EXHIBIT 99.2
EXECUTION COPY
XXXXXX XXXXXXX XXXX XXXXXX CREDIT CORPORATION,
as Servicer
MSDWCC HELOC TRUST 2005-1,
as Issuer
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Indenture Trustee
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SERVICING AGREEMENT
Dated as of January 1, 2005
----------------------
Home Equity Loans
TABLE OF CONTENTS
Page
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ARTICLE I.
Definitions
Section 1.01. Definitions............................................................................1
Section 1.02. Other Definitional Provisions..........................................................1
Section 1.03. Interest Calculations..................................................................2
ARTICLE II.
Representations and Warranties
Section 2.01. Representations and Warranties Regarding the Servicer..................................3
Section 2.02. Representations and Warranties of the Issuer...........................................4
Section 2.03. Enforcement of Representations and Warranties..........................................4
ARTICLE III.
Administration and Servicing of Home Equity Loans
Section 3.01. The Servicer...........................................................................6
Section 3.02. Collection of Certain Home Equity Loan Payments........................................9
Section 3.03. Withdrawals from the Collection Account...............................................11
Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses.........................12
Section 3.05. Modification Agreements...............................................................13
Section 3.06. Trust Estate; Related Documents.......................................................13
Section 3.07. Realization Upon Defaulted Home Equity Loans..........................................14
Section 3.08. Issuer and Indenture Trustee to Cooperate.............................................15
Section 3.09. Servicing Compensation; Payment of Certain Expenses by Servicer.......................16
Section 3.10. Annual Statement as to Compliance.....................................................16
Section 3.11. Annual Servicing Report...............................................................17
Section 3.12. Access to Certain Documentation and Information Regarding the Home Equity Loans.......17
Section 3.13. Maintenance of Certain Servicing Insurance Policies...................................17
Section 3.14. Information Required by the Internal Revenue Service and Reports of
Foreclosures and Abandonments of Mortgaged Property...................................18
Section 3.15. [Reserved]............................................................................18
Section 3.16. Payment of Taxes, Insurance and Other Charges.........................................18
Section 3.17. Optional Retransfers of Home Equity Loans.............................................18
ARTICLE IV.
Servicing Reports
Section 4.01. Statements to Securityholders.........................................................19
Section 4.02. Tax Reporting.........................................................................21
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ARTICLE V.
Payment Account
Section 5.01. Payment Account.......................................................................22
ARTICLE VI.
The Servicer
Section 6.01. Liability of the Servicer.............................................................23
Section 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer.........23
Section 6.03. Limitation on Liability of the Servicer and Others....................................23
Section 6.04. Servicer Not to Resign................................................................24
Section 6.05. Delegation of Duties..................................................................24
Section 6.06. Servicer to Pay Indenture Trustee's and Owner Trustee's Fees and Expenses;
Indemnification.......................................................................25
Section 6.07. Servicer to act as Administrator for the Owner Trustee................................25
ARTICLE VII.
Default
Section 7.01. Servicing Default.....................................................................26
Section 7.02. Indenture Trustee to Act; Appointment of Successor....................................28
Section 7.03. Notification to Securityholders.......................................................29
ARTICLE VIII.
Miscellaneous Provisions
Section 8.01. Amendment.............................................................................31
Section 8.02. GOVERNING LAW.........................................................................31
Section 8.03. Notices...............................................................................31
Section 8.04. Severability of Provisions............................................................31
Section 8.05. Third-Party Beneficiaries.............................................................32
Section 8.06. Counterparts..........................................................................32
Section 8.07. Effect of Headings and Table of Contents..............................................32
Section 8.08. Termination Upon Purchase by the Servicer or Liquidation of All Home Equity
Loans.................................................................................32
Section 8.09. Certain Matters Affecting the Indenture Trustee.......................................33
Section 8.10. Owner Trustee Not Liable for Related Documents........................................33
EXHIBIT A - HOME EQUITY LOAN SCHEDULE...........................................................................A-1
EXHIBIT B - POWER OF ATTORNEY...................................................................................B-1
EXHIBIT C - FORM OF REQUEST FOR RELEASE.........................................................................C-1
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This Servicing Agreement, dated as January 1, 2005, among
Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation (the "Servicer"), MSDWCC HELOC
Trust 2005-1 (the "Issuer"), and Xxxxx Fargo Bank, National Association (the
"Indenture Trustee").
W I T N E S S E T H T H A T:
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WHEREAS, pursuant to the terms of the Home Equity Loan
Purchase Agreement, Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation (in its
capacity as Seller) will sell to the Depositor the Home Equity Loans together
with the Related Documents on the Closing Date, and thereafter, with respect
to the Revolving Credit Loans, all Additional Balances created on or after the
Cut-off Date;
WHEREAS, the Depositor will transfer the Home Equity Loans
and all of its rights under the Home Equity Loan Purchase Agreement to the
Issuer, together with the Related Documents on the Closing Date, and
thereafter, with respect to the Revolving Credit Loans, all Additional
Balances created on or after the Cut-off Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the
Issuer will issue and transfer to or at the direction of the Depositor, the
Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer
will issue and transfer to or at the direction of the Depositor, the Notes;
and
WHEREAS, pursuant to the terms of this Servicing Agreement,
the Servicer will service the Home Equity Loans directly;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
Definitions
Section 1.01. Definitions. For all purposes of this Servicing
Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms not otherwise defined herein shall have
the meanings assigned to such terms in the Definitions contained in Appendix A
to the Indenture dated as of January 1, 2005 (the "Indenture"), between MSDWCC
HELOC Trust 2005-1, as issuer, and Xxxxx Fargo Bank, National Association, as
indenture trustee, which is incorporated by reference herein. All other
capitalized terms used herein shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Servicing Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Servicing Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or
in any such certificate or other document, to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Servicing Agreement
or in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Servicing Agreement shall refer to this Servicing
Agreement as a whole and not to any particular provision of this Servicing
Agreement; Section and Exhibit references contained in this Servicing
Agreement are references to Sections and Exhibits in or to this Servicing
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(d) The definitions contained in this Servicing Agreement are
applicable to the singular as well as the plural forms of such terms and to
the masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
Section 1.03. Interest Calculations. All calculations of interest
hereunder that are made in respect of the Loan Balance of a Home Equity Loan
shall be made on a daily basis using a 365/366-day year. All calculations of
interest on the Securities shall be made on the basis of the actual number of
days in an Interest Period and a year assumed to consist of 360 days. The
calculation of the Servicing Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day months. All dollar amounts calculated hereunder
shall be rounded to the nearest xxxxx with one-half of one xxxxx being rounded
up.
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ARTICLE II.
Representations and Warranties
Section 2.01. Representations and Warranties Regarding the Servicer.
The Servicer represents and warrants to the Issuer and for the benefit of the
Indenture Trustee, as pledgee of the Home Equity Loans and the Credit
Enhancer, as of the Cut-off Date:
(i) The Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power to own its assets and to transact the business in which it
is currently engaged. The Servicer is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or properties owned or leased by it
requires such qualification and in which the failure to so qualify would have
a material adverse effect on the business, properties, assets, or condition
(financial or other) of the Servicer;
(ii) The Servicer has the power and authority to make,
execute, deliver and perform this Servicing Agreement and all of the
transactions contemplated under this Servicing Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Servicing Agreement. When executed and delivered, this
Servicing Agreement will constitute the legal, valid and binding obligation of
the Servicer enforceable in accordance with its terms, except as enforcement
of such terms may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies;
(iii) The Servicer is not required to obtain the consent of
any other Person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Servicing Agreement, except for such consent, license,
approval or authorization, or registration or declaration, as shall have been
obtained or filed, as the case may be;
(iv) The execution and delivery of this Servicing Agreement
and the performance of the transactions contemplated hereby by the Servicer
will not violate any provision of any existing law or regulation or any order
or decree of any court applicable to the Servicer or any provision of the
Certificate of Incorporation or Bylaws of the Servicer, or constitute a
material breach of any mortgage, indenture, contract or other agreement to
which the Servicer is a party or by which the Servicer may be bound; and
(v) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Servicer threatened, against the Servicer or any of its
properties or with respect to this Servicing Agreement or the Securities which
in the opinion of the Servicer has a reasonable likelihood of resulting in a
material adverse effect on the transactions contemplated by this Servicing
Agreement.
The foregoing representations and warranties shall survive any
termination of the Servicer hereunder.
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Section 2.02. Representations and Warranties of the Issuer. The
Issuer hereby represents and warrants to the Servicer and for the benefit of
the Indenture Trustee, as pledgee of the Home Equity Loans and the Credit
Enhancer, as of the Cut-off Date:
(i) The Issuer is a statutory trust duly formed and in good
standing under the laws of the State of Delaware and has full power, authority
and legal right to execute and deliver this Servicing Agreement and to perform
its obligations under this Servicing Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Servicing Agreement; and
(ii) The execution and delivery by the Issuer of this
Servicing Agreement and the performance by the Issuer of its obligations under
this Servicing Agreement will not violate any provision of any law or
regulation governing the Issuer or any order, writ, judgment or decree of any
court, arbitrator or governmental authority or agency applicable to the Issuer
or any of its assets. Such execution, delivery, authentication and performance
will not require the authorization, consent or approval of, the giving of
notice to, the filing or registration with, or the taking of any other action
with respect to, any governmental authority or agency regulating the
activities of limited liability companies. Such execution, delivery,
authentication and performance will not conflict with, or result in a breach
or violation of, any mortgage, deed of trust, lease or other agreement or
instrument to which the Issuer is bound.
Section 2.03. Enforcement of Representations and Warranties. The
Servicer, on behalf of and subject to the direction of the Indenture Trustee,
as pledgee of the Home Equity Loans, the Credit Enhancer or the Issuer, shall
enforce the representations and warranties of the Seller pursuant to the Home
Equity Loan Purchase Agreement. Upon the discovery by the Seller, the
Depositor, the Servicer, the Indenture Trustee, the Credit Enhancer, the
Issuer, or any Custodian of a breach of any of the representations and
warranties made in the Home Equity Loan Purchase Agreement, in respect of any
Home Equity Loan which materially and adversely affects the interests of the
Securityholders or the Credit Enhancer, the party discovering such breach
shall give prompt written notice to the other parties (any Custodian being so
obligated under a Custodial Agreement). The Servicer shall promptly notify the
Seller of such breach and request that, pursuant to the terms of the Home
Equity Loan Purchase Agreement, the Seller either (i) cure such breach in all
material respects within 45 days (with respect to a breach of the
representations and warranties contained in Section 3.1(a) of the Home Equity
Loan Purchase Agreement) or 90 days (with respect to a breach of the
representations and warranties contained in Section 3.1(b) of the Home Equity
Loan Purchase Agreement) from the earlier of the Seller's discovery of such
breach or the date the Seller was notified of such breach or (ii) purchase
such Home Equity Loan from the Issuer at the Repurchase Price and in the
manner set forth in Section 3.1(c) of the Home Equity Loan Purchase Agreement;
provided that the Seller shall, subject to compliance with all the conditions
set forth in the Home Equity Loan Purchase Agreement, have the option to
substitute an Eligible Substitute Loan or Loans, together with any
Substitution Adjustment Amounts, for such Home Equity Loan. In the event that
the Seller elects to substitute one or more Eligible Substitute Loans pursuant
to Section 3.1(c) of the Home Equity Loan Purchase Agreement, the Seller shall
deliver to the Issuer with respect to such Eligible Substitute Loans, the
original Credit Line Agreement, the Mortgage, and such other documents and
agreements as are required by the Home Equity Loan Purchase Agreement.
