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Certification of the Custodian in the
form annexed to the Custodial Agreement. The Purchaser shall pay all fees and
expenses of the Custodian from and after the related Closing Date.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within 150 days
following the related Closing Date.
In the event any document required to be delivered to the Custodian
pursuant to the previous paragraph, including an original or copy of any
document submitted for recordation to the appropriate public recording office,
is not so delivered to the Custodian, or to such other Person as the Purchaser
shall designate in writing, within 150 days following the related Closing Date
(other than with respect to the Assignments of Mortgage which shall be delivered
to the Custodian in blank and recorded subsequently by the Purchaser or its
designee), and in the event that the Seller does not cure such failure within 30
days of discovery or receipt of written notification of such failure from the
Purchaser, the related Mortgage Loan shall, upon the request of the Purchaser,
be repurchased by the Seller at the price and in the manner specified in
Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver such original or copy of any document
submitted for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; provided that the Seller shall instead deliver a recording receipt
of such recording office or, if such recording receipt is not available, an
officer's certificate of a servicing officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
related Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or
its designee said officer's certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04. Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies in a manner consistent with accepted industry procedures, on a regular
basis, the existence and accuracy of the legal documents, credit documents,
property appraisals, and underwriting decisions. The program shall include
evaluating and monitoring the overall quality of the Seller's loan production
and the servicing activities of the Seller. The program is to ensure that the
Mortgage Loans are originated and serviced in accordance with Accepted Servicing
Practices and the Underwriting Guidelines; guard against dishonest, fraudulent,
or negligent acts; and guard against errors and omissions by officers,
employees, or other authorized persons.
Subsection 6.05. MERS Designated Mortgage Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the Purchaser as the
Investor and the Custodian as custodian, and no Person shall be listed as
Interim Funder on the MERS System. In addition, on or prior to the related
Closing Date, the Seller shall provide the Custodian and the Purchaser with a
MERS Report listing the Purchaser as the Investor, the Custodian as custodian
and no Person as Interim Funder with respect to each MERS Designated Mortgage
Loan.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement. The Seller,
as interim servicer, shall execute the Interim Servicing Agreement on the
initial Closing Date.
Pursuant to the Interim Servicing Agreement, the Seller, as interim
servicer, shall begin servicing the Mortgage Loans on behalf of the Purchaser
and shall be entitled to a Servicing Fee with respect to such Mortgage Loans
until the applicable Transfer Date.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to the related Mortgage Loans
subject to such Transfer Date. The Transfer Date shall be the date as specified
in the related Purchase Price and Terms Letter.
On the related Transfer Date, the Seller, the Successor Servicer and
the Purchaser shall enter into an acknowledgement agreement in form and
substance satisfactory to the parties in which the Seller agrees, among other
things, to (i) comply with all servicing transfer provisions set forth in this
Agreement and the Interim Servicing Agreement, and (ii) recognize the Successor
Servicer as being entitled to the rights, benefits and indemnities provided to a
"Successor Servicer" in this Agreement and the Interim Servicing Agreement.
In addition, on or prior to the applicable Transfer Date, the Seller
shall, at its sole cost and expense, take such steps as may be necessary or
appropriate to effectuate and evidence the transfer of the servicing of the
related Mortgage Loans to the Purchaser, or its designee, including but not
limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser with copies of
all such related notices no later than the related Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Purchaser, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Purchaser from and after the related
Transfer Date. The Seller shall provide the Purchaser with copies of all such
notices no later than such Transfer Date.
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Seller's possession relating to each related Mortgage Loan.
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Seller.
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller on each related Mortgage Loan
shall be properly applied by the Seller to the account of the particular
Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt for
any payments received within thirty (30) days of the related Closing Date and
once a week for all payments received more than 30 days after the related
Closing Date, each next week thereafter. The Seller shall notify the Purchaser
of the particulars of the payment, which notification requirement shall be
satisfied if the Seller forwards with its payment sufficient information to
permit appropriate processing of the payment by the Purchaser. The Seller shall
assume full responsibility for the necessary and appropriate legal application
of such Monthly Payments received by the Seller after the Transfer Date with
respect to related Mortgage Loans then in foreclosure or bankruptcy; provided,
for purposes of this Agreement, necessary and appropriate legal application of
such Monthly Payments shall include, but not be limited to, endorsement of a
Monthly Payment to the Purchaser with the particulars of the payment such as the
account number, dollar amount, date received and any special Mortgagor
application instructions and the Seller shall comply with the foregoing
requirements with respect to all Monthly Payments received by the it after the
Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and
discovered after such Transfer Date shall immediately
notify the other party;
(iii) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied
payment has resulted in a shortage in a Custodial
Account or Escrow Account, the Seller shall be liable
for the amount of such shortage. The Seller shall
reimburse the Purchaser for the amount of such shortage
within thirty (30) days after receipt of written demand
therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as
the result of an inaccurate outstanding principal
balance, a check shall be issued to the party shorted by
the improper payment application within five (5)
Business Days after notice thereof by the other party;
and
(v) Any check issued under the provisions of this Section
8(h) shall be accompanied by a statement indicating the
corresponding Seller and/or the Purchaser Mortgage Loan
identification number and an explanation of the
allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed on or before the Transfer Date in
relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph. The
Purchaser shall file all such IRS forms which are required to be filed after the
Transfer Date.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01. Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a state chartered
industrial bank, duly organized, validly existing and in good standing under the
laws of the state of California and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in each state wherein it owns or leases any material properties or where a
Mortgaged Property is located, if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the Seller,
and in any event the Seller is in compliance with the laws of any such state to
the extent necessary to ensure the enforceability of the related Mortgage Loan
and the servicing of such Mortgage Loan in accordance with the terms of this
Agreement; the Seller has the full corporate power, authority and legal right to
hold, transfer and convey the Mortgage Loans and to execute and deliver this
Agreement and to perform its obligations hereunder; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Seller and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement and all agreements contemplated hereby have been duly executed and
delivered and constitute the valid, legal, binding and enforceable obligations
of the Seller, regardless of whether such enforcement is sought in a proceeding
in equity or at law; and all requisite corporate or other action has been taken
by the Seller to make this Agreement and all agreements contemplated hereby
valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(d) Ability to Service. Seller has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans. The Seller is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by the OTS, the OCC or the FDIC, and is in good standing
to enforce, originate, sell mortgage loans to, and service mortgage loans in
each jurisdiction wherein the Mortgaged Properties are located;
(e) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(f) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of Seller's knowledge, threatened against
the Seller, before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or which, either in any one
instance or in the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of the Seller,
or in any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of the Seller, or (iii) which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein or which would
be likely to impair the ability of the Seller to perform under the terms of this
Agreement;
(g) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the Department of Veterans Affairs is
required for the execution, delivery and performance by the Seller of or
compliance by the Seller with this Agreement or the Mortgage Loans, the delivery
of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage
Loans or the consummation of the transactions contemplated by this Agreement, or
if required, such approval has been obtained prior to the Closing Date;
(h) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made;
(i) No Untrue Information. No information, statement, tape,
diskette, report or other document furnished or to be furnished pursuant to this
Agreement or any Reconstitution Agreement or in connection with the transactions
contemplated hereby (including any Securitization Transfer or Whole Loan
Transfer) contains or will contain any untrue statement of fact or omits or will
omit to state a fact necessary to make the statements contained herein or
therein not misleading;
(j) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
of the United States consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience in respect of foreclosures
and its loan delinquency experience for the immediately preceding three-year
period, in each case with respect to mortgage loans owned by it and such
mortgage loans serviced for others during such period, and all such information
so delivered shall be true and correct in all material respects. There has been
no change in the business, operations, financial condition, properties or assets
of the Seller since the date of the Seller's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms requested by the Purchaser in
a timely manner and in accordance with the provided instructions;
(k) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(l) Sale Treatment. The Seller has been advised by its independent
certified public accountants that under generally accepted accounting principles
the transfer of the Mortgage Loans may be treated as a sale on the books and
records of the Seller and the Seller has determined that the disposition of the
Mortgage Loans pursuant to this Agreement will be afforded sale treatment for
tax and accounting purposes;
(m) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans;
(n) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Xxxxxx's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(o) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Xxxxxxxxx to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan; and
(q) Credit Reporting. The Seller, as servicer, will fully furnish,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis.
