MORGAN STANLEY MORTGAGE CAPITAL INC. Purchaser and NATIONAL CITY MORTGAGE CO., Company FOURTH AMENDED AND RESTATED MASTER SELLER’S WARRANTIES AND SERVICING AGREEMENT Dated as of July 1, 2006 Conventional Mortgage Loans
Exhibit
99.12b
EXECUTION
VERSION
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
Purchaser
and
NATIONAL
CITY MORTGAGE CO.,
Company
FOURTH
AMENDED AND RESTATED MASTER SELLER’S WARRANTIES AND
SERVICING
AGREEMENT
Dated
as
of
July 1,
2006
________________________________________
Conventional
Mortgage Loans
TABLE
OF
CONTENTS
Page
|
ARTICLE
I
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|
DEFINITIONS
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ARTICLE
II
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CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
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BOOKS
AND RECORDS; DELIVERY OF DOCUMENTS
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|
Section
2.01
|
Conveyance
of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing
Files
|
17
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Section
2.02
|
Purchase
Price
|
18
|
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Section
2.03
|
Books
and Records; Transfers of Mortgage Loans
|
18
|
|
Section
2.04
|
Delivery
of Documents
|
19
|
|
Section
2.05
|
Closing
Documents
|
20
|
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ARTICLE
III
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|
REPRESENTATIONS
AND WARRANTIES;
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REMEDIES
AND BREACH
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|
Section
3.01
|
Company
Representations and Warranties
|
20
|
|
Section
3.02
|
Representations
and Warranties Regarding Individual Mortgage Loans
|
24
|
|
Section
3.03
|
Remedies
for Breach of Representations and Warranties
|
38
|
|
Section
3.04
|
Review
of Mortgage Loans
|
41
|
|
Section
3.05
|
Repurchase
of Mortgage Loans that Prepay in Full; Certain Defaults; Missing
Documents
|
41
|
|
ARTICLE
IV
|
||
|
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
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|
Section
4.01
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Company
to Act as Servicer
|
42
|
|
Section
4.02
|
Liquidation
of Mortgage Loans
|
44
|
|
Section
4.03
|
Collection
of Mortgage Loan Payments
|
45
|
|
Section
4.04
|
Establishment
of and Deposits to Custodial Account
|
46
|
|
Section
4.05
|
Permitted
Withdrawals From Custodial Account
|
47
|
|
Section
4.06
|
Establishment
of and Deposits to Escrow Account
|
48
|
|
Section
4.07
|
Permitted
Withdrawals From Escrow Account
|
49
|
|
Section
4.08
|
Payment
of Taxes, Insurance and Other Charges
|
50
|
|
Section
4.09
|
Protection
of Accounts
|
50
|
-i-
|
Section
4.10
|
Maintenance
of Hazard Insurance
|
51
|
|
Section
4.11
|
Maintenance
of Mortgage Impairment Insurance
|
52
|
|
Section
4.12
|
Maintenance
of Fidelity Bond and Errors and Omissions Insurance
|
53
|
|
Section
4.13
|
Inspections
|
53
|
|
Section
4.14
|
Restoration
of Mortgaged Property
|
53
|
|
Section
4.15
|
Maintenance
of PMI and LPMI Policy; Claims
|
54
|
|
Section
4.16
|
Title,
Management and Disposition of REO Property
|
56
|
|
Section
4.17
|
Real
Estate Owned Reports
|
57
|
|
Section
4.18
|
Liquidation
Reports
|
57
|
|
Section
4.19
|
Reports
of Foreclosures and Abandonments of Mortgaged Property
|
57
|
|
Section
4.20
|
Notification
of Adjustments
|
57
|
|
Section
4.21
|
Transfer
of Servicing
|
58
|
|
Section
4.22
|
Fair
Credit Reporting Act
|
60
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ARTICLE
V
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|
PAYMENTS
TO PURCHASER
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Section
5.01
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Remittances
|
61
|
|
Section
5.02
|
Statements
to Purchaser
|
61
|
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Section
5.03
|
Monthly
Advances by Company
|
62
|
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ARTICLE
VI
|
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|
GENERAL
SERVICING PROCEDURES
|
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|
Section
6.01
|
Transfers
of Mortgaged Property
|
62
|
|
Section
6.02
|
Satisfaction
of Mortgages and Release of Mortgage Files
|
63
|
|
Section
6.03
|
Servicing
Compensation
|
63
|
|
Section
6.04
|
Right
to Examine Company Records
|
64
|
|
ARTICLE
VII
|
||
|
WHOLE
LOAN TRANSFERS AND SECURITIZATION TRANSACTIONS
|
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|
Section
7.01
|
Removal
of Mortgage Loans from Inclusion Under this Agreement Upon a Whole-Loan