Payments due with respect to Eligible Substitute Loans in the month of
substitution shall not be transferred to
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the Issuer and will be retained by the Servicer and remitted by the Servicer
to the Seller on the next succeeding Payment Date provided a payment at least
equal to the applicable Minimum Monthly Payment has been received by the
Issuer for the month of substitution in respect of the Home Equity Loan to be
removed. The Servicer shall amend or cause to be amended the Home Equity Loan
Schedule to reflect the removal of such Home Equity Loan and the substitution
of the Eligible Substitute Loans and the Servicer shall promptly deliver the
amended Home Equity Loan Schedule to the Owner Trustee and Indenture Trustee
together with a separate list of any Home Equity Loans so removed.
It is understood and agreed that the obligation of the Seller to cure
such breach or purchase or substitute for such Home Equity Loan as to which
such a breach has occurred and is continuing, together with the obligation of
the Seller in the third paragraph of Section 2.1(c) of the Home Equity Loan
Purchase Agreement and the indemnification provided in Section 6.1 of the Home
Equity Loan Purchase Agreement, shall constitute the sole remedy respecting
such breach available to the Issuer and the Indenture Trustee, as pledgee of
the Home Equity Loans, against the Seller. In connection with the purchase of
or substitution for any such Home Equity Loan by the Seller, the Issuer shall
assign to the Seller all of its right, title and interest in respect of the
Home Equity Loan Purchase Agreement applicable to such Home Equity Loan. Upon
receipt of the Repurchase Price, or upon completion of such substitution, the
Servicer shall notify the Custodian and then the Custodian shall deliver the
Mortgage Files to the Servicer, together with all relevant endorsements and
assignments prepared by the Servicer which the Indenture Trustee shall
execute.
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ARTICLE III.
Administration and Servicing
of Home Equity Loans
Section 3.01. The Servicer.
(a) The Servicer shall service and administer the Home Equity Loans
in a manner consistent with the terms of this Servicing Agreement and which
shall be normal and usual in its general mortgage servicing activities and
shall have full power and authority, acting alone or through a subservicer, to
do any and all things in connection with such servicing and administration
which it may deem necessary or desirable, it being understood, however, that
the Servicer shall at all times remain responsible to the Issuer and the
Indenture Trustee, as pledgee of the Home Equity Loans and the Credit
Enhancer, for the performance of its duties and obligations hereunder in
accordance with the terms hereof. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered
by the Issuer and the Indenture Trustee, as pledgee of the Home Equity Loans,
to execute and deliver, on behalf of itself, the Issuer, the Indenture Trustee
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments with
respect to the Home Equity Loans and with respect to the Mortgaged Properties.
The Issuer, the Indenture Trustee and the Custodian, as applicable, shall
furnish the Servicer with any powers of attorney and other documents necessary
or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. On the Closing Date, the Indenture Trustee
shall deliver to the Servicer a limited power of attorney substantially in the
form of Exhibit B hereto.
If the Mortgage relating to a Home Equity Loan did not have a Lien
senior to the Home Equity Loan on the related Mortgaged Property as of the
Cut-off Date, then the Servicer, in such capacity, may not consent to the
placing of a lien senior to that of the Mortgage on the related Mortgaged
Property. If the Mortgage relating to a Home Equity Loan had a lien senior to
the Home Equity Loan on the related Mortgaged Property as of the Cut-off Date,
then the Servicer, in such capacity, may consent to the refinancing of the
prior senior lien, provided that the following requirements are met:
(i) the resulting Combined Loan-to-Value Ratio ("CLTV") of
such Home Equity Loan is no higher than the greater of the Combined
Loan-to-Value Ratio prior to such refinancing or a 70% CLTV (or a 80% CLTV for
those borrowers with a Credit Score as of the Cut-off Date of 712 or greater);
provided, however, if such refinanced mortgage loan is a "rate and term"
mortgage loan (meaning, the borrower does not receive any cash from the
refinancing), the CLTV may increase to the extent of either (a) the reasonable
closing costs of such refinancing (up to a maximum of 5% of the CLTV) or (b)
any decrease in the value of the related Mortgaged Property, if the borrower
is not delinquent in the payment of interest or principal on such Home Equity
Loan at the time of such refinancing;
(ii) the interest rate for the loan evidencing the refinanced
senior lien is no higher than the interest rate on the loan evidencing the
existing senior lien immediately prior to the date of such refinancing
(meaning, in the case of an adjustable rate loan, a substantially
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similar index and a gross margin no higher than that of the existing senior
lien); provided, however, if the loan evidencing the existing senior lien
prior to the date of refinancing is an adjustable rate loan and the loan
evidencing the refinanced senior lien is a fixed rate loan, then the interest
rate on the loan evidencing the refinanced senior lien may be up to 2.0%
higher than the then-current mortgage rate of the loan evidencing the existing
senior lien; and
(iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.
The Servicer may also, without prior approval of the Rating Agencies
and the Credit Enhancer, increase the Credit Limits on Revolving Credit Loans,
provided that (i) a new appraisal in accordance with the Servicer's
underwriting or servicing guidelines is obtained, (ii) the new CLTV of any
such Revolving Credit Loan after giving effect to such increase is less than
or equal to the CLTV of the Revolving Credit Loan as of the Cut-off Date,
(iii) the Servicer receives verbal verification of employment of the related
Mortgagor and (iv) the payment history of the related borrower is within the
underwriting parameters of the Guide. In addition, the Servicer may increase
the Credit Limits on Revolving Credit Loans without obtaining new appraisals
provided that clauses (ii) through (iv) of the preceding sentence are
satisfied and the CLTV of the Revolving Credit Loan following the increase in
the Credit Limit is less than or equal to 100.00%. In addition, such increases
without new appraisals shall be limited to no greater than 10% of the current
Pool Balance, provided, that the principal balances of such Revolving Credit
Loans with CLTVs greater than 80% will be limited to 3% of the current Pool
Balance.
In connection with servicing the Revolving Credit Loans, the Servicer
may take reasonable actions to encourage or effect the termination of Loan
Agreements that have become dormant.
The relationship of the Servicer (and of any successor to the
Servicer as servicer under this Servicing Agreement) to the Issuer under this
Servicing Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) With the consent of the Credit Enhancer, the Servicer may enter
into Subservicing Agreements with Subservicers for the servicing and
administration of certain of the Home Equity Loans. References in this
Servicing Agreement to actions taken or to be taken by the Servicer in
servicing the Home Equity Loans include actions taken or to be taken by a
Subservicer on behalf of the Servicer and any amount actually received by such
Subservicer in respect of a Home Equity Loan shall be deemed to have been
received by the Servicer whether or not actually received by the Servicer.
Each Subservicing Agreement will be upon such terms and conditions as are not
inconsistent with this Servicing Agreement and as the Servicer and the
Subservicer have agreed. With the approval of the Servicer and the Credit
Enhancer, a Subservicer may delegate its servicing obligations to third-party
servicers, but such Subservicers will remain obligated under the related
Subservicing Agreements. The Servicer and the Subservicer may enter into
amendments to the related Subservicing Agreements; provided, however, that any
such amendments shall not cause the Home Equity Loans to be serviced in a
manner that would be materially inconsistent with the standards set forth in
this Servicing Agreement. With the consent of the Credit Enhancer, the
Servicer shall be entitled to terminate any Subservicing
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Agreement in accordance with the terms and conditions thereof and without any
limitation by virtue of this Servicing Agreement; provided, however, that in
the event of termination of any Subservicing Agreement by the Servicer or the
Subservicer, the Servicer shall either act as servicer of the related Home
Equity Loan or enter into a Subservicing Agreement with a successor
Subservicer which will be bound by the terms of the related Subservicing
Agreement. The Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer and nothing contained in this
Servicing Agreement shall be deemed to limit or modify such indemnification.
In the event that the rights, duties and obligations of the Servicer
are terminated hereunder, any successor to the Servicer in its sole discretion
may, to the extent permitted by applicable law, terminate the existing
Subservicing Agreement with any Subservicer in accordance with the terms of
the applicable Subservicing Agreement (but without the payment of any
termination fee) or assume the terminated Servicer's rights and obligations
under such subservicing arrangements which termination or assumption will not
violate the terms of such arrangements.
Notwithstanding any Subservicing Agreement or any of the provisions
of this Servicing Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the Servicer shall remain obligated and primarily liable for the
servicing and administering of the Home Equity Loans in accordance with the
provisions of this Servicing Agreement without diminution of such obligation
or liability by virtue of such Subservicing Agreements or arrangements or by
virtue of indemnification from the Subservicer and to the same extent and
under the same terms and conditions as if the Servicer alone were servicing
and administering the Home Equity Loans. For purposes of this Servicing
Agreement, the Servicer shall be deemed to have received payments on Home
Equity Loans when the Subservicer has received such payments.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Home Equity Loans involving a
Subservicer in its capacity as such and not as an originator shall be deemed
to be between the Subservicer and the Servicer alone, and none of the
Indenture Trustee, the Credit Enhancer or the Securityholders shall be deemed
parties thereto or shall have any claims, rights, obligations, duties or
liabilities with respect to the Subservicer. The Servicer shall be solely
liable for all fees owed by it to any Subservicer irrespective of whether the
Servicer's compensation pursuant to this Servicing Agreement is sufficient to
pay such fees.
As part of its servicing activities hereunder, the Servicer, for the
benefit of the Trust, the Securityholders and the Credit Enhancer, shall use
reasonable efforts to enforce the obligations of each Subservicer under the
related Subservicing Agreement, to the extent that the non-performance of any
such obligation would have a material adverse effect on a Home Equity Loan.
Such enforcement, including, without limitation, the legal prosecution of
claims, termination of Subservicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Servicer, in its good faith business judgment, would
require were it the owner of the related Home Equity Loans. The Servicer shall
pay the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement to
the extent, if any,
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that such recovery exceeds all amounts due in respect of the related Home
Equity Loan or (ii) from a specific recovery of costs, expenses or attorneys
fees against the party against whom such enforcement is directed.
Section 3.02. Collection of Certain Home Equity Loan Payments.