Subsection 9.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest, including, without limitation, taxes and insurance payments, the
Seller 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 under the Mortgage Loan;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the issuer of the title insurer, if any, to
the extent required by the policy, and its terms are reflected on the related
Mortgage Loan Schedule, if applicable. No Mortgagor has been released, in whole
or in part, except in connection with an assumption agreement, approved by the
issuer of the title insurer, to the extent required by the policy, and which
assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at, or
subsequent to, the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Underwriting Guidelines and by
lenders of similar mortgage loans in the secondary market. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration in effect which policy conforms to those
obtained by prudent mortgage lending institutions which originate mortgage loans
of the same type as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located. All individual insurance policies contain a
standard mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid and such policies may not be
reduced, terminated or cancelled without 30 days' prior written notice to the
mortgagee. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Xxxxxxxxx's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of such policy including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure and all predatory and abusive lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to the Illinois Interest Act and Prepayment Penalties, have been
complied with, the consummation of the transactions contemplated hereby will not
involve the violation of any such laws or regulations, and the Seller shall
maintain in its possession, available for the Purchaser's inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with all such
requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, except as approved by a title insurer, nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission. The Seller has not waived the performance by the Mortgagor of any
action, if the Mortgagor's failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Seller waived any default resulting
from any action or inaction by the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the related Mortgage Loan Schedule except
that with respect to real property located in jurisdictions in which the use of
leasehold estates for residential properties is a widely-accepted practice, the
mortgaged property may be a leasehold estate and consists of a single parcel of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual residential condominium unit in a
low-rise condominium project, or an individual unit in a planned unit
development; provided, however, that any condominium unit or planned unit
development shall conform with the Underwriting Guidelines. In the case of any
Mortgaged Properties that are manufactured homes (a "Manufactured Home Mortgage
Loans"), (i) such Manufactured Home Mortgage Loan conforms with the Underwriting
Guidelines, (ii) the related manufactured dwelling is permanently affixed to the
land, (iii) the related manufactured dwelling and the related land are subject
to a Mortgage properly filed in the appropriate public recording office and
naming Seller as mortgagee, (iv) the applicable laws of the jurisdiction in
which the related Mortgaged Property is located will deem the manufactured
dwelling located on such Mortgaged Property to be a part of the real property on
which such dwelling is located, and (v) such Manufactured Home Mortgage Loan is
(x) a qualified mortgage under Section 860G(a)(3) of the Code and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes;
(j) Valid First Lien or Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) on the Mortgaged
Property, including all buildings and improvements on the Mortgaged Property and
all installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all additions,
alterations and replacements made at any time with respect to the foregoing. The
lien of the Mortgage is subject only to:
(1) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with respect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. The documents,
instruments and agreements submitted for loan underwriting were not falsified
and contain no untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading; provided, however, in connection with
omissions by Xxxxxxxxxx, Seller shall only be responsible if it had or should
have had actual knowledge of any such omissions. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan or in the application for any
insurance in relation to such Mortgage Loan. The Seller has reviewed all of the
documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the Closing Date, the Seller will have no right to modify
or alter the terms of the sale of the Mortgage Loan and the Seller will have no
obligation or right to repurchase the Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy or
insurance acceptable to prudent originators of mortgage loans similar to the
Mortgage Loans and each such title insurance policy is issued by a title insurer
acceptable to prudent originators of mortgage loans similar to the Mortgage
Loans and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan (or to the extent a Mortgage Note provides for negative
amortization, the maximum amount of negative amortization in accordance with the
Mortgage), subject only to the exceptions contained in clauses (1), (2) and (3)
of paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The title policy does not contain any special exceptions (other than the
standard exclusions) for zoning and uses and has been marked to delete the
standard survey exception or to replace the standard survey exception with a
specific survey reading. The Seller, its successor and assigns, are the sole
insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Other than payments due but not yet one calendar
month or more delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note and
no event which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation or event
which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage, that are not insured against
by title insurance;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property that are not insured against by title insurance. No
improvement located on or being part of the Mortgaged Property is in violation
of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the Act, a savings and loan association, a savings
bank, a commercial bank, credit union, insurance company, mortgage lender or
other similar institution which is supervised and examined by a federal or state
authority. No Mortgage Loan contains terms or provisions which would result in
negative amortization. Principal payments on the Mortgage Loan commenced no more
than sixty days after funds were disbursed in connection with the Mortgage Loan.
The Mortgage Interest Rate as well as, with respect to Adjustable Rate Mortgage
Loans, the Lifetime Rate Cap, the Periodic Rate Floor and the Periodic Rate Cap
are as set forth on the related Mortgage Loan Schedule. The Mortgage Interest
Rate is adjusted, with respect to Adjustable Rate Mortgage Loans, on each
Interest Rate Adjustment Date to equal the Index plus the Gross Margin (rounded
up or down to the nearest 0.125%), subject to the Periodic Rate Cap. The
Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgage Loan is payable on the first day of each month.
There are no Convertible Mortgage Loans which contain a provision allowing the
Mortgagor to convert the Mortgage Note from an adjustable interest rate Mortgage
Note to a fixed interest rate Mortgage Note. The Due Date of the first payment
under the Mortgage Note is no more than 60 days from the date of the Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines (a copy of which is
attached to the related Assignment and Conveyance as Exhibit B). The Mortgage
Note and Mortgage are on forms acceptable to Freddie Mac or Xxxxxx Xxx and no
representations have been made to a Mortgagor that are inconsistent with the
mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date, the Mortgaged Property is lawfully occupied under applicable law. 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 but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgagor represented at the time of origination of the
Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with the reconveyance
of the deed of trust or a trustee's sale after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under this Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project conforms to the Underwriting Guidelines. The representations and
warranties required by prudent mortgage lending institutions which originate
mortgage loans of the same type as the Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located with respect to such condominium or a
planned unit development have been satisfied and remain true and correct;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to the secondary
market. The consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There have not been any condemnation proceedings with respect to the Mortgaged
Property and there is no proceeding pending or, to the best of the Seller's
knowledge, threatened for the total or partial condemnation of the Mortgaged
Property. As of the related Closing Date, the Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract.
All Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage. An
escrow of funds is not prohibited by applicable law and has been established, if
applicable, in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note;
With respect to each Adjustable Rate Mortgage Loan, all Mortgage
Interest Rate adjustments have been made in strict compliance with state and
federal law and the terms of the related Mortgage and Mortgage Note on the
related Interest Rate Adjustment Date. If, pursuant to the terms of the Mortgage
Note for an Adjustable Rate Mortgage Loan, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller
executed and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest
Rate and, with respect to each Adjustable Rate Mortgage Loan, the Monthly
Payment adjustments. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. As of the related Closing
Date, there is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, who had no interest, direct or indirect in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfy the requirements of Title XI
of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has, and has executed a
statement to the effect that the Mortgagor has, received all disclosure
materials required by applicable law and the Seller has complied with, all
applicable law with respect to the making of the Mortgage Loans. The Seller
shall maintain such statement in the Mortgage File or the credit file;
(pp) Construction or Rehabilitation of Mortgaged Property. The
Mortgage Loan was not made in connection with the construction or material
rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange
of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Closing Date (whether or not known to the Seller on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Seller, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in compliance with Accepted Servicing Practices;
(uu) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(vv) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded by the terms of
the Mortgage Loan Documents from furnishing the same to any subsequent or
prospective purchaser of such Mortgage. The Seller shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information in connection
with the Purchaser's secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(ww) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(xx) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified on the
related Mortgage Loan Schedule. With respect to Mortgage Loans originated prior
to October 1, 2002, no such Prepayment Penalty may be imposed for a term in
excess of five (5) years following origination. With respect to Mortgage Loans
originated on or after October 1, 2002, no such Prepayment Penalty may be
imposed for a term in excess of three (3) years following origination;
(yy) Predatory Lending Regulations. 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. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(zz) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from such Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy;
(aaa) Qualified Mortgage. The Mortgage Loan is a qualified mortgage
under Section 860G(a)(3) of the Code;
(bbb) Fair Credit Reporting Act. The Seller has, in its capacity as
servicer for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis;
(ccc) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan transaction;
(ddd) [Reserved];
(eee) Mortgagor Selection. Each Mortgagor was assigned the highest
credit grade available with respect to a mortgage loan product offered by such
Mortgage Loan's originator, taking into account the credit history, debt to
income ratio and loan requirement of such Mortgagor;
(fff) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the related Mortgagor's income, assets and liabilities
to the proposed payment and such underwriting methodology does not rely on the
extent of the related Mortgagor'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 (application/approval) the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan;
(ggg) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a prepayment
penalty upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such prepayment penalty in exchange
for a monetary benefit, including but not limited to a rate or fee reduction,
(ii) the related Mortgagor has available programs that offered the option of
obtaining a mortgage loan that did not require payment of such a prepayment
penalty and prior to the Mortgage Loan's origination, the Mortgage Loan was
available to the Mortgagor with and without the prepayment penalty, (iii) the
prepayment penalty was disclosed to the related Mortgagor in the Mortgage Loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, the Servicer shall not impose such
prepayment penalty in any instance when the mortgage debt is accelerated as the
result of the related Mortgagor's default in making the Mortgage Loan payments;
(hhh) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, disability, property,
accident, unemployment or health insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single-premium credit insurance policy (e.g., life,
disability, property, 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 single premium credit insurance policies as
part of the origination of, or as a condition to closing, such Mortgage Loan;
(iii) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation;
(jjj) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected or to
be collected in connection with the origination and servicing of each Mortgage
Loan, have been disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation;
(kkk) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default (other than payments not yet 30 days delinquent),
breach, violation or event which would permit acceleration existing under such
first Mortgage or Mortgage Note, and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration thereunder;
and
(lll) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage.
Subsection 9.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), the Seller shall use its best efforts promptly to
cure such breach in all material respects and, if such breach cannot be cured,
the Seller shall, at the Purchaser's option, repurchase such Mortgage Loan at
the Repurchase Price. Notwithstanding the above sentence, within 30 days of the
earlier of discovery or receipt of notice by the Seller of any breach of the
representations or warranties set forth in paragraph (xx), (yy), (zz), (aaa),
(bbb), (ccc), (ddd), (eee), (fff), (ggg), (hhh), (iii) or (jjj) of Subsection
9.02, the Seller shall repurchase such Mortgage Loan at the Repurchase Price. In
the event that a breach shall involve any representation or warranty set forth
in Subsection 9.01, and (except as provided in the preceding sentence with
respect to certain breaches for which no cure is permitted) such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans affected by such breach shall,
at the Purchaser's option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Subsection 9.02 (except as provided in the second sentence of this paragraph
with respect to certain breaches for which no substitution is permitted) and the
Seller discovers or receives notice of any such breach within 120 days of the
related Closing Date, the Seller shall, at the Purchaser's option and provided
that the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase
the Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted
Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan
or Loans, provided that any such substitution shall be effected not later than
120 days after the related Closing Date. If the Seller has no Qualified
Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan at the
Repurchase Price. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Subsection 9.03 shall be accomplished by either (a)
if the Interim Servicing Agreement has been entered into and is in effect,
deposit in the Custodial Account of the amount of the Repurchase Price for
distribution to the Purchaser on the next scheduled Remittance Date, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution or
(b) if the Interim Servicing Agreement has not been entered into or is no longer
in effect, by direct remittance of the Repurchase Price to the Purchaser or its
designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller, as
Interim Servicer, shall remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents and hold such parties harmless
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from a breach of any representation or warranty contained in this
Agreement or any Reconstitution Agreement (including, without limitation, any
alleged breach of any such representations and warranties arising out of or
based upon any term or provision of any Mortgage Loan alleged to be not in
conformity with any state or local law as a result of an assertion of federal
preemption or an assertion that the laws of the jurisdiction in which the Seller
is located apply to a Mortgage Loan secured by Mortgaged Property in another
jurisdiction). It is understood and agreed that the obligations of the Seller
set forth in this Subsection 9.03 to cure, substitute for or repurchase a
defective Mortgage Loan and to indemnify the Purchaser and Successor Servicer as
provided in this Subsection 9.03 and in Subsection 14.01 constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties. For purposes of this paragraph "Purchaser" shall mean the Person
then acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer" shall
mean any Person designated as the Successor Servicer pursuant to this Agreement
and any and all Persons who previously were "Successor Servicers" pursuant to
this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04. Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without prepayment penalties, in the
event that any such Mortgage Loan prepays in full on or before the earlier of
(i) a Securitization Transfer or (ii) ninety (90) days after the related Closing
Date, the Seller shall pay the Purchaser, within three (3) Business Days of such
prepayment in full, the Purchase Price for such Mortgage Loan less the
outstanding principal balance of such Mortgage Loan as of the related Cut-off
Date. The Buyer shall notify the Seller and request a repurchase within 120 days
after the related Closing Date and the Seller shall repurchase such delinquent
Mortgage Loan within forty-five (45) days of such request.
Subsection 9.05. Repurchase of Mortgage Loans With First Payment
Defaults.
With respect to any Mortgage Loan, in the event that the first
scheduled payment of principal and interest due either (i) after origination of
such Mortgage Loan, or (ii) after the related Closing Date is not paid by the
related Mortgagor to the Purchaser within thirty (30) days of such Due Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage Loan from the
Purchaser at a price equal to the related Purchase Price Percentage multiplied
by the then outstanding principal balance of such Mortgage Loan, plus accrued
and unpaid interest thereon from the date to which interest was last paid
through the day prior to the repurchase date at the applicable Mortgage Interest
Rate, plus any outstanding advances owed to any servicer in connection with such
Mortgage Loan. Notwithstanding the foregoing, the Purchaser's right to request a
repurchase hereunder shall not commence until the date which is sixty (60) days
following the related Due Date (the "Breach Date"). The Purchaser shall have
sixty (60) days following the related Breach Date to notify the Seller and
request a repurchase and the Seller shall repurchase such Mortgage Loan within
forty-five (45) days of receipt of such notice. Notwithstanding the foregoing,
the Purchaser reserves the right to request a repurchase following such sixty
(60) day timeframe in the event of a NSF return.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, the
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser in electronic format
acceptable to the Purchaser in its sole discretion, a listing
on a loan-level basis of the necessary information to compute
the Purchase Price of the Mortgage Loans delivered on the
related Closing Date (including accrued interest), and prepare
the related Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the related
Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default
under this Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to this Agreement; and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Letter shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the Interim Servicing Agreement, dated as of the initial
Cut-off Date (to be executed and delivered only for the
initial Closing Date);
3. the related Mortgage Loan Schedule, segregated by Mortgage
Loan Package, one copy to be attached hereto and one copy to
be attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto;
4. a Custodian's Certification, as required under the Custodial
Agreement;
5. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments hereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon
request of the Purchaser;
6. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
7. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
8. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
9. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit H;
10. Assignment and Conveyance in the form of Exhibit G hereto; and
11. a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) one or more third party purchasers in one or more Whole Loan
Transfers; or
(ii) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute in connection with any Whole Loan
Transfer a seller's warranties and servicing agreement in form and substance
reasonably acceptable to the parties, and in connection with a Securitization
Transfer an Assignment and Recognition Agreement substantially in the form
attached hereto as Exhibit I (collectively, the agreements referred to herein as
designated, the "Reconstitution Agreements"), together with an opinion of
counsel with respect to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; and (3) to restate the
representations and warranties set forth in Subsections 9.01 and 9.02 as of the
"Reconstitution Date", or make such representations or warranties as may be
required by any Rating Agency or prospective purchaser of the related securities
or such Mortgage Loans in connection with such Reconstitution ;provided,
however, that any such restatement shall be limited in the event circumstances
shall have changed since the related Closing Date which limit or prohibit such
restatement. The Seller shall provide to any issuer, servicer, trustee, Rating
Agency, investor and any other participants in such Reconstitution: (i) any and
all information and appropriate verification of information which may be
reasonably available to the Seller or its affiliates, whether through letters of
its auditors and counsel or otherwise, as the Purchaser shall reasonably
request; provided, however, to the extent any such information is not publicly
available, the Purchaser shall keep such information confidential and shall not
divulge it to any non-affiliated person, without the Seller's prior written
consent, except to the extent that it is appropriate for the Purchaser to do so
in working with legal counsel, auditors, taxing authorities or other
governmental agencies; (ii) such additional representations, warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Seller as are reasonably believed necessary
by the Purchaser, any such other participant or required by any Rating Agency or
investor in such Reconstitution at the Purchaser's expense not to exceed
$10,000; provided that the Seller will not be obligated to provide additional
representations or warranties that would increase the liability or exposure to
the Seller, in its reasonable discretion; (iii) in connection with any
Securitization Transfer where certain Mortgage Loans are designated Xxxxxx Xxx
eligible, Seller shall make the following additional representation in
connection with such Mortgage Loans - "Each Mortgage Loan is in compliance with
the anti-predatory lending eligibility for purchase requirements of Xxxxxx Xxx
Guides"; and (iv) to execute, deliver and satisfy all conditions set forth in
any indemnity agreement required by the Purchaser or any such participant, as
agreed to by the Seller, including, without limitation, an Indemnification and
Contribution Agreement in substantially the form attached hereto as Exhibit B.