Transfer or a Securitization Transaction on One or More Reconstitution
Dates
|
64
|
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ARTICLE
VIII
|
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|
COMPANY
TO COOPERATE
|
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|
Section
8.01
|
Provision
of Information
|
67
|
|
Section
8.02
|
Financial
Statements; Servicing Facility
|
67
|
-ii-
|
ARTICLE
IX
|
||
|
THE
COMPANY
|
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|
Section
9.01
|
Indemnification;
Third Party Claims
|
68
|
|
Section
9.02
|
Merger
or Consolidation of the Company
|
69
|
|
Section
9.03
|
Limitation
on Liability of Company and Others
|
69
|
|
Section
9.04
|
Limitation
on Resignation and Assignment by Company
|
70
|
|
ARTICLE
X
|
||
|
DEFAULT
|
||
|
Section
10.01
|
Events
of Default
|
71
|
|
Section
10.02
|
Waiver
of Defaults
|
72
|
|
ARTICLE
XI
|
||
|
TERMINATION
|
||
|
Section
11.01
|
Termination
|
72
|
|
Section
11.02
|
Termination
Without Cause
|
73
|
|
ARTICLE
XII
|
||
|
MISCELLANEOUS
PROVISIONS
|
||
|
Section
12.01
|
Successor
to Company
|
73
|
|
Section
12.02
|
Amendment
|
74
|
|
Section
12.03
|
Governing
Law; Jurisdiction; Consent to Service of Process
|
75
|
|
Section
12.04
|
Duration
of Agreement
|
75
|
|
Section
12.05
|
Notices
|
75
|
|
Section
12.06
|
Severability
of Provisions
|
76
|
|
Section
12.07
|
Relationship
of Parties
|
76
|
|
Section
12.08
|
Execution;
Successors and Assigns
|
76
|
|
Section
12.09
|
Recordation
of Assignments of Mortgage
|
77
|
|
Section
12.10
|
Assignment
by Purchaser
|
77
|
|
Section
12.11
|
No
Personal Solicitation
|
77
|
|
Section
12.12
|
Waiver
of Trial by Jury
|
77
|
|
Section
12.13
|
Confidentiality
|
78
|
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ARTICLE
XIII
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|
COMPLIANCE
WITH REGULATION AB
|
||
|
Section
13.01
|
Intent
of the Parties; Reasonableness
|
78
|
-iii-
|
Section
13.02
|
Additional
Representations and Warranties of the Company
|
79
|
|
Section
13.03
|
Information
to Be Provided by the Company
|
80
|
|
Section
13.04
|
Servicer
Compliance Statement
|
85
|
|
Section
13.05
|
Report
on Assessment of Compliance and Attestation
|
85
|
|
Section
13.06
|
Use
of Subservicers and Subcontractors
|
86
|
|
Section
13.07
|
Indemnification;
Remedies
|
87
|
|
EXHIBIT
A
|
MORTGAGE
LOAN SCHEDULE
|
|
EXHIBIT
B
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
C
|
MORTGAGE
LOAN DOCUMENTS
|
|
EXHIBIT
D-1
|
FORM
OF CUSTODIAL ACCOUNT CERTIFICATION
|
|
EXHIBIT
D-2
|
FORM
OF CUSTODIAL ACCOUNT LETTER
AGREEMENT
|
|
EXHIBIT
E-1
|
FORM
OF ESCROW ACCOUNT CERTIFICATION
|
|
EXHIBIT
E-2
|
FORM
OF ESCROW ACCOUNT LETTER
AGREEMENT
|
|
EXHIBIT
F
|
[RESERVED]
|
|
EXHIBIT
G
|
PROCESS
GUIDELINES
|
|
EXHIBIT
H
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
I
|
COMPANY’S
OFFICER’S CERTIFICATE
|
|
EXHIBIT
J
|
FORM
OF OPINION OF COUNSEL TO THE COMPANY
|
|
EXHIBIT
K
|
SECURITY
RELEASE CERTIFICATION
|
|
EXHIBIT
L
|
ASSIGNMENT
AND CONVEYANCE
|
|
EXHIBIT
M
|
ANNUAL
CERTIFICATION
|
|
EXHIBIT
N
|
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
|
|
EXHIBIT
O
|
|
|
EXHIBIT
P
|
FORM
OF ASSIGNMENT AND RECOGNITION
AGREEMENT
|
-iv-
This
is a
Fourth Amended and Restated Master Seller’s Warranties and Servicing Agreement
for various residential mortgage loans (collectively, the “Mortgage Loans, dated
and effective as of July 1, 2006, is executed between Xxxxxx Xxxxxxx
Mortgage Capital Inc. as purchaser (the “Purchaser”), and National City
Mortgage Co., as seller and servicer (the “Company” or the
“Servicer”).
W I T N E S S E T H:
WHEREAS,
the Purchaser and the Company are parties to that certain Master Seller’s
Warranties and Servicing Agreement, dated as of July 1, 2003 (the
“Original Purchase Agreement”), the Company desires to sell, from time to
time, to the Purchaser, and the Purchaser desires to purchase from the Company,
certain Mortgage Loans on a servicing-retained basis as described herein, which
shall be delivered in pools of whole loans;
WHEREAS,
at the present time, the Purchaser and the Company desire to amend and restate
the Original Purchase Agreement, as amended and restated by that certain Amended
and Restated Master Seller’s Warranties and Servicing Agreement, dated as of
February 5, 2004, as further amended and restated by that certain Second
Amended and Restated Master Seller’s Warranties and Servicing Agreement, dated
as of May 1, 2005, and as further amended and restated by that certain
Third Amended and Restated Master Seller’s Warranties and Servicing Agreement,
dated as of June 1, 2005 to make certain modifications as set forth
herein.