(a) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Home Equity Loans,
and shall, to the extent such procedures shall be consistent with this
Servicing Agreement follow such collection procedures as shall be normal and
usual in its general mortgage servicing activities. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Servicer
may in its discretion (i) waive any late payment charge, penalty interest or
other fees which may be collected in the ordinary course of servicing such
Home Equity Loan and (ii) arrange with a Mortgagor a schedule for the payment
of principal and interest due and unpaid; provided such arrangement is
generally consistent with the Servicer's policies with respect to home equity
loans generally; provided, further, that notwithstanding such arrangement such
Home Equity Loans will be included in the information regarding delinquent
Home Equity Loans set forth in the Servicing Report. The Servicer may also
extend the Due Date for payment due on a Home Equity Loan in accordance with
its standard servicing procedures, provided, however, that the Servicer shall
first determine that any such waiver or extension will not impair the coverage
of any related insurance policy or materially adversely affect the lien of the
related Mortgage or the interests of the Securityholders or the Credit
Enhancer. Consistent with the terms of this Servicing Agreement, the Servicer
may also waive, modify or vary any term of any Home Equity Loan (including
reduce the Credit Limit with respect to any Revolving Credit Loan) or consent
to the postponement of strict compliance with any such term or in any manner
grant indulgence to any Mortgagor if in the Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Securityholders or the Credit Enhancer, provided,
however, that the Servicer may not modify or permit any Subservicer to modify
any Home Equity Loan (including without limitation any modification that would
change the Loan Rate, forgive the payment of any principal or interest (unless
in connection with the liquidation of the related Home Equity Loan) or extend
the final maturity date of such Home Equity Loan) unless such Home Equity Loan
is in default or, in the judgment of the Servicer, such default is reasonably
foreseeable. The general terms of any waiver, modification, postponement or
indulgence with respect to any of the Home Equity Loans will be included in
the Servicing Report, and such Home Equity Loans will not be considered
"delinquent" for the purposes of the Basic Documents, so long as the Mortgagor
complies with the terms of such waiver, modification, postponement or
indulgence. Notwithstanding the foregoing, the Servicer in its sole discretion
(i) may permit the Mortgagor (or may enter into a modification agreement which
will allow the Mortgagor) to make monthly payments, with respect to any
Billing Cycle during the related Draw Period, in a minimum amount that will be
equal to the related finance charge for such Billing Cycle and (ii) may reduce
the amount of the Credit Limit with respect to any Revolving Credit Loans (to
an amount no less than the then current Principal Balance of such Revolving
Credit Loan) in connection with any refinancing of a senior lien pursuant to
the second paragraph of Section 3.01(a) of this Servicing Agreement.
(b) The Servicer shall establish a Collection Account in the name of
the Indenture Trustee on behalf of the Noteholders and the Credit Enhancer,
which shall be an Eligible
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Account in which the Servicer shall deposit or cause to be deposited any
amounts representing payments and collections in respect of the Home Equity
Loans received by it subsequent to the Cut-off Date (other than in respect of
the payments referred to in the paragraph following subsection (viii) below)
within two Business Days following receipt thereof (or otherwise on or prior
to the Closing Date), including the following payments and collections
received or made by it (without duplication):
(i) all payments of principal or interest on the Home Equity
Loans received by the Servicer, net of the Servicing Fee;
(ii) the aggregate Repurchase Price of the Home Equity Loans
purchased by the Servicer pursuant to Section 3.1 (c) of the Home Equity Loan
Purchase Agreement;
(iii) Net Liquidation Proceeds net of any related Foreclosure
Profit;
(iv) all proceeds of any Home Equity Loans repurchased by the
Seller pursuant to the Home Equity Loan Purchase Agreement, and all
Substitution Adjustment Amounts required to be deposited in connection with
the substitution of an Eligible Substitute Loan pursuant to the Home Equity
Loan Purchase Agreement;
(v) insurance proceeds, other than Net Liquidation Proceeds,
resulting from any insurance policy maintained on a Mortgaged Property;
(vi) amounts required to be paid by the Servicer pursuant to
Section 8.08;
(vii) any blanket policy deductible; and
(viii) any investment losses for amounts on deposit in the
Collection Account;
provided, however, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the Home
Equity Loans, the Servicing Fee for such Collection Period. All amounts
deposited in the Collection Account shall be held by the Servicer in trust for
the Securityholders and the Credit Enhancer until disbursed in accordance with
this Servicing Agreement. The foregoing requirements respecting deposits to
the Collection Account are exclusive, it being understood that, without
limiting the generality of the foregoing, the Servicer need not deposit in the
Collection Account amounts representing Foreclosure Profits, fees (including
annual fees) or late charge penalties, payable by Mortgagors, or amounts
received by the Servicer for the accounts of Mortgagors for application
towards the payment of taxes, insurance premiums, assessments and similar
items. In the event any amount not required to be deposited in the Collection
Account is so deposited, the Servicer may at any time withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding. The Servicer shall retain all Foreclosure Profits (to the
extent permitted by law) as additional servicing compensation.
The Servicer may cause the institution maintaining the Collection
Account to invest any funds in the Collection Account in Permitted Investments
(including obligations of the Servicer or any of its Affiliates, if such
obligations otherwise qualify as Permitted Investments), which shall mature
not later than the Determination Date related to the following Payment Date
and
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shall not be sold or disposed of prior to its maturity. Except as provided
above, all income and gain realized from any such investment shall inure to
the benefit of the Servicer and shall be subject to its withdrawal or order
from time to time. The amount of any losses incurred in respect of the
principal amount of any such investments shall be deposited in the Collection
Account by the Servicer out of its own funds immediately as realized.
(c) The Servicer will require each Subservicer to hold all funds
constituting collections on the Home Equity Loans, pending remittance thereof
to the Servicer, in one or more accounts meeting the requirements of an
Eligible Account, and invested in Permitted Investments.
Section 3.03. Withdrawals from the Collection Account. The Servicer
shall, from time to time as provided herein, make withdrawals from the
Collection Account of amounts on deposit therein pursuant to Section 3.02 that
are attributable to the Home Equity Loans for the following purposes:
(i) to remit to the Indenture Trustee for deposit in the
Payment Account, on the related Determination Date for each Payment Date, an
amount equal to the Security Collections for such Payment Date;
(ii) prior to either a Rapid Amortization Event or the
Collection Period preceding the end of the Managed Amortization Period, to pay
to the Seller, with respect to the Revolving Credit Loans, the amount of any
Additional Balances as and when created during the related Collection Period,
provided, that, with respect to the Revolving Credit Loans, the aggregate
amount so paid to the Seller in respect of Additional Balances at any time
during any Collection Period shall not exceed the amount of Principal
Collections theretofore received for such Collection Period;
(iii) to the extent deposited to the Collection Account, to
reimburse itself or the related Subservicer for previously unreimbursed
expenses incurred in maintaining individual insurance policies pursuant to
Section 3.04, or Liquidation Expenses, paid pursuant to Section 3.07 or
otherwise reimbursable pursuant to the terms of this Servicing Agreement (to
the extent not payable pursuant to Section 3.09), such withdrawal right being
limited to amounts received on particular Home Equity Loans (other than any
Repurchase Price in respect thereof) which represent late recoveries of the
payments for which such advances were made, or from related Liquidation
Proceeds or the proceeds of the purchase of such Home Equity Loan;
(iv) to pay to itself out of each payment received on account
of interest on a Home Equity Loan as contemplated by Section 3.09, an amount
equal to the Servicing Fee (to the extent not retained pursuant to Section
3.02);
(v) to the extent deposited in the Collection Account to pay
to itself as additional servicing compensation any interest or investment
income earned on funds deposited in the Collection Account that it is entitled
to withdraw pursuant to Sections 3.02(b) and 5.01;
(vi) to the extent deposited in the Collection Account, to pay
to itself as additional servicing compensation any Foreclosure Profits (to the
extent permitted by law); and
11
(vii) to withdraw any other amount deposited in the Collection
Account that was not required to be deposited therein pursuant to Section
3.02.
Since, in connection with withdrawals pursuant to clauses (iii), (iv) and
(vi), the Servicer's entitlement thereto is limited to collections or other
recoveries on the related Home Equity Loan, the Servicer shall keep and
maintain separate accounting, on a Home Equity Loan by Home Equity Loan basis,
for the purpose of justifying any withdrawal from the Collection Account
pursuant to such clauses. Notwithstanding any other provision of this
Servicing Agreement, the Servicer shall be entitled to reimburse itself for
any previously unreimbursed expenses incurred pursuant to Section 3.07 or
otherwise reimbursable pursuant to the terms of this Servicing Agreement that
the Servicer determines to be otherwise nonrecoverable (except with respect to
any Home Equity Loan as to which the Repurchase Price has been paid), by
withdrawal from the Collection Account of amounts on deposit therein
attributable to the Home Equity Loans on any Business Day prior to the
Determination Date following the date of such calculation.
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Home Equity Loan
that is either (a) in a first lien position or (b) has a Credit Limit at
origination in excess of $50,000 hazard insurance naming the Servicer or
related Subservicer as loss payee thereunder providing extended coverage in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements securing such Home Equity Loan from time to time or
(ii) the combined principal balance owing on such Home Equity Loan and any
mortgage loan senior to such Home Equity Loan from time to time; provided,
however, that such coverage may not be less than the minimum amount required
to fully compensate for any loss or damage on a replacement cost basis. The
Servicer shall also cause to be maintained on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Home Equity Loan, fire
insurance with extended coverage in an amount sufficient to cover the value of
the related Mortgaged Property (less the amount of any deductible). Amounts
collected by the Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance with
the Servicer's normal servicing procedures) shall be deposited in the
Collection Account to the extent called for by Section 3.02. The Servicer
shall be under no obligation to require that any Mortgagor maintain earthquake
or other additional insurance and shall be under no obligation itself to
maintain any such additional insurance on property acquired in respect of a
Home Equity Loan, other than pursuant to such applicable laws and regulations
as shall at any time be in force and as shall require such additional
insurance. If the Servicer shall obtain and maintain a blanket policy
consistent with its general mortgage servicing activities insuring against
hazard losses on all of the Home Equity Loans, it shall conclusively be deemed
to have satisfied its obligations as set forth in the first sentence of this
Section 3.04, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.04 and there shall have
been a loss which would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Servicer shall be
made on the last Business Day of the Collection Period in the month in which
payments under any such policy would have been deposited in the Collection
Account. In connection with its
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activities as servicer of the Home Equity Loans, the Servicer agrees to
present, on behalf of itself, the Issuer and the Indenture Trustee, claims
under any such blanket policy.