Moreover, the Seller agrees to cooperate with all reasonable requests made by
the Purchaser to effect such Reconstitution Agreements. The Seller shall
indemnify the Purchaser, each affiliate of the Purchaser participating in the
Reconstitution, each underwriter or placement agent participating in the
Reconstitution and each Person who controls the Purchaser, such affiliate,
underwriter or placement agent and their respective present and former
directors, officers, employees and agents, and hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and expenses and related costs, judgments, and any other
costs, fees and expenses that each of them may sustain in any way related to any
information provided by or on behalf of the Seller in writing or by electronic
transmission regarding the Seller, the Mortgage Loans or the Underwriting
Guidelines set forth in any offering document (including, without limitation,
structural term sheets, collateral term sheets and computational materials)
prepared in connection with any Reconstitution. For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement.
Other than with respect to MERS designated Mortgage Loans, in the
event the Purchaser has elected to have the Seller or the Interim Servicer hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an Assignment of Mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller or the Interim Servicer, as
applicable, acceptable to the prospective purchaser or trustee, as applicable,
for each Mortgage Loan that is part of the Reconstitution and shall pay all
preparation and recording costs associated therewith. In connection with the
Reconstitution, the Seller shall execute or shall cause the Interim Servicer to
execute each Assignment of Mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the prospective
purchaser or trustee, as applicable, upon the Seller's receipt thereof.
Additionally, the Seller shall prepare and execute or shall cause the Interim
Servicer to execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01. Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and the Successor Servicer and
its present and former directors, officers, employees and agents, and hold such
parties harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees(including legal fees incurred
in connection with the enforcement of the Seller's indemnification obligation
under this Section 14.01) and related costs, judgments, and any other costs,
fees and expenses that the Purchaser may sustain in any way related to the
failure of the Seller to perform its duties and to service the Mortgage Loans in
compliance with the terms of this Agreement or any Reconstitution Agreement
entered into pursuant to Section 13 or any breach of any of Seller's
representations, warranties and covenants set forth in this Agreement (provided
that such costs shall not include any lost profits). For purposes of this
paragraph "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were "Successor Servicers" pursuant to this Agreement. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans.
(b) Promptly after receipt by an indemnified party under this
Section 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 14.01, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve the indemnifying party from any liability which it may have to any
indemnified party under this Section 14.01, except to the extent that it has
been prejudiced in any material respect, or from any liability which it may
have, otherwise than under this Section 14.01. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there may
be legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
Subsection 14.02. Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to its aggregate loan servicing portfolio, including delinquency ratios, to the
extent reasonably required by any Rating Agency, regulatory body or other party
in connection with a Reconstitution.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms Letter,
it being specifically understood and agreed that each Mortgage Loan is unique
and identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver each of the related
Mortgage Loans on or before the related Closing Date. The Seller hereby grants
to the Purchaser a lien on and a continuing security interest in each Mortgage
Loan and each document and instrument evidencing each such Mortgage Loan to
secure the performance by the Seller of its obligations under the related
Purchase Price and Terms Letter, and the Seller agrees that it shall hold such
Mortgage Loans in custody for the Purchaser subject to the Purchaser's (i) right
to reject any Mortgage Loan under the terms of this Agreement, and (ii)
obligation to pay the Purchase Price for the Mortgage Loans. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Fremont Investment & Loan
0000 Xxxx Xxxxxxxx Xxxxxxx
Xxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxxxxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. In the event the Purchaser assigns this Agreement, and
the assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after each Closing Date, the Seller agrees that it will not
take any action or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) notice from the related borrower or obligor under a Mortgage
Loan of such party's intention to refinance such Mortgage Loan. It is understood
and agreed that all rights and benefits relating to the solicitation of any
Mortgagors and the attendant rights, title and interest in and to the list of
such Mortgagors and data relating to their Mortgages (including insurance
renewal dates) shall be transferred to the Purchaser pursuant hereto on the
related Closing Date and the Seller shall take no action to undermine these
rights and benefits. Notwithstanding the foregoing, it is understood and agreed
that promotions undertaken by the Seller or any affiliate of the Seller which
are directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section
29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission to Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL
HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
FREMONT INVESTMENT & LOAN
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except with respect to MERS
Designated Mortgage Loans). The Assignment of Mortgage must be duly recorded
only if recordation is either necessary under applicable law or commonly
required by private institutional mortgage investors in the area where the
Mortgaged Property is located or on direction of the Purchaser as provided in
this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(f) (f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or, in the case of a MERS Designated Mortgage Loan, MERS) with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officers Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating that
such intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
Exhibit B
EXHIBIT B
FORM OF INDEMNIFICATION
AND
CONTRIBUTION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated _________,
200_ ("Agreement") among [______________], a [______________] (the
"Depositor"), [______________], a [______________] (the "Underwriter"),
[______________], a [______________] (the "Initial Purchaser") and
[______________], a [______________] (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party and the Depositor are parties to
the Pooling and Servicing Agreement (as defined herein);
WHEREAS, the Indemnifying Party originated or acquired the Mortgage
Loans and subsequently sold the Mortgage Loans to Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser"), an affiliate of the Depositor, in anticipation
of the securitization transaction;
WHEREAS, the Indemnifying Party also stands to receive substantial
financial benefits in its capacity as servicer under the Pooling and Servicing
Agreement;
WHEREAS, as an inducement to the Depositor to enter into the Pooling
and Servicing Agreement and the Underwriter to enter into the Underwriting
Agreement (as defined herein), the Indemnifying Party wishes to provide for
indemnification and contribution on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Agreement: This Indemnification and Contribution Agreement, as
the same may be amended in accordance with the terms hereof.
Indemnified Parties: As defined in Section 3.1.
Indemnifying Party Information: All information in the Prospectus
Supplement or any amendment or supplement thereto (i) contained under the
headings "Summary--Relevant Parties--Responsible Party [and Servicer,"] "The
Mortgage Loan Pool--Underwriting Guidelines" [and "The Servicer"] and (ii)
regarding the Mortgage Loans, the related mortgagors and/or the related
Mortgaged Properties (but in the case of this clause (ii), only to the extent
any untrue statement or omission arose from or is based upon errors or omissions
in the information concerning the Mortgage Loans, the related mortgagors and/or
the related Mortgaged Properties, as applicable, provided to the Depositor or
any affiliate by or on behalf of the Indemnifying Party).