WHEREAS,
the Purchaser and the Seller desire to enter into this Agreement to amend and
restate the Original Purchase Agreement to make certain modifications as set
forth herein with respect to all Mortgage Loans subject to this Agreement or
the
Original Purchase Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices: With respect to any Mortgage Loan, those
customary mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Adjustable
Rate Mortgage Loan: A Mortgage Loan purchased pursuant to this
Agreement the Mortgage Interest Rate of which is adjusted from time to time
in
accordance with the terms of the related Mortgage Note.
Adjustment
Date: With respect to any Adjustable Rate Mortgage Loan, the date
set forth in the related Mortgage Note on which the Mortgage Interest Rate
on
the Mortgage Loan is adjusted in accordance with the terms of the Mortgagee
Note.
Agreement: This
Fourth Amended and Restated Master Seller’s Warranties and Servicing Agreement
and all amendments hereof and supplements hereto.
ALTA: The
American Land Title Association or any successor thereto.
Ancillary
Income: All fees derived from the Mortgage Loans, other than
Servicing Fees and prepayment fees, including but not limited to, late charges,
fees received with respect to checks or bank drafts returned by the related
bank
for non-sufficient funds, assumption fees, optional insurance administrative
fees and all other incidental fees and charges.
Annual
Certification: The certification delivered by the Company in a
form substantially similar to that attached as Exhibit M to this
Agreement.
Appraised
Value: With respect to any Mortgage Loan, the lesser of (i) the value
set forth on the appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgage Property, or
(ii) the purchase price paid for the Mortgage Property,
provided, however, in the case of a refinanced Mortgage Loan,
such value shall be based solely on the appraisal made in connection with the
refinance of such Mortgage Loan.
Appropriate
Federal Banking Agency: Appropriate Federal Banking Agency shall
have the meaning ascribed to it by Section 1813(q) of Title 12 of the
United States Code, as amended from time to time.
Approved
Flood Policy Insurer: First American Real Estate Solutions L.P.
or such other entity as agreed to by the parties hereto which meets the
guidelines of the Federal Insurance Administration.
Assignment
of Mortgage: An individual assignment of Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws
of the jurisdiction wherein the related Mortgaged Property is located to give
record notice of the sale of the Mortgage to the Purchaser or its designated
assignee.
BIF: The
Bank Insurance Fund, or any successor thereto.
BPO:
A broker’s price opinion with respect to a Mortgaged Property.
Business
Day: Any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions in
(a) the State of Ohio or (b) the State of New York are authorized or
obligated by law or executive order to be closed.
Closing
Date: With respect to each Mortgage Loan Package, the date or dates set
forth on the related Purchase Price and Terms Letter on which the Purchaser
shall purchase, and the Company sell, the Mortgage Loans listed on the related
Mortgage Loan Schedule.
-2-
CLTV: As
of any date and as to any Second Lien Loan, the ratio, expressed as a
percentage, of (a) the sum of (i) the outstanding principal balance of the
Second Lien Loan and (ii) the outstanding principal balance as of such date
of
any mortgage loan or mortgage loans that are senior or equal in priority to
the
Second Lien Loan and which are secured by the same Mortgaged Property to (b)
the
Appraised Value as determined pursuant to the Underwriting Guidelines of the
related Mortgaged Property as of the origination of the Second Lien
Loan.
Code: The
Internal Revenue Code of 1986, as it may be amended from time to time or any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Company: National
City Mortgage Co., or its successor in interest or assigns, or any successor
to
the Company under this Agreement appointed as herein provided.
Company
Information: As defined in Section 13.07(a).
Convertible
Mortgage Loan: Any Adjustable Rate Mortgage Loan purchased
pursuant to this Agreement as to which the related Mortgage Note permits the
Mortgagor to convert the Mortgage Interest Rate on such Mortgage Loan to a
fixed
Mortgage Interest Rate.
Condemnation
Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of
the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Co-op: A
private, cooperative housing corporation, having only one class of stock
outstanding, which owns or leases land and all or part of a building or
buildings, including apartments, spaces used for commercial purposes and common
areas therein and whose board of directors authorizes the sale of stock and
the
issuance of a Co-op Lease.
Co-op
Lease: With respect to a Co-op Loan, the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated
to
the related dwelling unit.
Co-op
Loan: A Mortgage Loan secured by the pledge of stock allocated to
a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Covered
Loan: Shall have the meaning set forth in the then most recently
issued version of the Standard & Poor’s LEVELS GlossaryÒ, Appendix
E, as the
same may be amended, restated, supplemented or otherwise modified from time
to
time.
Custodial
Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custodial
Agreement: With respect to each Mortgage Loan Package, the applicable
Custodial Agreement, among the Purchaser, the Company and the
Custodian.
-3-
Custodian: With
respect to each Mortgage Loan Package, the Custodian under the applicable
Custodial Agreement, or its successor in interest or assigns or any successor
to
the Custodian under such Custodial Agreement as provided therein.
Cut-off
Date: With respect to each Mortgage Loan Package, the date set forth in the
related Purchase Price and Terms Letter.
Deleted
Mortgage Loan: A Mortgage Loan which is repurchased by the
Company in accordance with the terms of this Agreement and which is, in the
case
of a substitution pursuant to Section 3.03, replaced or to be
replaced with a Qualified Substitute Mortgage Loan.