Section 3.05. Modification Agreements. The Servicer shall be entitled
to (A) execute assumption agreements, substitution agreements, and instruments
of satisfaction or cancellation or of partial or full release or discharge, or
any other document contemplated by this Servicing Agreement and other
comparable instruments with respect to the Home Equity Loans and with respect
to the Mortgaged Properties subject to the Mortgages (and the Issuer and the
Indenture Trustee each shall promptly execute any such documents on request of
the Servicer) and (B) approve the granting of an easement thereon in favor of
another Person, any alteration or demolition of the related Mortgaged Property
or other similar matters, if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Home Equity Loan, that the security for, and the timely and full
collectability of, such Home Equity Loan would not be adversely affected
thereby. A partial release pursuant to this Section 3.05 shall be permitted
only if the Combined Loan-to-Value Ratio for such Home Equity Loan after such
partial release does not exceed the Combined Loan-to-Value Ratio for such Home
Equity Loan as of the Cut-off Date. Any fee collected by the Servicer or the
related Subservicer for processing such request will be retained by the
Servicer or such Subservicer as additional servicing compensation.
Section 3.06. Trust Estate; Related Documents.
(a) When required by the provisions of this Servicing Agreement, the
Issuer or the Indenture Trustee shall execute instruments to release property
from the terms of the Trust Agreement, Indenture or Custodial Agreement, as
applicable, or convey the Issuer's or the Indenture Trustee's interest in the
same, in a manner and under circumstances which are not inconsistent with the
provisions of this Servicing Agreement. No party relying upon an instrument
executed by the Issuer or the Indenture Trustee as provided in this Section
3.06 shall be bound to ascertain the Issuer's or the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any moneys.
(b) If from time to time the Servicer shall deliver to the Custodian
copies of any written assurance, assumption agreement or substitution
agreement or other similar agreement pursuant to Section 3.05, the Custodian
shall check that each such document purports to be an original executed copy
(or a copy of the original executed document if the original executed copy has
been submitted for recording and has not yet been returned) and, if so, shall
file such documents, and upon receipt of the original executed copy from the
applicable recording office or receipt of a copy thereof certified by the
applicable recording office shall file such originals or certified copies with
the Related Documents. If any such documents submitted by the Servicer do not
meet the above qualifications, such documents shall promptly be returned by
the Custodian to the Servicer, with a direction to the Servicer to forward the
correct documentation.
(c) Upon receipt of two copies (one of which will be returned to the
Servicer with the related Mortgage File) of a Request for Release from the
Servicer, substantially in the form of Exhibit C which shall be signed by a
Servicing Officer or in a mutually agreeable format, which in lieu of a
signature on its face will originate from a Servicing Officer, to the effect
that a Home Equity Loan has been the subject of a final payment or a
prepayment in full and the related
13
Home Equity Loan has been terminated or that substantially all Liquidation
Proceeds which have been determined by the Servicer in its reasonable judgment
to be finally recoverable have been recovered, and upon deposit to the
Collection Account of such final monthly payment, prepayment in full together
with accrued and unpaid interest to the date of such payment with respect to
such Home Equity Loan or, if applicable, Liquidation Proceeds, the Custodian
shall promptly release the related Mortgage File to the Servicer, upon request
of the Servicer. If from time to time and as appropriate for the servicing or
foreclosure of any Home Equity Loan, the Servicer requests the Custodian to
release the Mortgage File and delivers to the Custodian two copies of a
Request for Release reasonably satisfactory to the Custodian and signed by a
Responsible Officer of the Servicer, the Custodian shall release the related
Mortgage File to the Servicer. If such Home Equity Loans shall be liquidated
and the Custodian receives a certificate from the Servicer as provided above,
then, upon request of the Servicer, the Custodian shall release the Mortgage
File to the Servicer.
Section 3.07. Realization Upon Defaulted Home Equity Loans. With
respect to those of the Home Equity Loans which become and continue in
default, the Servicer will decide whether to (i) foreclose upon the Mortgaged
Properties securing such Home Equity Loans, (ii) write off the unpaid
principal balance of the Home Equity Loans as bad debt, (iii) take a deed in
lieu of foreclosure, (iv) accept a short sale, (v) arrange for a repayment
plan, (vi) agree to a modification in accordance with this Servicing
Agreement, or (vii) take an unsecured note or substitute a new lien, in each
case subject to the rights of any related first lien holder; provided that in
connection with the foregoing if the Servicer has actual knowledge that any
Mortgaged Property is affected by hazardous or toxic wastes or substances and
that the acquisition of such Mortgaged Property would not be commercially
reasonable, then the Servicer will not cause the Issuer or the Indenture
Trustee to acquire title to such Mortgaged Property in a foreclosure or
similar proceeding. In connection with such decision, the Servicer shall
follow such practices (including, in the case of any default on a related
senior mortgage loan, the advancing of funds to correct such default if deemed
to be appropriate by the Servicer) and procedures as it shall deem necessary
or advisable and as shall be normal and usual in its general mortgage
servicing activities; provided that the Servicer shall not be liable in any
respect hereunder if the Servicer is acting in connection with any such
foreclosure or attempted foreclosure which is not completed or other
conversion in a manner that is consistent with the provisions of this
Servicing Agreement. The foregoing is subject to the proviso that the Servicer
shall not be required to expend its own funds in connection with any
foreclosure or attempted foreclosure or towards the correction of any default
on a related senior mortgage loan or restoration of any property unless it
shall determine that such expenditure will increase Net Liquidation Proceeds.
In the event of a determination by the Servicer that any such expenditure
previously made pursuant to this Section 3.07 will not be reimbursable from
Net Liquidation Proceeds, the Servicer shall be entitled to reimbursement of
its funds so expended pursuant to Section 3.03.
Notwithstanding any provision of this Servicing Agreement, a Home
Equity Loan may be deemed to be finally liquidated if substantially all
amounts expected by the Servicer to be received in connection with the related
defaulted Home Equity Loan have been received; provided, however, that any
subsequent collections with respect to any such Home Equity Loan shall be
deposited to the Collection Account. For purposes of determining the amount of
any Liquidation Proceeds or Insurance Proceeds, or other unscheduled
collections, the Servicer may take into account minimal amounts of additional
receipts expected to be received or any
14
estimated additional liquidation expenses expected to be incurred in
connection with the related defaulted Home Equity Loan.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, who shall hold the same on behalf of
the Issuer in accordance with Section 3.13 of the Indenture. Notwithstanding
any such acquisition of title and cancellation of the related Home Equity
Loan, such Mortgaged Property shall (except as otherwise expressly provided
herein) be considered to be an outstanding Home Equity Loan held as an asset
of the Issuer until such time as such property shall be sold. Consistent with
the foregoing for purposes of all calculations hereunder, so long as such
Mortgaged Property shall be considered to be an outstanding Home Equity Loan
it shall be assumed that, notwithstanding that the indebtedness evidenced by
the related Credit Line Agreement shall have been discharged, such Credit Line
Agreement in effect at the time of any such acquisition of title before any
adjustment thereto by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period will remain in effect.
Any proceeds from foreclosure proceedings or the purchase or
repurchase of any Home Equity Loan pursuant to the terms of this Servicing
Agreement, as well as any recovery resulting from a collection of Liquidation
Proceeds or Insurance Proceeds, will be applied in the following order of
priority: first, to reimburse the Servicer in accordance with Section
3.03(vii) and this Section 3.07; second, to the Servicer, all Servicing Fees
payable therefrom (to the extent not retained pursuant to Section 3.02(b));
third, to the Payment Account to the extent of accrued and unpaid interest to
the Payment Date on the related Home Equity Loan, at the Loan Rate (less the
Servicing Fee Rate); fourth, to the Payment Account as a recovery of principal
on the Home Equity Loan; and fifth, to Foreclosure Profits (to the extent
permitted by law).
Section 3.08. Issuer and Indenture Trustee to Cooperate. On or before
each Determination Date, the Servicer will notify the Indenture Trustee and
the Custodian, with a copy to the Issuer, of the termination of or the payment
in full and the termination of any Home Equity Loan during the preceding
Collection Period. Upon receipt of payment in full, the Servicer is authorized
to execute, pursuant to the authorization contained in Section 3.01, if the
assignments of Mortgage have been recorded if required under the Home Equity
Loan Purchase Agreement, an instrument of satisfaction regarding the related
Mortgage, which instrument of satisfaction shall be recorded by the Servicer
if required by applicable law and be delivered to the Person entitled thereto.
It is understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the Collection Account. From time to time and as appropriate for
the servicing or foreclosure of any Home Equity Loan, the Indenture Trustee or
the Custodian shall, upon request of the Servicer and delivery to the
Indenture Trustee or Custodian, with a copy to the Issuer, of two copies (one
of which will be returned to the Servicer with the related Mortgage File) of a
Request for Release, in the form annexed hereto as Exhibit C, which shall be
signed by a Servicing Officer or in a mutually agreeable electronic format
which in lieu of a signature on its face will originate from a Servicing
Officer, release or cause to be released the related Mortgage File to the
Servicer and the Issuer or Indenture Trustee shall promptly execute such
documents, in the forms provided by the Servicer, as shall be necessary for
the prosecution of any such proceedings or the taking of other servicing
actions. Such trust receipt shall obligate the Servicer to return the Mortgage
File to the Indenture Trustee or the Custodian (as specified in such
15
receipt) when the need therefor by the Servicer no longer exists unless the
Home Equity Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
trust receipt shall be released to the Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Home Equity Loan that is in default following recordation of the assignments
of Mortgage in accordance with the provisions of the Home Equity Loan Purchase
Agreement, the Indenture Trustee or the Issuer shall, if so requested in
writing by the Servicer, promptly execute an appropriate assignment in the
form provided by the Servicer to assign such Home Equity Loan for the purpose
of collection to the Servicer (any such assignment shall unambiguously
indicate that the assignment is for the purpose of collection only), and, upon
such assignment, such assignee for collection will thereupon bring all
required actions in its own name and otherwise enforce the terms of the Home
Equity Loan and deposit or credit the Net Liquidation Proceeds, exclusive of
Foreclosure Profits, received with respect thereto in the Collection Account.
In the event that all delinquent payments due under any such Home Equity Loan
are paid by the Mortgagor and any other defaults are cured, then the assignee
for collection shall promptly reassign such Home Equity Loan to the Indenture
Trustee and return the related Mortgage File to the Custodian.
In connection with the Issuer's obligation to cooperate as provided
in this Section 3.08 and all other provisions of this Servicing Agreement
requiring the Issuer to authorize or permit any actions to be taken with
respect to the Home Equity Loans, the Indenture Trustee, as pledgee of the
Home Equity Loans and as assignee of record of the Home Equity Loans on behalf
of the Issuer pursuant to Section 3.13 of the Indenture, expressly agrees, on
behalf of the Issuer, to take all such actions on behalf of the Issuer and to
promptly execute and return all instruments reasonably required by the
Servicer in connection therewith; provided that if the Servicer shall request
a signature of the Indenture Trustee, on behalf of the Issuer, the Servicer
will deliver to the Indenture Trustee an Officer's Certificate stating that
such signature is necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties under this Servicing Agreement.