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of ___________, 200_, among the Depositor, the
Indemnifying Party, as responsible party and servicer, and [______________].
Private Placement Memorandum: The private placement memorandum,
dated ___________, 200_, relating to the offering of the Privately Offered
Certificates, including any structural term sheets, collateral terms sheets and
computational materials used in connection with such offering.
Privately Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__] issued pursuant to
the Pooling and Servicing Agreement.
Prospectus Supplement: The preliminary prospectus supplement, dated
___________, 200_, together with the final prospectus supplement, dated
___________, 200_, relating to the offering of the Publicly Offered
Certificates, including any structural term sheets, collateral terms sheets and
computational materials used in connection with such offering.
Publicly Offered Certificates: [______________], Mortgage
Pass-Through Certificates, Series [_______], Class [__], Class [__],
Class [__], Class [__], Class [__], Class [__] and Class [__] issued pursuant
to the Pooling and Servicing Agreement.
Purchase Agreement: The Purchase Agreement, dated ___________,
200_, between the Depositor and the Initial Purchaser, relating to the sale
of the Privately Offered Certificates.
Underwriting Agreement: The Underwriting Agreement, dated
___________, 200_, between the Depositor and the Underwriter, relating to the
sale of the Publicly Offered Certificates.
1.2 Other Terms. Capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Pooling and Servicing
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each party hereto represents that:
(a) it has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and
delivered by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and binding
obligation of such party.
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Indemnifying Party of the Depositor and
the Underwriter. (a) The Indemnifying Party shall indemnify and hold harmless
the Depositor, the Underwriter and the Initial Purchaser and their respective
affiliates, and their respective present and former directors, officers,
employees, agents and each Person, if any, that controls the Depositor, the
Underwriter or such affiliate, within the meaning of either the 1933 Act or the
1934 Act (collectively, the "Indemnified Parties"), against any and all losses,
claims, damages, penalties, fines, forfeitures or liabilities, joint or several,
to which each such Indemnified Party may become subject, under the 1933 Act, the
1934 Act or otherwise, to the extent that such losses, claims, damages,
penalties, fines, forfeitures or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Prospectus Supplement, the Private
Placement Memorandum or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to information set forth in the Indemnifying Party
Information, and the Indemnifying Party shall in each case reimburse each
Indemnified Party for any legal or other costs, fees, or expenses reasonably
incurred and as incurred by such Indemnified Party in connection with
investigating or defending any such loss, claim, damage, penalty, fine,
forfeiture, liability or action. The Indemnifying Party's liability under this
Section 3.1 shall be in addition to any other liability that the Indemnifying
Party may otherwise have.
(b) If the indemnification provided for in this Section 3.1 shall
for any reason be unavailable to an Indemnified Party under this Section 3.1
(other than due to indemnification not being applicable under Section 3.1(a)),
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages, penalty, fine, forfeiture, costs, fees and
expenses of the nature contemplated herein and incurred by the parties hereto in
such proportions that are appropriate to reflect the relative fault of the
Depositor or the Underwriter, on the one hand, and the Indemnifying Party, on
the other hand, in connection with the applicable misstatements or omissions as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person that was not guilty of such fraudulent misrepresentation. For purposes of
this Section 3.1, each director of a party to this Agreement and each Person, if
any, that controls a party to this Agreement within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such party.
3.2 Notification; Procedural Matters. Promptly after receipt by an
Indemnified Party under Section 3.1 of notice of any claim or the commencement
of any action, such Indemnified Party shall, if a claim in respect thereof is to
be made against the Indemnifying Party (or if a claim for contribution is to be
made against another party) under Section 3.1, notify the Indemnifying Party (or
other contributing party) in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party (or
other contributing party) shall not relieve it from any liability which it may
have under Section 3.1 except to the extent it has been materially prejudiced by
such failure; and provided, further, however, that the failure to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Party (or to the party requesting contribution) otherwise than
under Section 3.1. In case any such action is brought against any Indemnified
Party and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Parties would present such counsel with a
conflict of interest, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
Indemnifying Party shall have authorized the employment of counsel for the
Indemnified Party at the expense of the Indemnifying Party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall the
Indemnifying Party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE IV
GENERAL
4.1 Survival. This Agreement and the obligations of the parties
hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and Privately Offered Certificates.
4.2 Successors. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, each Indemnified Party and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
4.4 Miscellaneous. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated except by a writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, which taken together shall constitute one and
the same instrument.
4.5 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered to:
In the case of the Depositor:
[______________]
[______________]
[______________]
Attention:
Telephone:
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loans Operations Manager
Telephone:
In the case of the Underwriter:
[______________]
[______________]
[______________]
Attention:
Telephone:
In the case of the Indemnifying Party:
[______________]
[______________]
[______________]
Attention:
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
[DEPOSITOR]
By:
------------------------------------
Name:
Title:
[UNDERWRITER]
By:
------------------------------------
Name:
Title:
[INDEMNIFYING PARTY]
By:
------------------------------------
Name:
Title:
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of Fremont Investment & Loan, a state chartered institution
organized under the laws of the state of California (the "Company") and further
as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ______.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver the Mortgage Loan Purchase
and Warranties Agreement, dated as of May 1, 2005 (the "Purchase
Agreement") and the Interim Servicing Agreement, dated as of May 1, 2005
(the "Servicing Agreement"), each by and between Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser") and the Company and to endorse the Mortgage
Notes and execute the Assignments of Mortgages by original [or facsimile]
signature, and such resolutions are in effect on the date hereof and have
been in effect without amendment, waiver, rescission or modification.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement or the Servicing Agreement, the sale of the
mortgage loans or the consummation of the transactions contemplated by the
agreements; or (ii) any required consent, approval, authorization or order
has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement or the Servicing
Agreement conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the charter or
by-laws of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or to
which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement, the Servicing Agreement or the mortgage loans or of any action
taken or to be taken in connection with the transactions contemplated
hereby, or which would be likely to impair materially the ability of the
Company to perform under the terms of the Purchase Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement and (c) any other document
delivered or on the date hereof in connection with any purchase described
in the agreements set forth above was, at the respective times of such
signing and delivery, and is now, a duly elected or appointed, qualified
and acting officer or representative of the Company, who holds the office
set forth opposite his or her name on Exhibit 5, and the signatures of
such persons appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement and the Servicing
Agreement.
10. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the endorsements
to the Mortgage Notes and the Assignments of Mortgages, and the original
[or facsimile] signature of the officer at the Company executing the
endorsements to the Mortgage Notes and the Assignments of Mortgages
represents the legal and valid signature of said officer of the Company.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of Fremont
Investment & Loan, hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
NAME TITLE SIGNATURE
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Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to Fremont Investment & Loan (the "Company"), with respect to certain
matters in connection with the sale by the Company of the Mortgage Loans
pursuant to that certain Mortgage Loan Purchase and Warranties Agreement by and
between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser"),
dated as of May 1, 2005 (the "Purchase Agreement") which sale is in the form of
whole loans and that certain Interim Servicing Agreement, dated as of May 1,
2005 by and between the Purchaser and the Company, as Interim Servicer (the
"Interim Servicing Agreement", and together with the Purchase Agreement, the
"Agreements"). Capitalized terms not otherwise defined herein have the meanings
set forth in the Agreements.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Interim Servicing Agreement;
3. the form of Assignment of Mortgage;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Agreements. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a state chartered industrial bank duly
organized, validly existing and in good standing under the
laws of the state of California and is qualified to transact
business in, and is in good standing under, the laws of the
state of incorporation.
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver the
Agreements and to perform and observe the terms and conditions
of the Agreements.
3. The Agreements have been duly authorized, executed and
delivered by the Company, and are legal, valid and binding
agreements enforceable in accordance with their respective
terms against the Company, subject to bankruptcy laws and
other similar laws of general application affecting rights
of creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially
interfere with the realization of the benefits provided
thereunder or with the Purchaser's ownership of the
Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements to which it is a party
5. Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for
the execution, delivery and performance by the Company of
or compliance by the Company with the Agreements and the
sale of the Mortgage Loans by the Company or the
consummation of the transactions contemplated by the
Agreements to which each is a party or (ii) any required
consent, approval, authorization or order has been obtained
by the Company.
6. Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of, the Agreements
conflict or will conflict with or result or will result in
a breach of or constitutes or will constitute a default
under the charter or by-laws of the Company, the terms of
any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it
is subject, or violates any statute or order, rule,
regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the
Company is subject or by which it is bound.
7. There is no action, suit, proceeding or investigation
pending or, to the best of [our] [my] knowledge, threatened
against the Company which, in [our] [my] judgment, either
in any one instance or in the aggregate, may result in any
material adverse change in the business, operations,
financial condition, properties or assets of the Company or
in any material impairment of the right or ability of the
Company to carry on its business substantially as now
conducted or in any material liability on the part of the
Company or which would draw into question the validity of
the Agreements or the Mortgage Loans or of any action taken
or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the
terms of the Agreements.
8. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
---------------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that Fremont Investment & Loan, a state
chartered industrial bank, organized pursuant to the laws of California (the
"Company"), has committed to sell to Xxxxxx Xxxxxxx Mortgage Capital Inc. under
a Mortgage Loan Purchase and Warranties Agreement, dated as of May 1, 2005,
certain mortgage loans originated by the Association. The Company warrants that
the mortgage loans to be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc. are in
addition to and beyond any collateral required to secure advances made by the
Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
_____________________________
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by to Xxxxxx Xxxxxxx Mortgage Capital Inc. from the Company named below pursuant
to that certain Mortgage Loan Purchase and Warranties Agreement, dated as of May
1, 2005 and certifies that all notes, mortgages, assignments and other documents
in its possession relating to such Mortgage Loans have been delivered and
released to the Company named below or its designees, as of the date and time of
the sale of such Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc.
Name and Address of Financial Institution
___________________________________
(name)
___________________________________
(Address)
By:________________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
_______________________________
By:____________________________
Title:_________________________
Date:__________________________
Exhibit G
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE
On this _____day of __________, 200_, ____________________________
(the "Seller") as the seller under (i) that certain Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005 (the "Purchase Agreement") and
(ii) that certain Purchase Price and Terms Agreement, dated as of ________, 200_
("PPTA", and together with the Purchase Agreement, the "Agreements") does hereby
sell, transfer, assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital
Inc. (the "Purchaser") as the Purchaser under the Purchase Agreement, without
recourse, but subject to the terms of Purchase Agreement, all right, title and
interest of, in and to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Exhibit A (the "Mortgage Loans"), together with the Servicing
Rights, and the Mortgage Files and all rights and obligations arising under the
documents contained therein. Each Mortgage Loan subject to the Purchase
Agreement was underwritten in accordance with, and conforms to, the Underwriting
Guidelines attached hereto as Exhibit B. Pursuant to Section 6 of the Purchase
Agreement, the Seller has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in the Purchase Agreement. The
contents of each Servicing File required to be retained by the Seller to service
the Mortgage Loans, and thus not delivered to the Purchaser, are and shall be
held in trust by the Seller in its capacity as servicer for the benefit of the
Purchaser as the owner thereof. The Seller's possession of any portion of the
Servicing File in its capacity as servicer is at the will of the Purchaser for
the sole purpose of facilitating servicing of the related Mortgage Loan, and
such retention and possession by the Seller shall be in a custodial capacity
only.
The related Purchase Price Percentage for each Mortgage Loan to be
used in connection with repurchases by the Seller pursuant to the Purchase
Agreement are set forth on Exhibit C hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreements.
[SIGNATURE PAGE FOLLOWS]
FREMONT INVESTMENT & LOAN
By:____________________________________
Name:__________________________________
Title:_________________________________
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE
THE MORTGAGE LOANS
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE
UNDERWRITING GUIDELINES
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE
PURCHASE PRICE PERCENTAGES
Exhibit H
EXHIBIT H
UNDERWRITING GUIDELINES
Exhibit I
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage Loan
Purchase and Warranties Agreement (the "Purchase Agreement"), dated as of May 1,
2005, between the Assignor, as purchaser (the "Purchaser"), and the Company, as
seller, solely insofar as the Purchase Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser, the Custodian or the Bailee under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust (including the Trustee and the Servicer acting on the Trust's
behalf). Neither the Company nor the Assignor shall amend or agree to amend,
modify, waiver, or otherwise alter any of the terms or provisions of the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the Assignee
and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement.
The execution by the Company of this Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of
the Company's charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company is now a party
or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Company or
its property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement; and
(d) There is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative
agency or other tribunal, which would draw into question the
validity of this Agreement or the Purchase Agreement, or which,
either in any one instance or in the aggregate, would result in any
material adverse change in the ability of the Company to perform its
obligations under this Agreement or the Purchase Agreement, and the
Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Section 9.02
of the Purchase Agreement are true and correct as of the date hereof or the
Servicing Transfer Date, as applicable, as if such representations and
warranties were made on the date hereof unless otherwise specifically stated in
such representations and warranties or as limited in Exhibit B attached hereto.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By: __________________________________
Name:__________________________________
Its:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By: __________________________________
Name:__________________________________
Its:
[__________________________]
By: __________________________________
Name:__________________________________
Its:
Exhibit I
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
Exhibit I
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Transfer Date Representations and Warranties
(1) Payments Current. All payments required to be made up to the related
Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan.
(2) No Outstanding Charges. There are no defaults in complying with the terms
of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground
rents which previously became due and owing have been paid, or an escrow
of funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is not yet
due and payable. The Seller 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
under the Mortgage Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date
of the first installment of principal and interest, including, without
limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan.
(3) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified in any respect, from
the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and
which has been delivered to the Custodian or to such other Person as the
Purchaser shall designate in writing, and the terms of which are reflected
in the related Mortgage Loan Schedule. The substance of any such waiver,
alteration or modification has been approved by the issuer of the title
insurer, if any, to the extent required by the policy, and its terms are
reflected on the related Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement, approved by the issuer of the title insurer,
to the extent required by the policy, and which assumption agreement is
part of the Mortgage Loan File delivered to the Custodian or to such other
Person as the Purchaser shall designate in writing and the terms of which
are reflected in the related Mortgage Loan Schedule.
(4) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, except as approved by a title insurer, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the performance by
the Mortgagor of any action, if the Mortgagor's failure to perform such
action would cause the Mortgage Loan to be in default, nor has the Seller
waived any default resulting from any action or inaction by the Mortgagor.
(5) No Defaults. Other than payments due but not yet one calendar month or
more delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective
predecessors, have waived any default, breach, violation or event which
would permit acceleration.
(6) No Mechanics' Liens. There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage, that are not
insured against by title insurance.
(7) Occupancy of the Mortgaged Property. As of the related origination date,
the Mortgaged Property is lawfully occupied under applicable law. 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 but not limited to
certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgagor represented
at the time of origination of the Mortgage Loan that the Mortgagor would
occupy the Mortgaged Property as the Mortgagor's primary residence.
(8) Mortgaged Property Undamaged; No Condemnation Proceedings. At the time of
origination and, to the Seller's knowledge, on the Closing Date, there
have not been any condemnation proceedings with respect to the Mortgaged
Property and there is no proceeding pending or, to the best of the
Seller's knowledge, threatened for the total or partial condemnation of
the Mortgaged Property. As of the related Closing Date, the Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the
use for which the premises were intended and each Mortgaged Property is in
good repair.
(9) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Seller with
respect to the Mortgage Loan have been in all respects in compliance with
Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not
been made. Each Mortgage Loan is covered by a paid in full, life of loan,
tax service contract. All Escrow Payments have been collected in full
compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by
applicable law and has been established, if applicable, in an amount
sufficient to pay for every item that remains unpaid and has been assessed
but is not yet due and payable. No escrow deposits or Escrow Payments or
other charges or payments due the Seller have been capitalized under the
Mortgage or the Mortgage Note.