Delinquent
Mortgage Loans: As defined in Section 11.01.
Depositor: The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date: The 15th day
(or if such
15th day is
not
a Business Day, the Business Day immediately preceding such 15th day) of
the month
of the related Remittance Date.
Due
Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace. With respect to
the Mortgage Loans for which payment from the Mortgagor is due on a day other
than the first day of the month, such Mortgage Loans will be treated as if
the
Monthly Payment is due on the first day of the month of such Due
Date.
Due
Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance
Date.
Eligible
Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than
the
Determination Date in each month:
(i) direct
obligations of, and obligations fully guaranteed by, the United States of
America, or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America; and
(ii) federal
funds, demand and time deposits in, certificates of deposits of, or bankers’
acceptances issued by, any depository institution or trust company incorporated
or organized under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual commitment
providing for such investment the commercial paper or other short-term
debt
-4-
obligations
of such depository institution or trust company (or, in the case of a depository
institution or trust company which is the principal subsidiary of a holding
company, the commercial paper or other short-term debt obligations of such
holding company) are rated “P-1” by Moody’s) and the long-term debt obligations
of such depository institution or trust company (or, in the case of a depository
institution or trust company which is the principal subsidiary of a holding
company, the long-term debt obligations of such holding company) are rated
at
least “Aa” by Moody’s;
provided,
however, that no such instrument shall be an Eligible Investment if such
instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors
and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to
Section 4.12.
Escrow
Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
Escrow
Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, and any other payments required to be escrowed by the Mortgagor with
the mortgagee pursuant to the Mortgage or any other related
document.
Event
of Default: Any one of the conditions or circumstances enumerated
in Section 10.01.
Exchange
Act: The Securities Exchange Act of 1934, as
amended.
Xxxxxx
Xxx: Xxxxxx Xxx (formerly known as the Federal National Mortgage
Association), or any successor thereto.
Xxxxxx
Mae Guides: The Xxxxxx Xxx Seller’s Guide and the Xxxxxx Mae
Servicers’ Guide and all amendments or additions thereto.
FDIC: The
Federal Deposit Insurance Corporation, or any successor thereto.
FHA:
Federal Housing Administration, and its successors.
Fidelity
Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.
First
Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgage Property.
First
Remittance Date: With respect to each Closing Date, the
Remittance Date occurring in the calendar month immediately following the month
in which such Closing Date occurs.
-5-
Fitch: Fitch,
Inc. (doing business as “Fitch Ratings”).
Xxxxxxx
Mac: Xxxxxxx Mac (formerly known as The Federal Home Loan
Mortgage Corporation), or any successor thereto.
GNMA: Government
National Mortgage Association, and any successors thereto.
Gross
Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
High
Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 (“HOEPA”), (b) with an “annual
percentage rate” or total “points and fees” payable by the related Mortgagor (as
each such term is calculated under HOEPA) that exceed the thresholds set forth
by HOEPA and its implementing regulations, including 12.CFR. § 226.32(a)(1)(i)
and (ii), (c) classified as a “high cost home,” “threshold,” “covered,”
(excluding New Jersey “Covered Home Loans” as that term was defined in clause
(1) of the definition of that term in the New Jersey Home Ownership Security
Act
of 2002 that were originated between November 26, 2003 and July 7, 2004),
“high risk home,” “predatory” or similar loan under any other applicable state,
federal or local law (or a similarly classified loan using different terminology
under a law imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest rates, points
and/or fees) or (d) a Mortgage Loan categorized as High Cost pursuant to
Appendix E of Standard & Poor’s Glossary. For avoidance of doubt,
the parties agree that this definition shall apply to any law regardless of
whether such law is presently, or in the future becomes, the subject of judicial
review or litigation.
Index: With
respect to any Adjustable Rate Mortgage Loan, the index identified on the
Mortgage Loan Schedule and set forth in the related Mortgage Note for the
purpose of calculating the Mortgage Interest Rate thereon.
Initial
Rate Cap: With respect to each Adjustable Rate Mortgage Loan and
the initial Adjustment Date therefor, a number of percentage points per annum
that is set forth in the related Mortgage Loan Schedule and in the related
Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate
for such Mortgage Loan may increase or decrease from the Mortgage Interest
Rate
in effect immediately prior to such Adjustment Date.
Insurance
Proceeds: With respect to each Mortgage Loan, proceeds of any
insurance, title policy, hazard policy or other policies insuring the Mortgage
Loan or the related Mortgaged Property.
Liquidation
Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan (net of any and all expenses reasonably incurred by
the
Servicer in connection with such liquidation), whether through the sale or
assignment of such Mortgage Loan, trustee’s sale, foreclosure sale or otherwise,
or the sale of the related Mortgaged Property if the Mortgaged Property is
acquired in satisfaction of the Mortgage Loan.
-6-
Lifetime
Rate Cap: With respect to each Adjustable Rate Mortgage Loan, a
number of percentage points per annum that is set forth in the related Mortgage
Loan Schedule and in the related Mortgage Note, which is the maximum amount
by
which the Mortgage Interest Rate for such Mortgage Loan may increase or decrease
during the term thereof from the Mortgage Interest Rate in effect on the date
of
origination of such Mortgage Loan.