Section 3.09. Servicing Compensation; Payment of Certain Expenses by
Servicer. The Servicer shall be entitled to receive the Servicing Fee in
accordance with Section 3.03 (or retain such Servicing Fee pursuant to Section
3.02) as compensation for its services in connection with servicing the Home
Equity Loans. Moreover, additional servicing compensation in the form of late
payment charges and other receipts not required to be deposited in the
Collection Account as specified in Section 3.02 shall be retained by the
Servicer. The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder (including payment of all other fees
and expenses not expressly stated hereunder to be for the account of the
Securityholders, including, without limitation, the Indenture Trustee and any
Custodian) and shall not be entitled to reimbursement therefor.
Section 3.10. Annual Statement as to Compliance.
(a) The Servicer will deliver to the Issuer, the Underwriter and the
Indenture Trustee, with a copy to the Credit Enhancer, on or before the last
day of February of each year, beginning February 2006, an Officer's
Certificate stating that (i) a review of the activities of the Servicer during
the preceding fiscal year and of its performance under servicing agreements,
including
16
this Servicing Agreement has been made under such officer's supervision and
(ii) to the best of such officer's knowledge, based on such review, the
Servicer has complied in all material respects with the minimum servicing
standards set forth in the Uniform Single Attestation Program for Mortgage
Bankers and has fulfilled all of its material obligations in all material
respects throughout such year, or, if there has been material noncompliance
with such servicing standards or a default in the fulfillment in all material
respects of any such obligation relating to this Servicing Agreement, such
statement shall include a description of such noncompliance or specify each
such default, as the case may be, known to such officer and the nature and
status thereof.
(b) The Servicer shall deliver to the Issuer and the Indenture
Trustee, with a copy to the Credit Enhancer, promptly after having obtained
knowledge thereof, but in no event later than five Business Days thereafter,
written notice by means of an Officer's Certificate of any event which with
the giving of notice or the lapse of time or both, would become a Servicing
Default.
(c) Upon the reasonable request of the Indenture Trustee, the
Servicer will provide to the Indenture Trustee a copy of its financial
statements for the most recent fiscal year; provided that such financial
statements are available for distribution.
Section 3.11. Annual Servicing Report. On or before the last day of
February of each year, beginning February 2006, the Servicer at its expense
shall cause a firm of nationally recognized independent public accountants
(who may also render other services to the Servicer) to furnish a report to
the Issuer, the Indenture Trustee, the Depositor, each Underwriter, the Credit
Enhancer and each Rating Agency stating its opinion that, on the basis of an
examination conducted by such firm substantially in accordance with standards
established by the American Institute of Certified Public Accountants, the
assertions made pursuant to Section 3.10 regarding compliance with the minimum
servicing standards set forth in the Uniform Single Attestation Program for
Mortgage Bankers during the preceding fiscal year are fairly stated in all
material respects, subject to such exceptions and other qualifications that,
in the opinion of such firm, such accounting standards require it to report.
In rendering such statement, such firm may rely, as to matters relating to the
direct servicing of home equity loans by Subservicers, upon comparable
statements for examinations conducted by independent public accountants
substantially in accordance with standards established by the American
Institute of Certified Public Accountants (rendered within one year of such
statement) with respect to such Subservicers.
Section 3.12. Access to Certain Documentation and Information
Regarding the Home Equity Loans. Whenever required by statute or regulation,
the Servicer shall provide to the Credit Enhancer, any Securityholder upon
reasonable request (or a regulator for a Securityholder) or the Indenture
Trustee, reasonable access to the documentation regarding the Home Equity
Loans such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer.
Nothing in this Section 3.12 shall derogate from the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section 3.12 as a result of such obligation shall not
constitute a breach of this Section 3.12.
17
Section 3.13. Maintenance of Certain Servicing Insurance Policies.
The Servicer shall during the term of its service as servicer maintain in
force (i) a policy or policies of insurance covering errors and omissions in
the performance of its obligations as Servicer hereunder and (ii) a fidelity
bond in respect of its officers, employees or agents. Each such policy or
policies and bond shall be at least equal to the coverage that would be
required by FNMA or FHLMC, whichever is greater, for Persons performing
servicing for home equity loans purchased by such entity.
Section 3.14. Information Required by the Internal Revenue Service
and Reports of Foreclosures and Abandonments of Mortgaged Property. The
Servicer shall prepare and deliver all federal and state information reports
with respect to the Home Equity Loans when and as required by all applicable
state and federal income tax laws. In particular, with respect to the
requirement under Section 6050J of the Code to the effect that the Servicer or
Subservicer shall make reports of foreclosures and abandonments of any
mortgaged property for each year beginning in 2005, the Servicer or
Subservicer shall file reports relating to each instance occurring during the
previous calendar year in which the Servicer (i) on behalf of the Issuer,
acquires an interest in any Mortgaged Property through foreclosure or other
comparable conversion in full or partial satisfaction of a Home Equity Loan,
or (ii) knows or has reason to know that any Mortgaged Property has been
abandoned. The reports from the Servicer or Subservicer shall be in form and
substance sufficient to meet the reporting requirements imposed by Section
6050J and Section 6050H (reports relating to mortgage interest received) of
the Code.
Section 3.15. [Reserved].
Section 3.16. Payment of Taxes, Insurance and Other Charges. With
respect to each Home Equity Loan, the Servicer will maintain accurate records
reflecting fire and hazard insurance coverage to the extent required by
Section 3.04.
With respect to each Home Equity Loan as to which the Servicer
maintains escrow accounts, the Servicer shall maintain accurate records
reflecting the status of ground taxes, assessments, water rates and other
charges which are or may become a lien upon the Mortgaged Property and the
status of primary mortgage guaranty premiums, if any, shall maintain fire and
hazard insurance coverage and shall obtain, from time to time, all bills for
the payment of such charges (including renewal premiums) and shall effect
payment thereof prior to any applicable penalty or termination date and at a
time appropriate for securing the maximum amounts allowable, employing for
such purpose deposits of the Mortgagor in any escrow account which shall have
been estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. To the extent that a
Mortgage does not provide for escrow payments, the Servicer shall, if it has
received notice of a default or a deficiency, monitor such payments to
determine if they are made by the Mortgagor.
Section 3.17. Optional Retransfers of Home Equity Loans. Pursuant to
Section 2.3 of the Home Equity Loan Purchase Agreement, the Servicer, in its
capacity as Seller, may, but shall not be obligated to, require the retransfer
of Home Equity Loans from the Trust to the Seller as of the close of business
on a Transfer Date after giving notice to the Indenture Trustee on the Notice
Transfer Date. Any such retransfers shall be permissible only upon the
satisfaction of the conditions set forth in Section 2.3 of the Home Equity
Loan Purchase Agreement.
18
ARTICLE IV.
Servicing Reports
Section 4.01. Statements to Securityholders.
(a) With respect to each Payment Date, on the related Determination
Date, the Servicer shall forward to the Indenture Trustee monthly Servicing
Reports in a mutually agreeable electronic format. The Servicing Reports shall
set forth the following information to the extent applicable:
(i) the aggregate amount of (a) Interest Collections, (b)
Principal Collections, (c) Substitution Adjustment Amounts and (d) Investor
P&I Collections;
(ii) (a) the aggregate Loan Balance of the Home Equity Loans
as of the end of the preceding Collection Period, (b) the Investor Amount, (c)
the aggregate Loan Balance of the Mortgage Loans and (d) the aggregate Loan
Balance of the Revolving Credit Loans;
(iii) with respect to the Revolving Credit Loans, the
aggregate amount of Additional Balances created during the previous Collection
Period conveyed to the Issuer;
(iv) the number and aggregate Loan Balances of Home Equity
Loans (a) as to which the Minimum Monthly Payment is delinquent for 30-59
days, 60-89 days and 90 or more days, respectively, (b) that are foreclosed
and (c) that have become REO, in each case as of the end of the preceding
Collection Period; provided, however, that such information will not be
provided on the statements relating to the first Payment Date;
(v) the aggregate Liquidation Loss Amounts with respect to the
related Collection Period, the amount of any Liquidation Loss Distribution
Amounts with respect to the Notes, and the aggregate of the Liquidation Loss
Amounts from all Collection Periods to date expressed as dollars and as a
percentage of the aggregate Cut-off Date Loan Balance;
(vi) the aggregate Servicing Fees for the related Collection
Period and the aggregate amount of Draws for the related Collection Period;
(vii) the aggregate outstanding principal balance of the three
Home Equity Loans having the largest outstanding principal balances or Credit
Limits, as applicable for the related Collection Period;
(viii) the number and aggregate outstanding principal balances
of the Home Equity Loans which are 180 or more days delinquent in the payment
of all or any portion of the scheduled interest or principal for the related
Collection Period;
(ix) the 60+ Delinquency Percentage (Rolling Six Month) for
the related Collection Period;
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(x) the number and the aggregate Loan Balances of Liquidated
Home Equity Loans for the related Collection Period; and
(xi) the number and the aggregate Loan Balances of Home Equity
Loans having an outstanding principal balance (or any other amounts owing but
otherwise unpaid) as of or following the final maturity date as set forth in
the Related Documents respecting such Home Equity Loans.
The Indenture Trustee pursuant to Section 3.26 of the Indenture shall prepare
its monthly Statement based solely on the information contained in the
Servicing Reports and shall make available such Statements to each
Certificateholder, Noteholder, the Credit Enhancer, the Depositor, the Owner
Trustee, the Certificate Paying Agent and each Rating Agency. The Indenture
Trustee may conclusively rely on the correctness of the information contained
in the Servicing Reports, without independent verification thereof. The
Statements to Securityholders shall contain the information in the Servicing
Report and the following information:
(i) the amount of any distribution of principal to the
Noteholders;
(ii) the amount of any distribution of interest to the
Noteholders, separately stating the portion thereof in respect of overdue
accrued interest;
(iii) the amount of any Credit Enhancement Draw Amount, if any,
for such Payment Date and the aggregate amount of prior draws thereunder not
yet reimbursed;
(iv) the amount of such distribution as principal and interest
to the Certificateholders of each Class of Certificates, separately stating
the portion thereof which resulted in a reduction of the Certificate Principal
Balance thereof;
(v) the weighted average Net Loan Rate for the related
Collection Period;
(vi) the Security Balance of the Notes and the Class Principal
Balance of each Class of Certificates after giving effect to the distribution
of principal on such Payment Date;
(vii) the Required Overcollateralization Amount for the
related Payment Date; and
(viii) the Overcollateralization Amount for the related
Payment Date.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as an aggregate dollar amount per Note
or Certificate, as applicable, with a $1,000 denomination.