With respect to each Adjustable Rate Mortgage Loan, all Mortgage
Interest Rate adjustments have been made in strict compliance with state
and federal law and the terms of the related Mortgage and Mortgage Note on
the related Interest Rate Adjustment Date. If, pursuant to the terms of
the Mortgage Note for an Adjustable Rate Mortgage Loan, another index was
selected for determining the Mortgage Interest Rate, the same index was
used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the
related Mortgage Note. The Seller executed and delivered any and all
notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and, with
respect to each Adjustable Rate Mortgage Loan, the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited.
(10) Other Insurance Policies. No action, inaction or event has occurred and no
state of facts exists or has existed that has resulted or will result in
the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy or bankruptcy bond,
irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had
a financial interest at the time of placement of such insurance.
(11) Escrow Analysis. With respect to each Mortgage, the Seller has within the
last twelve months (unless such Mortgage was originated within such twelve
month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required
payments are timely made, any deficiency will be eliminated on or before
the first anniversary of such analysis, or any overage will be refunded to
the Mortgagor, in accordance with RESPA and any other applicable law.
(12) No Defenses. The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation the defense
of usury, nor will the operation of any of the terms of the Mortgage Note
or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or federal
bankruptcy or insolvency proceeding at, or subsequent to, the time the
Mortgage Loan was originated.
EXHIBIT T
FORM OF SERVICER POWER OF ATTORNEY
When Recorded Mail To:
Countrywide Home Loans Servicing LP
0000 Xxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Deutsche Bank National Trust Company, a
national banking association organized and existing under the laws of the United
States, and having its principal place of business at 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, Xxxxxxxxxx, 00000, as Trustee pursuant to that Xxxxxx Xxxxxxx
ABS Capital I Inc. Trust 2005-HE3 Pooling and Servicing Agreement, dated as of
July 1, 2005, among Xxxxxx Xxxxxxx ABS Capital I Inc., as Depositor, WMC
Mortgage Corp., as a Responsible Party, Countrywide Home Loans Servicing LP, as
a Servicer, HomEq Servicing Corporation, as a Servicer, Decision One Mortgage
Company LLC, as a Responsible Party, NC Capital Corporation, as a Responsible
Party, Accredited Home Lenders, Inc., as a Responsible Party, LaSalle Bank
National Association, as a Custodian, Xxxxx Fargo Bank, National Association, as
Master Servicer, Securities Administrator and a Custodian, and Deutsche Bank
National Trust Company, as Trustee, hereby constitutes and appoints
[Countrywide] [HomEq], by and through [Countrywide's] [HomEq's] officers, the
Trustee's true and lawful Attorney-in-fact, in the Trustee's name, place and
stead and for the Trustee's benefit, in connection with all mortgage loans
serviced by [Countrywide] [HomEq] pursuant to the Agreement solely for the
purpose of performing such acts and executing such documents in the name of the
Trustee necessary and appropriate to effectuate the following enumerated
transactions in respect of any of the mortgages or deeds of trust (the
"Mortgages" and the "Deeds of Trust" respectively) and promissory notes secured
thereby (the "Mortgage Notes") for which the undersigned is acting as Trustee
for various certificateholders (whether the undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) and for which
[Countrywide] [HomEq] is acting as servicer.
This Appointment shall apply only to the following enumerated transactions and
nothing herein or in the Agreement shall be construed to the contrary:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recording is solely for the purpose of
correcting the Mortgage or Deed of Trust to conform same to the
original intent of the parties thereto or to correct title errors
discovered after such title insurance was issued; provided that (i)
said modification or re-recording, in either instance, does not
adversely affect the lien of the Mortgage or Deed of Trust as
insured and (ii) otherwise conforms to the provisions of the
Agreement.
2. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency
or unit with powers of eminent domain; this section shall include,
without limitation, the execution of partial satisfactions/releases,
partial reconveyances or the execution or requests to trustees to
accomplish same.
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate
owned, or conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage
Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage
loan secured and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the
refinancing thereof, including, without limitation, the assignment
of the related Mortgage Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of
judicial or non-judicial foreclosure or termination, cancellation or
rescission of any such foreclosure, including, without limitation,
any and all of the following acts:
a. the substitution of trustee(s) serving under a Deed of Trust,
in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage, Deed of Trust or state law to
expeditiously complete said transactions in paragraphs 8.a.
through 8.e. above.
9. With respect to the sale of property acquired through a foreclosure
or deed-in lieu of foreclosure, including, without limitation, the
execution of the following documentation:
a. listing agreements;
b. purchase and sale agreements;
x. xxxxx/warranty/quit claim deeds or any other deed causing the
transfer of title of the property to a party contracted to
purchase same;
x. xxxxxx instructions; and
e. any and all documents necessary to effect the transfer of
property.
10. The modification or amendment of escrow agreements established for
repairs to the mortgaged property or reserves for replacement of
personal property.
The undersigned gives said Attorney-in-fact full power and authority
to execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and xxxxxx does ratify and confirm to all that said Attorney-in-fact shall
be effective as of July 21, 2005.
This appointment is to be construed and interpreted as a limited
power of attorney. The enumeration of specific items, rights, acts or powers
herein is not intended to, nor does it give rise to, and it is not to be
construed as a general power of attorney.
Nothing contained herein shall (i) limit in any manner any
indemnification provided by [Countrywide] [HomEq] to the Trustee under the
Agreement, or (ii) be construed to grant [Countrywide] [HomEq] the power to
initiate or defend any suit, litigation or proceeding in the name of Deutsche
Bank National Trust Company except as specifically provided for herein. If
[Countrywide] [HomEq] receives any notice of suit, litigation or proceeding in
the name of Deutsche Bank National Trust Company or Bankers Trust Company of
California, N.A., then [Countrywide] [HomEq] shall promptly forward a copy of
same to the Trustee.
This limited power of attorney is not intended to extend the powers
granted to [Countrywide] [HomEq] under the Agreement or to allow [Countrywide]
[HomEq] to take any action with respect to Mortgages, Deeds of Trust or Mortgage
Notes not authorized by the Agreement.
[Countrywide] [HomEq] hereby agrees to indemnify and hold the
Trustee and its directors, officers, employees and agents harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever incurred by reason or result of or in connection with the
exercise by [Countrywide] [HomEq] of the powers granted to it hereunder. The
foregoing indemnity shall survive the termination of this Limited Power of
Attorney and the Agreement or the earlier resignation or removal of the Trustee
under the Agreement.
This Limited Power of Attorney is entered into and shall be governed
by the laws of the State of New York, without regard to conflicts of law
principles of such state.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of Attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect and
has not been revoked unless an instrument of revocation has been made in writing
by the undersigned.
IN WITNESS WHEREOF, Deutsche Bank National Trust Company, as Trustee
has caused its corporate seal to be hereto affixed and these presents to be
signed and acknowledged in its name and behalf by a duly elected and authorized
signatory this ___________ day of ____________.
Deutsche Bank National Trust Company, as Trustee
By:_____________________________________________
Name:
Title:
Acknowledged and Agreed
[Countrywide Home Loans Servicing LP]
[HomEq Servicing Corporation]
By: ________________________
Name:
Title:
STATE OF CALIFORNIA
COUNTY OF ____________
On ________________, _____, before me, the undersigned, a Notary
Public in and for said state, personally appeared
________________________________ of Deutsche Bank National Trust Company, as
Trustee for Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2005-HE3, personally known
to me to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed that same in his/her authorized
capacity, and that by his/her signature on the instrument the entity upon behalf
of which the person acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
____________________________________________
Notary Public, State of California
EXHIBIT U
XXXXX FARGO FORMS
Exhibit : Calculation of Realized Loss/Gain Form 332- Instruction Sheet
NOTE: Do not net or combine items. Show all expenses individually and all
credits as separate line items. Claim packages are due on the remittance
report date. Late submissions may result in claims not being passed until
the following month. The Servicer is responsible to remit all funds
pending loss approval and /or resolution of any disputed items.
(ooo)
(ppp) The numbers on the 332 form correspond with the numbers listed
below.