Loan
in Breach: Any Mortgage Loan (a) for which the legal documentation is
missing or defective (after giving effect to any delivery extensions granted
under Section 3.05 hereof), (b) that does not conform to the
terms of the related Purchase Price and Terms Letter or (c) which does not
conform to the representations and warranties set forth in
Sections 3.01 and 3.02 hereof, to the extent applicable, and
such breach has not been cured.
Loan-to-Value
Ratio or LTV: With respect to any Mortgage Loan, the ratio of the
Stated Principal Balance of the Mortgage Loan as of the Cut-off Date (unless
otherwise indicated) to the lesser of (a) the Appraised Value of the
Mortgaged Property and (b) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property, expressed as a percentage.
LPMI
Fee: With respect to each LPMI Loan, the portion of the Mortgage Interest
Rate as set forth on the related Mortgage Loan Schedule (which shall be payable
solely from the interest portion of Monthly Payments, Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds), which shall be used to pay
the
premium due on the related LPMI Policy.
LPMI
Loan: Any Mortgage Loan with respect to which Servicer is
responsible for paying the premium due on the related LPMI Policy with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set forth
on the related Mortgage Loan Schedule.
LPMI
Policy: A policy of primary mortgage guaranty insurance issued by
a Qualified Insurer pursuant to which the related premium is to be paid by
the
Servicer of the related Mortgage Loan from payments of interest made by the
Mortgagor in an amount as is set forth in the related Purchase Price and Terms
Letter and related Mortgage Loan Schedule.
Manufactured
Home: A single family residential unit that is constructed in a
factory in sections in accordance with the Federal Manufactured Home
Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development (“HUD Code”), as amended in
2000, which preempts state and local building codes. Each unit is
identified by the presence of a HUD Plate/Compliance Certificate
label. The sections are then transported to the site and joined
together and affixed to a pre-built permanent foundation (which satisfies the
manufacturer’s requirements and all state, county, and local building codes and
regulations). The manufactured home is built on a non-removable,
permanent frame chassis that supports the complete unit of walls, floors, and
roof. The underneath part of the home may have running gear (wheels,
axles, and brakes) that enable it to be transported to the permanent
site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as
real estate and taxed accordingly. The permanent foundation may be on
land owned by the mortgager or may be on leased land.
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Maximum
Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which
the
Mortgage Interest Rate on such Adjustable Rate Mortgage Loan may be increased
on
any Adjustment Date.
MERS: Mortgage
Electronic Registration Systems, Inc., a Delaware corporation and its successors
and assigns.
MERS
Mortgage Loan: Mortgage Loans for which (a) the Company has
designated or will designate MERS as, and has taken or will take such action
as
is necessary to cause MERS to be, the mortgagee of record, as nominee for the
Company, in accordance with MERS Procedure Manual and (b) the Company has
designated or will designate the Purchaser as the Investor on the MERS
System.
MERS
Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS
System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum
Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which
the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any Adjustment
Date.
Monthly
Advance: The portion of Monthly Payment with respect to each
Mortgage Loan at the close of business on the Determination Date which is
delinquent and is required to be advanced by the Company pursuant to
Section 5.03 on the Business Day immediately preceding the
Remittance Date of the related month.
Monthly
Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Moody’s: Xxxxx’x
Investors Service, Inc.
Mortgage: With
respect to a Mortgage Loan that is not a Co-op Loan, the mortgage, deed of
trust
or other instrument securing a Mortgage Note, which creates a first lien in
the
case of a First Lien Loan, or a second lien, in the case of a Second Lien Loan,
on the related Mortgaged Property. With respect to a Co-op Loan, the
Security Agreement.
Mortgage
File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit B annexed hereto, and any additional documents
required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage
Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
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Mortgage
Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.
Mortgage
Loan: Each first lien residential loan, which is the subject of
this Agreement, originally sold and subject to this Agreement being identified
on the related Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage File, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
Proceeds and all other rights, benefits, proceeds and obligations arising from
or in connection with such Mortgage Loan.
Mortgage
Loan Documents: The documents listed in Exhibit C
hereto.
Mortgage
Loan Package: The applicable pool of Mortgage Loans sold to the Purchaser by
the Company on the relevant Closing Date.
Mortgage
Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to
the
Mortgage Interest Rate minus (i) the Servicing Fee Rate and (ii) with
respect to LPMI Loans, the LPMI Fee.