The Indenture Trustee will make the monthly statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to the Noteholders, the Certificateholders, and
the other parties described in the second preceding paragraph via the
Indenture Trustee's internet website. The Indenture Trustee's internet website
shall initially be located at "xxx.xxxxxxx.xxx". Assistance in using the
website can be obtained
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by calling the Indenture Trustee's customer service desk at (000) 000-0000.
Parties that are unable to use the above Statement distribution option are
entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk and indicating such. The Indenture Trustee shall
have the right to change the way monthly Statements are distributed in order
to make such distribution more convenient and/or more accessible to the
Noteholders and the Certificateholders and the Indenture Trustee shall provide
timely and adequate notification to all the Noteholders and the
Certificateholders regarding any such changes. The Indenture Trustee shall
deliver to the Credit Enhancer a paper copy of such monthly Statements.
In addition, the Servicer shall forward to the Indenture Trustee any
other information reasonably requested by the Indenture Trustee necessary to
make payments pursuant to Section 3.05 of the Indenture. Prior to the close of
business on each Determination Date, the Servicer shall furnish a written
statement to the Certificate Paying Agent and the Indenture Trustee setting
forth the aggregate amounts required to be withdrawn from the Collection
Account and deposited into the Payment Account on such Determination Date
pursuant to Section 3.03. The determination by the Servicer of such amounts
shall, in the absence of obvious error, be presumptively deemed to be correct
for all purposes hereunder and the Certificate Paying Agent and Indenture
Trustee shall be protected in relying upon the same without any independent
check or verification. In addition, upon the Issuer's written request, the
Servicer shall promptly furnish information reasonably requested by the Issuer
that is reasonably available to the Servicer to enable the Issuer to perform
its federal and state income tax reporting obligations.
Section 4.02. Tax Reporting. So long as Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit
Corporation or any affiliate thereof owns 100% of the Certificates, then no
separate federal and state income tax returns and information returns or
reports will be filed with respect to the Issuer, and the Issuer will be
treated for tax purposes as an entity wholly owned by Xxxxxx Xxxxxxx Xxxx
Xxxxxx Credit Corporation or an affiliate thereof.
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ARTICLE V.
Payment Account
Section 5.01. Payment Account. The Indenture Trustee shall establish
and maintain a Payment Account titled "Xxxxx Fargo Bank, National Association,
as Indenture Trustee, for the benefit of the Securityholders, the Certificate
Paying Agent and the Credit Enhancer pursuant to the Indenture, dated as of
January 1, 2005, between MSDWCC HELOC Trust 2005-1 and Xxxxx Fargo Bank,
National Association". The Payment Account shall be an Eligible Account. On
each Payment Date, amounts on deposit in the Payment Account will be
distributed by the Indenture Trustee in accordance with Section 3.05 of the
Indenture. For the period beginning on and including the Determination Date
and ending on but excluding the third Business Day prior to the Payment Date,
the Indenture Trustee shall invest or cause the institution maintaining the
Payment Account to invest the funds in the Payment Account as directed by the
Servicer, but only in Permitted Investments designated in the name of the
Indenture Trustee, which shall mature not later than the third Business Day
prior to the Payment Date next following the date of such investment and shall
not be sold or disposed of prior to maturity. Thereafter, the Indenture
Trustee may invest the funds in the Payment Account for its own benefit and at
its direction but only in Permitted Investments which should mature not later
than (i) the Business Day preceding the Payment Date or (ii) with respect to
Permitted Investments described in clause (v) of the definition thereof that
are managed by the Indenture Trustee or its Affiliates or for which the
Indenture Trustee or any Affiliate acts as advisor, the Payment Date. All
income and gain realized from any such investment for the period beginning on
and including the Determination Date to but excluding such third Business Day
prior to the Payment Date shall be for the benefit of the Servicer and shall
be subject to withdrawal by the Indenture Trustee for payment to the Servicer
from time to time. All income and gain realized from any such investment for
the period beginning on the third Business Day preceding the Payment Date and
ending on the Business Day preceding the Payment Date pursuant to clause (i)
above, or the Payment Date pursuant to clause (ii) above, as the case may be,
shall be for the benefit of the Indenture Trustee. The amount of any losses
incurred in respect of any such investments shall be deposited in the Payment
Account by the party which made the investment decision resulting in such loss
(i.e., either the Servicer or the Indenture Trustee, as the case may be), out
of its own funds immediately as realized.
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ARTICLE VI.
The Servicer
Section 6.01. Liability of the Servicer. The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Servicer herein.
Section 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. Any corporation into which the Servicer may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any corporation succeeding to the business of the
Servicer, shall (with the consent of the Credit Enhancer, which consent shall
not be unreasonably withheld if such merger, conversion or consolidation is
with an Affiliate of the Servicer and provided that the resulting Person is of
reasonably equivalent capitalization) be the successor of the Servicer,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
The Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; provided that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
home equity loans, is reasonably satisfactory to the Indenture Trustee (as
pledgee of the Home Equity Loans), the Issuer and the Credit Enhancer, is
willing to service the Home Equity Loans and executes and delivers to the
Indenture Trustee and the Issuer an agreement, in form and substance
reasonably satisfactory to the Credit Enhancer, the Indenture Trustee and the
Issuer, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Servicing Agreement; provided further that
each Rating Agency's rating of the Securities in effect immediately prior to
such assignment and delegation will not be qualified, reduced, or withdrawn as
a result of such assignment and delegation (as evidenced by a letter to such
effect from each Rating Agency), if determined without regard to the Credit
Enhancement Instrument; and provided further that the Owner Trustee and the
Credit Enhancer receive an Opinion of Counsel to the effect that such
assignment or delegation shall not cause the Owner Trust to be treated as a
corporation for federal or state income tax purposes.
Section 6.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or
agents of the Servicer shall be under any liability to the Issuer, the Owner
Trustee, the Indenture Trustee or the Securityholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, provided, however, that this provision shall not protect
the Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard of
its obligations and duties hereunder. The Servicer and any director or officer
or employee or agent of the Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Servicer and any director or officer or
employee or agent of the Servicer shall be indemnified by the Issuer pursuant
to Section 3.05(a)(i) and Section 3.05(a)(ix) of the Indenture
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and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Servicing Agreement or the
Securities, other than any loss, liability or expense incurred by reason of
its willful misfeasance, bad faith or negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations and
duties hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Home Equity Loans in accordance with this Servicing Agreement, and
which in its opinion may involve it in any expense or liability; provided,
however, that the Servicer may in its sole discretion undertake any such
action which it may deem necessary or desirable in respect of this Servicing
Agreement, and the rights and duties of the parties hereto and the interests
of the Securityholders. In such event, the reasonable legal expenses and costs
of such action and any liability resulting therefrom shall be expenses, costs
and liabilities of the Issuer, and the Servicer shall be entitled to be
reimbursed therefor. The Servicer's right to indemnity or reimbursement
pursuant to this Section 6.03 shall survive any resignation or termination of
the Servicer pursuant to Section 6.04 or 7.01 with respect to any losses,
expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination).
Section 6.04. Servicer Not to Resign. Subject to the provisions of
Section 6.02, the Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of
this Servicing Agreement or (ii) upon satisfaction of the following
conditions: (a) the Servicer has proposed a successor servicer to the Issuer
and the Indenture Trustee in writing and such proposed successor servicer is
reasonably acceptable to the Issuer and the Indenture Trustee, (b) each Rating
Agency shall have delivered a letter to the Issuer, the Credit Enhancer and
the Indenture Trustee prior to the appointment of the successor servicer
stating that the proposed appointment of such successor servicer as Servicer
hereunder will not result in the qualification, reduction or withdrawal of the
then current rating of the Securities, if determined without regard to the
Credit Enhancement Instrument; and (c) such proposed successor servicer is
acceptable to the Credit Enhancer, as evidenced by a letter to the Issuer and
the Indenture Trustee; provided, however, that no such resignation by the
Servicer shall become effective until such successor servicer or, in the case
of (i) above, the Indenture Trustee, as pledgee of the Home Equity Loans,
shall have assumed the Servicer's responsibilities and obligations hereunder
or the Indenture Trustee, as pledgee of the Home Equity Loans, shall have
designated a successor servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive
the resignation or termination of the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Indenture Trustee and the Credit
Enhancer.
Section 6.05. Delegation of Duties. In the ordinary course of
business, the Servicer at any time may delegate any of its duties hereunder to
any Person, including any of its Affiliates, who agrees to conduct such duties
in accordance with standards comparable to those with which the Servicer
complies pursuant to Section 3.01. Such delegation shall not relieve the
Servicer of
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its liabilities and responsibilities with respect to such duties and shall not
constitute a resignation within the meaning of Section 6.04.
Section 6.06. Servicer to Pay Indenture Trustee's and Owner Trustee's
Fees and Expenses; Indemnification.
(a) The Servicer covenants and agrees to pay to the Owner Trustee,
the Indenture Trustee and any co-trustee of the Indenture Trustee or the Owner
Trustee from time to time, and the Owner Trustee, the Indenture Trustee and
any such co-trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by each of them in the
execution of the trusts created under the Trust Agreement and the Indenture or
any other Basic Document and in the exercise and performance of any of the
powers and duties under the Trust Agreement or the Indenture, as the case may
be, of the Owner Trustee, the Indenture Trustee and any co-trustee, and the
Servicer will pay or reimburse the Indenture Trustee and any co-trustee upon
request for all reasonable expenses, disbursements and advances incurred or
made by the Indenture Trustee or any co-trustee in accordance with any of the
provisions of this Servicing Agreement except any such expense, disbursement
or advance as may arise from its negligence, willful misfeasance or bad faith.
The Servicer further agrees to indemnify the Owner Trustee in the same manner
and to the same extent as is provided by the holder of the majority of the
Certificate Percentage Interest of the [Class O] Certificates in Section 7.02
of the Trust Agreement.
(b) The Servicer shall indemnify and hold harmless the Trust, the
Credit Enhancer, the Indenture Trustee and the Owner Trustee from and against
any loss, liability, expense, damage or injury suffered or sustained by reason
of the Servicer's willful misfeasance, bad faith or negligence in the
performance of its activities in any material respect in servicing or
administering the Home Equity Loans pursuant to this Servicing Agreement,
including, but not limited to, any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim related to the
Servicer's willful misfeasance, bad faith or negligence in the performance of
its activities in any material respect in servicing or administering the Home
Equity Loans pursuant to this Servicing Agreement. Any such indemnification
shall not be payable from the assets of the Trust. The provisions of this
Section 6.06 shall survive the termination of this Servicing Agreement.
Section 6.07. Servicer to act as Administrator for the Owner Trustee.
The Servicer shall perform all its duties and the duties of the Issuer under
the Indenture and other Basic Documents, unless otherwise specifically
delegated to another party therein. In furtherance of the foregoing, the
Servicer shall take all necessary action that is the duty of the Issuer to
take pursuant to the Indenture and other Basic Documents, unless such duty has
been specifically delegated to another party therein.