Liquidation and Acquisition Expenses:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period
of coverage, base tax, interest, penalty. Advances prior to
default require evidence of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing
all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and
WFB's approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
(qqq) Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332
form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial
proceeds and line (18b) for Part B/Supplemental proceeds.
Total Realized Loss (or Amount of Any Gain)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).
Exhibit 3A: Calculation of Realized Loss/Gain Form 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
------------------------ -------------------------- --------------------------
Servicer Loan No. Servicer Name Servicer Address
------------------------ -------------------------- --------------------------
XXXXX FARGO BANK, N.A. Loan No._____________________________
Borrower's Name: _________________________________________________________
Property Address: ________________________________________________________
Liquidation Type: REO Sale 3rd Party Sale Short Sale Charge Off
Was this loan granted a Bankruptcy deficiency or cramdown Yes No
If "Yes", provide deficiency or cramdown amount _______________________________
Liquidation and Acquisition Expenses:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ______________ (1)
(2) Interest accrued at Net Rate ________________ (2)
(3) Accrued Servicing Fees ________________ (3)
(4) Attorney's Fees ________________ (4)
(5) Taxes (see page 2) ________________ (5)
(6) Property Maintenance ________________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) ________________ (7)
(8) Utility Expenses ________________ (8)
(9) Appraisal/BPO ________________ (9)
(10) Property Inspections ________________ (10)
(11) FC Costs/Other Legal Expenses ________________ (11)
(12) Other (itemize) ________________ (12)
Cash for Keys__________________________ ________________ (12)
HOA/Condo Fees_________________________ ________________ (12)
_______________________________________ ________________ (12)
Total Expenses $ ______________ (13)
Credits:
(14) Escrow Balance $ ______________ (14)
(15) HIP Refund ________________ (15)
(16) Rental Receipts ________________ (16)
(17) Hazard Loss Proceeds ________________ (17)
(18) Primary Mortgage Insurance / Gov't Insurance ________________ (18a)
HUD Part A
________________ (18b)
HUD Part B
(19) Pool Insurance Proceeds ________________ (19)
(20) Proceeds from Sale of Acquired Property ________________ (20)
(21) Other (itemize) ________________ (21)
_________________________________________ ________________ (21)
Total Credits $ ______________ (22)
Total Realized Loss (or Amount of Gain) $ ______________ (23)
Escrow Disbursement Detail
----------------------------------------------------------------------------------------------------------------
Type Date Paid Period of Total Paid Base Amount Penalties Interest
(Tax /Ins.) Coverage
----------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Column/Header Name Description Decimal Format
Comment
------------------------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer. This
may be different than the LOAN_NBR
------------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by the originator.
------------------------------------------------------------------------------------------------------------------------------------
CLIENT_NBR Servicer Client Number
------------------------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR Contains a unique number as assigned by an external servicer
to identify a group of loans in their system.
------------------------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME First Name of the Borrower.
------------------------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME Last name of the borrower.
------------------------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS Street Name and Number of Property
------------------------------------------------------------------------------------------------------------------------------------
PROP_STATE The state where the property located.
------------------------------------------------------------------------------------------------------------------------------------
PROP_ZIP Zip code where the property is located.
------------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due to the MM/DD/YYYY
servicer at the end of processing cycle, as reported by
Servicer.
------------------------------------------------------------------------------------------------------------------------------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
------------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
------------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR The case number assigned by the court to the bankruptcy
filing.
------------------------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been approved MM/DD/YYYY
by the courts
------------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either by MM/DD/YYYY
Dismissal, Discharged and/or a Motion For Relief Was
Granted.
------------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The Servicer MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such As;
------------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To End/Close MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
------------------------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue Foreclosure MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a Foreclosure MM/DD/YYYY
Action
------------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to occur. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE The date the servicer initiates eviction of the borrower. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the property MM/DD/YYYY
from the borrower.
------------------------------------------------------------------------------------------------------------------------------------
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
LIST_DATE The date an REO property is listed at a particular price. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME The date an offer is received by DA Admin or by the Servicer. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE The date the REO sale of the property is scheduled to close. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE Classification of how the property is occupied.
------------------------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE A code that indicates the condition of the property.
------------------------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL The current "as is" value of the property based on brokers 2
price opinion or appraisal.
------------------------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or appraisal.
------------------------------------------------------------------------------------------------------------------------------------
If applicable:
------------------------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
------------------------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE The circumstances which caused a borrower to stop paying on
a loan. Code indicates the reason why the loan is in
default for this cycle.
------------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
------------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The Pool MM/DD/YYYY
Insurer
------------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
------------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
------------------------------------------------------------------------------------------------------------------------------------
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The Occupant Code field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:
--------------------------------------------------------------------------
Delinquency Delinquency Description
Code
--------------------------------------------------------------------------
001 FNMA-Death of principal mortgagor
--------------------------------------------------------------------------
002 FNMA-Illness of principal mortgagor
--------------------------------------------------------------------------
003 FNMA-Illness of mortgagor's family member
--------------------------------------------------------------------------
004 FNMA-Death of xxxxxxxxx's family member
--------------------------------------------------------------------------
005 FNMA-Marital difficulties
--------------------------------------------------------------------------
006 FNMA-Curtailment of income
--------------------------------------------------------------------------
007 FNMA-Excessive Obligation
--------------------------------------------------------------------------
008 FNMA-Abandonment of property
--------------------------------------------------------------------------
009 FNMA-Distant employee transfer
--------------------------------------------------------------------------
011 FNMA-Property problem
--------------------------------------------------------------------------
012 FNMA-Inability to sell property
--------------------------------------------------------------------------
013 FNMA-Inability to rent property
--------------------------------------------------------------------------
014 FNMA-Military Service
--------------------------------------------------------------------------
015 FNMA-Other
--------------------------------------------------------------------------
016 FNMA-Unemployment
--------------------------------------------------------------------------
017 FNMA-Business failure
--------------------------------------------------------------------------
019 FNMA-Casualty loss
--------------------------------------------------------------------------
022 FNMA-Energy environment costs
--------------------------------------------------------------------------
023 FNMA-Servicing problems
--------------------------------------------------------------------------
026 FNMA-Payment adjustment
--------------------------------------------------------------------------
027 FNMA-Payment dispute
--------------------------------------------------------------------------
029 FNMA-Transfer of ownership pending
--------------------------------------------------------------------------
030 FNMA-Fraud
--------------------------------------------------------------------------
031 FNMA-Unable to contact borrower
--------------------------------------------------------------------------
INC FNMA-Incarceration
--------------------------------------------------------------------------
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Status Code field should show the Status of Default as
follows:
--------------------------------------------------------------------------
Status Code Status Description
--------------------------------------------------------------------------
09 Forbearance
--------------------------------------------------------------------------
17 Pre-foreclosure Sale Closing Plan Accepted
--------------------------------------------------------------------------
24 Government Seizure
--------------------------------------------------------------------------
26 Refinance
--------------------------------------------------------------------------
27 Assumption
--------------------------------------------------------------------------
28 Modification
--------------------------------------------------------------------------
29 Charge-Off
--------------------------------------------------------------------------
30 Third Party Sale
--------------------------------------------------------------------------
31 Probate
--------------------------------------------------------------------------
32 Military Indulgence
--------------------------------------------------------------------------
43 Foreclosure Started
--------------------------------------------------------------------------
44 Deed-in-Lieu Started
--------------------------------------------------------------------------
49 Assignment Completed
--------------------------------------------------------------------------
61 Second Lien Considerations
--------------------------------------------------------------------------
62 Veteran's Affairs-No Bid
--------------------------------------------------------------------------
63 Veteran's Affairs-Refund
--------------------------------------------------------------------------
64 Veteran's Affairs-Buydown
--------------------------------------------------------------------------
65 Chapter 7 Bankruptcy
--------------------------------------------------------------------------
66 Chapter 11 Bankruptcy
--------------------------------------------------------------------------
67 Chapter 13 Bankruptcy
--------------------------------------------------------------------------