Mortgage
Loan Schedule: With respect to each Mortgage Loan Package, a schedule of
Mortgage Loans annexed to the related Assignment and Conveyance and annexed
hereto as Exhibit A, such schedule setting forth the following
information, to the extent applicable, with respect to each Mortgage Loan:
(1) the Company’s Mortgage Loan identifying number; (2) the
Mortgagor’s and Co-Mortgagor’s name; (3) the street address of the
Mortgaged Property including the city, state, county, and the zip code;
(4) the lot, block, and section numbers of the Mortgaged Property;
(5) a code indicating whether the loan was originated through a
correspondent, retail, or wholesale channel; (6) the broker identification
number; (7) a code indicating whether the Mortgaged Property is a single
family residence, a 2-4 family dwelling, a PUD, a townhouse or a unit in a
high-rise or low-rise condominium project; (8) the year in which the
Mortgaged Property was built; (9) the number of units for all
Mortgaged Properties; (10) the number of bedrooms and rents by unit;
(11) the original months to maturity or the remaining months to maturity
from the related Cut-off Date, in any case based on the original amortization
schedule, and if different, the maturity expressed in the same manner but based
on the actual amortization schedule; (12) a code indicating the lien status
of the Mortgage Loan; (13) the Loan to Value Ratio or CLTV, as applicable,
at origination; (14) the combined Loan to Value Ratio at origination, if
applicable; (15) the Appraised Value and purchase price, if applicable, of
the Mortgaged Property; (16) the Mortgage Interest Rate at the time of
origination; (17) the Mortgage Interest Rate as of the related Cut-off
Date; (18) the application date of the Mortgage Loan;
(19) the Mortgage Loan approval/commitment date; (20) the origination
date of the Mortgage Loan; (21) the first payment date of the Mortgage
Loan; (22) the stated maturity date of the Mortgage Loan; (23) the
amount of the Monthly Payment as of the related Cut-off
Date; (24) the amount of the Monthly Payment at the time of
origination; (25) whether the Mortgage Loan has Monthly Payments that are
interest-only for a period of time, and the interest-only period, if applicable
and with respect to each Second Lien Loan, whether the related first lien
mortgage loan has monthly payments that are interest-only for a period of time,
and the interest-only period, if applicable; (26) the next actual Due Date
of the Mortgage Loan; (27) [Reserved];
(28) a code indicating the payment status of the Mortgage Loan
(i.e.,
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bankruptcy,
foreclosure, REO); (29) [Reserved]; (30) the original principal amount of
the Mortgage Loan; (31) whether such Mortgage Loan provides for a
Prepayment Penalty and, if applicable, a description of the Prepayment Penalty,
including the Prepayment Penalty period for such loans and whether the
applicable Prepayment Penalty provision is “hard” or “soft”; (32) with
respect to each Mortgage Loan with a second lien behind it, the combined
principal balance of the Mortgage Loan and the applicable second lien loan,
as
of the close of business on the related Cut-off Date, after deduction of
payments of principal due and collected on or before the related Cut-off Date;
(33) the actual principal balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments of principal
actually collected on or before the related Cut-off Date; (34) the
scheduled principal balance of the Mortgage Loan as of the close of business
on
the related Cut-off Date; after deduction of payments of principal due on or
before the related Cut-off Date, whether or not collected, if applicable;
(35) a code indicating the purpose of the loan (i.e., purchase,
Rate/Term Refinance or Cash-Out Refinance), and with respect to each Second
Lien
Loan, the product type of the related first lien loan; (36) a code
indicating whether there is a simultaneous second; (37) the Mortgage Loan
product type (i.e., Fixed Rate, Adjustable Rate First Lien Loan or
Second Lien Loan); (38) the occupancy status of the Mortgaged Property at
the time of origination; (39) the Mortgagor’s and Co-Mortgagor’s FICO
score; (40) a code indicating the mortgage insurance provider (PMI or LPMI)
and percent of coverage, if applicable; (41) the mortgage insurance
certificate number; a code indicating the method of payment for mortgage
insurance premiums, if applicable; (42) the loan documentation type;
(43) the back-end debt to income ratio; (44) number
of Mortgagors; (45) Mortgagor Social Security Number;
(46) co-Mortgagor Social Security Number; (47) [Reserved];
(48) [Reserved]; (49) Mortgagor gender; (50) co-Mortgagor gender;
(51) Mortgagor race; (52) co-Mortgagor race; (53) combined
monthly income; (54) combined monthly debt expense; (55) combined
monthly housing expense; (56) a code indicating first time buyer;
(57) the DU case number (if the mortgage loan was DU underwritten);
(58) Mortgagor ethnicity; (59) co-Mortgagor ethnicity; (60) a
code indicating whether the loan is a HOEPA mortgage loan; (61) the APR
spread above the Treasury Rate, as applicable; (62) the monthly Servicing
Fee Rate; (63) the name of the tax service contract or tax monitoring
service provider; (64) the flood insurance certification contract provider;
(65) the monthly tax and insurance payment; (66) the escrow balance as
of the Cut-Off Date; (67) the MERS MIN, if applicable, and (68) with
respect to each Adjustable Rate Mortgage Loan: (A) the first Adjustment
Date and the Adjustment Date frequency; (B) the Gross Margin; (C) the
Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(D) the Minimum Mortgage Interest Rate under the terms of the Mortgage
Note; (E) the Initial Rate Cap and Periodic Rate Cap; (F) the first Adjustment
Date immediately following origination and the related Cut-off Date; (G) the
Index; (H) a code indicating the type of adjustable rate mortgage loan
(i.e., 3/1, 5/1, 7/1, etc.); (I) the Lifetime Rate Cap; and (J) a code
indicating whether the Mortgage Loan is a Convertible Mortgage
Loan. With respect to the Mortgage Loans in each Mortgage Loan
Package in the aggregate, the related Mortgage Loan Schedule shall set forth
the
following information, as of the related Cut-off Date: (1) the
number of Mortgage Loans; (2) the current aggregate outstanding principal
balance of the Mortgage Loans; (3) the weighted average Mortgage Interest
Rate of the Mortgage Loans; and (4) the weighted average maturity of the
Mortgage Loans.
Mortgage
Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
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Mortgaged
Property: The real property, improved by a residential dwelling,
securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The
obligor on a Mortgage Note.