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ARTICLE VII.
Default
Section 7.01. Servicing Default. If any one of the following events
("Servicing Default") shall occur and be continuing:
(i) Any failure by the Servicer (a) to deposit in the
Collection Account any deposit required to be made under the terms of this
Servicing Agreement or to make payments to be made under the terms of the
Insurance Agreement which continues unremedied for a period of five Business
Days or (b) to deposit in the Payment Account any deposit required to be made
under the terms of this Servicing Agreement which continues unremedied for a
period of one Business Day after the date upon which written notice of such
failure shall have been given to the Servicer by the Issuer or the Indenture
Trustee, or to the Servicer, the Issuer and the Indenture Trustee by the
Credit Enhancer; or
(ii) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in the Securities or in this Servicing Agreement or the
Insurance Agreement, which failure, in each case, materially and adversely
affects the interests of Securityholders or the Credit Enhancer and which
continues unremedied for a period of 45 days or 60 days, respectively, after
the date on which written notice of such failure, requiring the same to be
remedied, and stating that such notice is a "Notice of Default" hereunder,
shall have been given to the Servicer by the Issuer or the Indenture Trustee,
or to the Servicer, the Issuer and the Indenture Trustee by the Credit
Enhancer; or
(iii) The entry against the Servicer of a decree or order by
a court or agency or supervisory authority having jurisdiction in the premises
for the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(iv) The Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator, receiver, liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property, or a decree or order of
a court, agency or supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver, liquidator or similar person
in any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Servicer and such decree or order shall
have remained in force undischarged, unbonded or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations; or
26
(v) the long-term unsecured debt rating of Xxxxxx Xxxxxxx or
any successor and surviving entity with Controlling Interest in the Servicer
is suspended, terminated or downgraded below "Baa3" by Xxxxx'x or "BBB-" by
S&P and the Servicer Performance Test is not satisfied; or
(vi) there has been a Change of Ownership and the Servicer
Test is not satisfied;
then, and in every such case, so long as a Servicing Default shall not have
been remedied by the Servicer, either the Issuer or the Indenture Trustee (to
the extent a Responsible Officer of the Indenture Trustee has actual knowledge
of such Servicing Default), with the prior written consent of the Credit
Enhancer, or the Credit Enhancer, by notice then given in writing to the
Servicer (and to the Issuer and the Indenture Trustee if given by the Credit
Enhancer) may terminate all of the rights and obligations of the Servicer as
servicer under this Servicing Agreement other than its right to receive
servicing compensation and expenses for servicing the Home Equity Loans
hereunder during any period prior to the date of such termination and the
Issuer or the Indenture Trustee, with the prior written consent of the Credit
Enhancer, or the Credit Enhancer may exercise any and all other remedies
available at law or equity. Any such notice to the Servicer shall also be
given to each Rating Agency, the Credit Enhancer and the Issuer. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Servicing Agreement, whether with respect to the
Securities or the Home Equity Loans or otherwise, shall pass to and be vested
in a successor servicer designated by the Credit Enhancer (or if the Credit
Enhancer does not designate a successor servicer, the Indenture Trustee as
pledgee of the Home Equity Loans), pursuant to and under this Section 7.01;
and, without limitation, such successor servicer or the Indenture Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Home Equity Loan and related
documents, or otherwise; provided, that, without affecting the immediate
termination of the rights of the Servicer hereunder, it is understood and
acknowledged by the parties hereto that there will be a period of transition,
not to exceed 90 days from the provision of notice hereunder before the
servicing transfer is fully effected; and provided, further, that any failure
by the Indenture Trustee or any successor servicer to perform such duties or
responsibilities caused by the Servicer's failure to provide the documents and
records required by Section 7.01 hereof shall not be considered a default by
the Indenture Trustee (as successor to the Servicer hereunder, or any
successor servicer). The Servicer agrees to cooperate with such successor
servicer or the Indenture Trustee in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to such successor servicer or the Indenture Trustee
for the administration by it of all cash amounts relating to the Home Equity
Loans that shall at the time be held by the Servicer and have yet to be
deposited by it in the Collection Account, or that have been deposited by the
Servicer in the Collection Account or are thereafter received by the Servicer
with respect to the Home Equity Loans. All reasonable costs and expenses
(including, but not limited to, attorneys' fees) incurred in connection with
amending this Servicing Agreement to reflect such succession as Servicer
pursuant to this Section 7.01 shall be paid by the predecessor Servicer (or if
the predecessor Servicer is the Indenture Trustee, the initial Servicer) upon
presentation of reasonable documentation of such costs and expenses.
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Notwithstanding the foregoing, a delay in or failure of performance
under Section 7.01(i) or under Section 7.01(ii) after the applicable grace
periods specified in such Sections, shall not constitute a Servicing Default
if such delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of
God or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes. The preceding sentence shall not
relieve the Servicer from using reasonable efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Servicing
Agreement and the Servicer shall provide the Indenture Trustee, the Credit
Enhancer and the Securityholders with notice of such failure or delay by it,
together with a description of its efforts to so perform its obligations. The
Servicer shall immediately notify the Indenture Trustee, the Credit Enhancer
and the Owner Trustee in writing of any Servicing Default.
Notwithstanding anything to the contrary in this Agreement, the
Indenture Trustee is not obligated to determine whether the Servicer Test or
Servicer Performance Test has been satisfied or monitor whether there has been
a Change of Ownership.
Section 7.02. Indenture Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 7.01 or sends a notice pursuant to Section
6.04, the Indenture Trustee shall appoint a successor servicer in accordance
with the instruction of the Credit Enhancer, or if the Credit Enhancer does
not provide the Indenture Trustee such instruction within 30 days of such
notice, the Indenture Trustee, in a period not to exceed 90 days, shall
appoint a successor Servicer or shall itself become the successor in all
respects to the Servicer in its capacity as servicer under this Servicing
Agreement and in connection with the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and
provisions hereof. Notwithstanding the foregoing, the parties hereto agree
that the Indenture Trustee, in its capacity as successor servicer, immediately
will assume all of the obligations of the Servicer to make advances hereunder.
During such 90 day period, neither the Indenture Trustee nor any successor
servicer shall be responsible for any lack of information or documents that it
cannot reasonably obtain on a practical basis under the circumstances. Neither
the Indenture Trustee nor any successor servicer shall be liable for any
action taken by the terminated Servicer during such 90 day period. Nothing in
this Servicing Agreement, the Indenture or in the Trust Agreement shall be
construed to permit or require the Indenture Trustee to (i) succeed to the
responsibilities, duties and liabilities of the initial Servicer in its
capacity as Seller under the Home Equity Loan Purchase Agreement, (ii) be
responsible or accountable for any act or omission of the Servicer prior to
the issuance of a notice of termination hereunder, (iii) require or obligate
the Indenture Trustee, in its capacity as successor servicer, to purchase,
repurchase or substitute any Home Equity Loan, (iv) fund any Additional
Balances with respect to any Revolving Credit Loans, (v) fund any losses on
any Permitted Investment directed by any other Servicer, or (vi) be
responsible for the representations and warranties of the Servicer. As
compensation therefor, any successor servicer other than the Indenture Trustee
shall be entitled to such compensation as it and the Credit Enhancer may agree
upon and, if the Indenture Trustee is the successor servicer, the Indenture
Trustee shall be entitled to such compensation as the Servicer would have been
entitled to hereunder if no such notice of termination had been given. The
predecessor Servicer shall also pay the Transition
28
Costs of the Indenture Trustee or other servicer as successor servicer. To the
extent not paid by the predecessor Servicer, any Transition Costs incurred by
the Indenture Trustee shall be paid pursuant to Section 3.05(a)(i) of the
Indenture. Notwithstanding the above, (i) if the Credit Enhancer does not
direct the appointment of a successor servicer and if the Indenture Trustee is
unwilling to act as successor servicer itself or appoint a successor to act as
successor servicer, or (ii) if the Credit Enhancer does not direct the
appointment of a successor servicer and if the Indenture Trustee is legally
unable so to act, the Indenture Trustee may (in the situation described in
clause (i)) or shall (in the situation described in clause (ii)) appoint or
petition a court of competent jurisdiction to appoint any established housing
and home finance institution, bank or other mortgage loan or home equity loan
servicer having a net worth of not less than $10,000,000 as the successor to
the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder; provided
that any such successor servicer shall be acceptable to the Credit Enhancer,
as evidenced by the Credit Enhancer's prior written consent which consent
shall not be unreasonably withheld or delayed and provided further that the
appointment of any such successor servicer will not result in the
qualification, reduction or withdrawal of the ratings assigned to the
Securities by the Rating Agencies, if determined without regard to the Credit
Enhancement Instrument. Pending appointment of a successor to the Servicer
hereunder, unless the Indenture Trustee is prohibited by law from so acting,
the Indenture Trustee, in a period not to exceed 90 days, shall itself succeed
or appoint a successor to succeed to all of the rights and duties of the
Servicer hereunder hereinabove provided. In connection with such appointment
and assumption, the successor shall be entitled to receive compensation out of
payments on Home Equity Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.09 (or such other
compensation as the Credit Enhancer and such successor shall agree, together
with the Transition Costs of the successor servicer, which shall be paid by
the predecessor Servicer). The appointment of a successor servicer shall not
affect any liability of the predecessor Servicer which may have arisen under
this Servicing Agreement prior to its termination as Servicer (including,
without limitation, the obligation to purchase Home Equity Loans pursuant to
Section 3.01, to pay any deductible under an insurance policy pursuant to
Section 3.04 or to indemnify the Indenture Trustee, the Trust, the Credit
Enhancer and the Owner Trustee pursuant to Section 6.06), nor shall any
successor servicer be liable for any acts or omissions of the predecessor
Servicer or for any breach by such predecessor servicer of any of its
representations or warranties contained herein or in any related document or
agreement. The Indenture Trustee and such successor shall take such action,
consistent with this Servicing Agreement, as shall be necessary to effectuate
any such succession.
(b) Any successor, including the Indenture Trustee, to the Servicer
as servicer shall during the term of its service as servicer (i) continue to
service and administer the Home Equity Loans for the benefit of the
Securityholders and the Credit Enhancer, (ii) maintain in force a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so
required pursuant to Section 3.13 and (iii) be bound by the terms of the
Insurance Agreement.
(c) Any successor servicer, including the Indenture Trustee, shall
not be deemed in default or to have breached its duties hereunder if the
predecessor Servicer shall fail to deliver
29
any required deposit to the Collection Account or otherwise cooperate with any
required servicing transfer or succession hereunder.
Section 7.03. Notification to Securityholders. Upon any termination
of or appointment of a successor to the Servicer pursuant to this Article VII
or Section 6.04, the Indenture Trustee shall give prompt written notice
thereof to the Securityholders, the Credit Enhancer, the Issuer and each
Rating Agency.