Officer’s
Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
assistant Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Company, and delivered
to
the Purchaser as required by this Agreement.
Opinion
of Counsel: A written opinion of counsel, who may be an employee
of the Company, reasonably acceptable to the Purchaser.
Periodic
Rate Cap: With respect to each Adjustable Rate Mortgage Loan and
any Adjustment Date therefor, the number of percentage points set forth in
the
related Mortgage Loan Schedule and in the related Mortgage Note, which is the
maximum amount by which the Mortgage Interest Rate for such Mortgage Loan may
increase (without regard to the Maximum Mortgage Interest Rate) or decrease
(without regard to the Minimum Mortgage Interest Rate) on such Adjustment Date
from the Mortgage Interest Rate in effect immediately prior to such Adjustment
Date, which may be a different amount with respect to the first Adjustment
Date.
Person: Any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof.
PMI: PMI
Mortgage Insurance Co., or any successor thereto.
PMI
Policy: A policy of primary mortgage guaranty insurance issued by
a Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans (or any replacement policy obtained by the Servicer pursuant
to
Section 4.15).
Prepayment
Interest Shortfall Amount: With respect to any Mortgage Loan that
was subject to a Principal Prepayment in full or in part during any Due Period,
which Principal Prepayment was applied to such Mortgage Loan prior to such
Mortgage Loan’s Due Date in such Due Period, the amount of interest (net the
related Servicing Fee) that would have accrued on the amount of such Principal
Prepayment during the period commencing on the date as of which such Principal
Prepayment was applied to such Mortgage Loan and ending on the day immediately
preceding such Due Date, inclusive.
Prime
Rate: The prime rate announced to be in effect from time to time,
as published as the average rate in the “Money Rates” section of The Wall
Street Journal.
Principal
Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates
in
any month or months subsequent to the month of prepayment.
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Principal
Prepayment Period: The month preceding the month in which the
related Remittance Date occurs.
Purchase
Price: The price paid on the related Closing Date, by the
Purchaser to the Company pursuant to the related Purchase Price and Terms Letter
in exchange for the Mortgage Loans purchased on such Closing Date as provided
in
Section 2.05.
Purchase
Price and Terms Letter: With respect to any Mortgage Loan Package purchased
and sold on any Closing Date, each of those certain letter agreements by and
between the Purchaser and the Company (including any exhibits, schedules and
attachments thereto) setting forth the terms and conditions of such transaction
and describing the Mortgage Loans to be purchased from time to time by the
Purchaser on such Closing Date. A Purchase Price and Terms Letter may
relate to more than one Mortgage Loan Package to be purchased on one or more
Closing Dates hereunder.
Purchase
Price Percentage: The percentage of par set forth in the related
Purchase Price and Terms Letter.
Purchaser: Xxxxxx
Xxxxxxx Mortgage Capital Inc. or its successor in interest or any successor
to the Purchaser under this Agreement as herein provided.
Qualified
Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such Mortgage Loans were originated pursuant to an
agreement between the Company and such Person that contemplated that such Person
would underwrite mortgage loans from time to time, for sale to the Company,
in
accordance with underwriting guidelines designated by the Company
(“Designated Guidelines”) or guidelines that do not vary materially from
such Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten
as described in clause (i) above and were acquired by the Company within 180
days after origination; (iii) either (x) the Designated Guidelines were, at
the
time such Mortgage Loans were originated, used by the Company in origination
of
mortgage loans of the same type as the Mortgage Loans for the Company’s own
account or (y) the Designated Guidelines were, at the time such Mortgage Loans
were underwritten, designated by the Company on a consistent basis for use
by
lenders in originating mortgage loans to be purchased by the Company; and (iv)
the Company employed, at the time such Mortgage Loans were acquired by the
Company, pre-purchase or post-purchase quality assurance procedures (which
may
involve, among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels) designed to
ensure that Persons from which it purchased mortgage loans properly applied
the
underwriting criteria designated by the Company. For the avoidance of
doubt, a “Qualified Correspondent” includes a “table broker” or mortgage lender
that originates loans underwritten and funded by the Company or an affiliate
of
the Company and which otherwise satisfies the requirements set forth
above.
Qualified
Depository: A depository the accounts of which are insured by the
FDIC through the BIF or the SAIF and the debt obligations of which are rated
AA
or better by S&P and “Aa2” or better by Xxxxx’x.
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Qualified
Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Qualified
Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in
the
case of a substitution of more than one mortgage loan for a Deleted Mortgage
Loan, an aggregate principal balance), not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Loan Remittance
Rate not less than and not more than 2% greater than the Mortgage Loan
Remittance Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; and (iv) comply with each representation and
warranty set forth in Sections 3.01 and 3.02.
Rating
Agency: Any of Fitch, Xxxxx’x or S&P or their respective
successors designated by the Purchaser or any other nationally recognized
statistical credit rating agency rating any security issued in connection with
any Securitization Transaction.