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ARTICLE VIII.
Miscellaneous Provisions
Section 8.01. Amendment. This Servicing Agreement may be amended from
time to time by the parties hereto, with the prior written consent of the
Credit Enhancer, provided that the Rating Agencies be given notice of any such
amendment.
Section 8.02. GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Section 8.03. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by certified mail, return receipt requested,
to (a) in the case of the Servicer, Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit
Corporation, 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Vice
President of Secondary Marketing with a copy to the Law Division, (b) in the
case of the Credit Enhancer, Ambac Assurance Corporation, Xxx Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000, Attention: Consumer Asset-Backed Securities,
Confirmation: 212-668-0340, Telecopy No. 000-000-0000; (c) in the case of
Xxxxx'x, Home Mortgage Loan Monitoring Group, 4th Floor, 00 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (d) in the case of Standard & Poor's, 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance Group,
(e) in the case of the Owner Trustee, Wilmington Trust Company, Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, (f) in the
case of the Issuer, to MSDWCC HELOC Trust 2005-1, c/o Owner Trustee,
Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000-0000, (g) in the case of the Indenture Trustee, to
Xxxxx Fargo Bank, National Association, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx, 00000, Attention: Corporate Trust Series -- XXXXXX 0000-0, with a
copy to Xxxxx Fargo Bank, National Association, X.X. Xxx 00, Xxxxxxxx,
Xxxxxxxx, 00000 and to the Indenture Trustee's Corporate Trust Office and (h)
in the case of the Underwriter, Xxxxxx Xxxxxxx & Co. Incorporated, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party. Any notice required or permitted to be mailed to a
Securityholder shall be given by first class mail, postage prepaid, at the
address of such Securityholder as shown in the Register. Any notice so mailed
within the time prescribed in this Servicing Agreement shall be conclusively
presumed to have been duly given, whether or not the Securityholder receives
such notice. Any notice or other document required to be delivered or mailed
by the Indenture Trustee to any Rating Agency shall be given on a reasonable
efforts basis and only as a matter of courtesy and accommodation and the
Indenture Trustee shall have no liability for failure to deliver such notice
or document to any Rating Agency.
Section 8.04. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Servicing Agreement shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable
31
from the remaining covenants, agreements, provisions or terms of this
Servicing Agreement and shall in no way affect the validity or enforceability
of the other provisions of this Servicing Agreement or of the Securities or
the rights of the Securityholders thereof.
Section 8.05. Third-Party Beneficiaries. This Servicing Agreement
will inure to the benefit of and be binding upon the parties hereto, the
Securityholders, the Credit Enhancer, the Owner Trustee and their respective
successors and permitted assigns. Except as otherwise provided in this
Servicing Agreement, no other Person will have any right or obligation
hereunder.
Section 8.06. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 8.07. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 8.08. Termination Upon Purchase by the Servicer or
Liquidation of All Home Equity Loans.
(a) The respective obligations and responsibilities of the Servicer,
the Issuer and the Indenture Trustee created hereby shall terminate upon the
last action required to be taken by the Issuer pursuant to the Trust Agreement
and by the Indenture Trustee pursuant to the Indenture following the earlier
of:
(i) the date on or before which the Indenture or Trust
Agreement is terminated, or
(ii) the purchase by the Servicer from the Issuer of all Home
Equity Loans and all property acquired in respect of any Home Equity Loan at a
price equal to 100% of the unpaid Loan Balance of each Home Equity Loan, plus
accrued and unpaid interest thereon at the Weighted Average Net Loan Rate up
to the day preceding the Payment Date on which such amounts are to be
distributed to Securityholders, plus any amounts due and owing to the Credit
Enhancer and the Indenture Trustee under the Basic Documents (any unpaid
Servicing Fee shall be deemed paid at such time).
The right of the Servicer to purchase the assets of the Issuer pursuant to
clause (ii) above is conditioned upon the Pool Balance as of such date being
less than ten percent of the aggregate of the Cut-off Date Loan Balances of
the Home Equity Loans. If such right is exercised by the Servicer, the
Servicer shall deposit the amount calculated pursuant to clause (ii) above
with the Indenture Trustee pursuant to Section 4.10 of the Indenture and, upon
the receipt of such deposit, the Indenture Trustee or Custodian shall release
to the Servicer, the Mortgage Files pertaining to the Home Equity Loans being
purchased.
(b) The Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee for execution, at the time the Home Equity Loans are to be
released to the Servicer, appropriate
32
documents assigning each such Home Equity Loan from the Indenture Trustee or
the Issuer to the Servicer or the appropriate party.
Section 8.09. Certain Matters Affecting the Indenture Trustee. For
all purposes of this Servicing Agreement, in the performance of any of its
duties or in the exercise of any of its powers hereunder, the Indenture
Trustee shall be subject to and entitled to the benefits of Article VI of the
Indenture.
Section 8.10. Owner Trustee Not Liable for Related Documents. The
recitals contained herein shall be taken as the statements of the Depositor,
and the Owner Trustee assumes no responsibility for the correctness thereof.
The Owner Trustee makes no representations as to the validity or sufficiency
of this Servicing Agreement, of any Basic Document or of the Certificates
(other than the signatures of the Owner Trustee on the Certificates) or the
Notes, or of any Related Documents. The Owner Trustee shall at no time have
any responsibility or liability with respect to the sufficiency of the Owner
Trust Estate or its ability to generate the payments to be distributed to
Certificateholders under the Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Issuer, the Depositor or the
Seller with any warranty or representation made under any Basic Document or in
any related document or the accuracy of any such warranty or representation,
or any action of the Certificate Paying Agent, the Certificate Registrar or
the Indenture Trustee taken in the name of the Owner Trustee.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Home Equity Loans or under this Servicing Agreement or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
For all purposes of this Servicing Agreement, in the performance of any duties
or obligations of the Issuer hereunder, the Owner Trustee shall be subject to,
and entitled to the benefits of, the terms and provisions of Article VI, VII
and VIII of the Trust Agreement.
33
IN WITNESS WHEREOF, the Servicer, the Indenture Trustee and the
Issuer have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.
XXXXXX XXXXXXX XXXX XXXXXX CREDIT CORPORATION,
as Servicer
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------------
Title: Vice President and Treasurer
MSDWCC HELOC TRUST 2005-1
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ Xxx Xxxxx
-------------------------------------------
Title: Vice President
34
EXHIBIT A
HOME EQUITY LOAN SCHEDULE
TO BE PROVIDED UPON REQUEST
A-1
EXHIBIT B
LIMITED POWER OF ATTORNEY
Xxxxx Fargo Bank, National Association, (the "Principal"), in its capacity as
indenture trustee under that certain Servicing Agreement relating to MSDWCC
HELOC Trust 2005-1, HELOC Asset Backed Notes, Series 2005-1, dated as of
January 1, 2005 (the "Agreement") by and among MSDWCC HELOC Trust 2005-1
(Issuer), Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation (Servicer) and Xxxxx
Fargo Bank, National Association (Indenture Trustee).
hereby constitutes and appoints:
Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation
its true and lawful attorney-in-fact (the "Attorney-in-Fact"), acting by and
through its officers and employees, with full authority and power to execute
and deliver on behalf of Principal any and all of the following instruments to
the extent consistent with the terms and conditions of the Agreement:
(i) All documents with respect to any of the mortgages or deeds
of trust securing the Home Equity Loans (as defined in the
Agreement) serviced for Principal by said attorney-in-fact
which are customarily and reasonably necessary and appropriate
to the satisfaction, cancellation, or partial or full release
of mortgages, deeds of trust or deeds to secure debt upon
payment and discharge of all sums secured thereby;
(ii) Instruments appointing one or more substitute trustees to
act in place of the trustees named in Deeds of Trust;
(iii) Affidavits of debt, notice of default, declaration of
default, notices of foreclosure, and all such contracts,
agreements, deeds, assignments and instruments as are
appropriate to effect any sale, transfer or disposition of real
property acquired through foreclosure or otherwise;
(iv) All other comparable instruments.
B-1
This Limited Power of Attorney is effective as of the date below and shall
remain in full force and effect until revoked in writing by the undersigned or
termination of the Agreement, whichever is earlier.
Dated: XXXXXXXXXX Xxxxx Fargo Bank, National Association
As Indenture Trustee under the Agreement
By:
-------------------------------------
By:
Its:
Attest:
--------------------------------------
By:
---------------------------------
Its: Asst. Secretary
Unofficial Witnesses:
--------------------------------------
--------------------------------------
B-2
STATE OF
COUNTY OF ss:
On the ____ day of __________, 2005 before me, a Notary Public in and
for said State, personally appeared ___________________, known to me to be
___________________ of Xxxxx Fargo Bank, National Association, and also known
to me to be the person who executed this Power of Attorney on behalf of said
bank, and acknowledged to me that such bank executed this Power of Attorney.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal the day and year written above.
______________________________
Notary Public
My commission expires______________
B-3
STATE OF )
SS.
COUNTY OF )
On this __th day of January, 2005, before me the undersigned, Notary
Public of said State, personally appeared _______________________________
personally known to me to be duly authorized officers of Xxxxx Fargo Bank,
National Association that executed the within instrument and personally known
to me to be the persons who executed the within instrument on behalf of Xxxxx
Fargo Bank, National Association therein named, and acknowledged to me such
Xxxxx Fargo Bank, National Association executed the within instrument pursuant
to its by-laws.
WITNESS my hand and official seal.
Notary Public in and for the
State of
After recording, please mail to:
Attn:
B-4
EXHIBIT C
FORM OF REQUEST FOR RELEASE
To: Xxxxx Fargo Bank, National Association
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000-0000
Attn: Inventory Control
Re: Custodial Agreement dated as of ____, among
_________________________________ and Xxxxx Fargo
Bank, National Association, as Custodian
In connection with the administration of the Home Equity Loans held
by you as Custodian for the Owner pursuant to the above-captioned Custodial
Agreement, we request the release, and hereby acknowledge receipt, of the
Custodian's Mortgage File for the Home Equity Loan described below, for the
reason indicated.
Home Equity Loan Number
Mortgagor Name, Address & Zip Code
Reason for Requesting Documents (check one):
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation (Repurchases, etc.)
_______ 5. Nonliquidation Reason:_____________________
Address to which Custodian should
Deliver the Custodian's Mortgage File:________________________________________
________________________________________
________________________________________
By:____________________________________
(authorized signer)
Issuer:________________________________
Address:_______________________________
_______________________________
Date:_________________________________
Custodian
Xxxxx Fargo Bank, National Association
Please acknowledge the execution of the above request your signature and date
below:
_______________________________________ ______________________________
Signature Date
Documents returned to Custodian:
C-1
________________________________________
Custodian Date
C-2
C-3