Reconstitution: Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreements: The agreement or agreements entered into by the
Purchaser, the Company, Xxxxxx Mae or Xxxxxxx Mac or certain third parties
on
the Reconstitution Date(s) with respect to any or all of the Mortgage Loans,
in
connection with a Securitization Transaction or Whole-Loan Transfer as set
forth
in Section 7.01, including, but not limited to, (i) a Xxxxxx
Mae Mortgage Selling and Servicing Contract, a Pool Purchase Contract, and
any
and all servicing agreements and tri-party agreements reasonably required by
Xxxxxx Xxx with respect to a Xxxxxx Mae Transfer, (ii) a Purchase Contract
and all purchase documents associated therewith as set forth in the Xxxxxxx
Xxx
Xxxxxxx’ and Servicers’ Guide, and any and all servicing agreements and
tri-party agreements reasonably required by Xxxxxxx Mac with respect to a
Xxxxxxx Mac Transfer, and (iii) a Pooling and Servicing Agreement and/or a
subservicing/master servicing agreement and related custodial/trust agreement,
assignment and conveyance and related documents with respect to a Securitization
Transaction.
Reconstitution
Date: The date or dates on which any or all of the Mortgage Loans
serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of a Whole Loan Transfer or a Securitization Transaction
pursuant to Section 7.01 hereof.
Record
Date: The close of business of the last Business Day of the month
preceding the month of the related Remittance Date.
Regulation
AB: Subpart 229.1100 – Asset Backed Securities (Regulation AB),
17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
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Remittance
Date: The 18th day
(or if such
18th day is
not
a Business Day, the first Business Day immediately preceding such day) of any
month, beginning with the First Remittance Date.
REO
Disposition: The final sale by the Company of any REO
Property.
REO
Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO
Property: A Mortgaged Property acquired by the Company on behalf
of the Purchasers through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase
Price: With respect to any Mortgage Loan, a price equal
to (a) during the first year immediately following the related
Closing Date, an amount equal to the sum of (i) the product of (x) the
applicable Purchase Price Percentage and (y) the then outstanding principal
balance of such Loan in Breach as of the date of such repurchase, plus
(ii) accrued interest on such Loan in Breach at the applicable Mortgage
Interest Rate from the date to which interest had last been paid through the
date of such repurchase (if the Company is acting as servicer with respect
to
the applicable Mortgage Loan, net of the Servicing Fee Rate), plus
(iii) the amount of any outstanding advances owed to the Servicer, plus
(iv) all costs and expenses incurred by the Purchaser or any servicer
(other than the Company) arising out of or upon such breach, including without
limitation, costs and expenses incurred in the enforcement of the Company’s
repurchase obligation hereunder and (b) after the first year, an amount
equal to the sum of (i) then outstanding principal balance of such Loan in
Breach as of the date of such repurchase plus (ii) accrued interest thereon
at the Mortgage Interest Rate from the date to which interest had last been
paid
through the date of such repurchase (if the Company is acting as servicer with
respect to the applicable Mortgage Loan, net of the Servicing Fee Rate), plus
(iii) the amount of any outstanding advances owed to the Servicer plus
(iv) all costs and expenses incurred by the Purchaser or any servicer
(other than the Company) arising out of or based upon such breach, including
without limitation, costs and expenses incurred in the enforcement of the
Company’s repurchase obligation hereunder and any costs and damages, including
reasonable attorneys’ fees and costs, incurred by the trust in the applicable
Securitization Transaction, if any, in connection with any violation by the
Mortgage Loan of any predatory or abusive lending law. In the event
the Purchaser has included the Mortgage Loans in a Reconstitution, the price
for
such repurchase shall be as set forth in
clause (b) above.
S&P: Standard &
Poor’s, a division of The XxXxxx-Xxxx Companies, Inc.
SAIF: The
Savings Association Insurance Fund, or any successor thereto.
Second
Lien Loan: A Mortgage Loan secured by a second lien Mortgage on
the related Mortgaged Property.
Securities
Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Securitization
Transaction: Any transaction involving either (1) a sale or other
transfer of Mortgage Loans directly or indirectly to an issuing entity in
connection with an issuance of publicly offered or privately placed, rated
or
unrated mortgage-backed securities, or
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(2)
an
issuance of publicly offered or privately placed, rated or unrated securities,
the payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of
Mortgage Loans, in either case, such Mortgage Loans having an aggregate unpaid
principal balance at least equal to the lesser of (x) the unpaid principal
balance of the Mortgage Loans subject to this Agreement but which have not
been
subject to a Reconstitution and (y) $2,000,000, unless otherwise agreed to
by
the Company and the Purchaser.
Servicing
Advances: All customary, reasonable and necessary “out of pocket”
costs and expenses other than Monthly Advances (including reasonable attorneys’
fees and disbursements) incurred in the performance by the Company of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 4.08.
Servicing
Criteria: The “servicing criteria” set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing
Fee: With respect to each Mortgage Loan, the amount of the annual
fee the Purchaser shall pay to the Company, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the scheduled principal balance of such Mortgage
Loan. The obligation of the Purchaser to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the
extent permitted by Section 4.05), of such Monthly Payment collected
by the Company, or as otherwise provided under
Section 4.05.
Servicing
Fee Rate: The per annum rate set forth in the Purchase Price and Terms
Letter.
Servicing
File: With respect to each Mortgage Loan, the file retained by
the Company consisting of originals of all documents in the Mortgage File which
are not delivered to the Custodian and copies of the Mortgage Loan Documents
listed in Exhibit C the originals of which are delivered to the
Custodian pursuant to Section 2.01.
Servicing
Guide: The Xxxxxx Xxx Servicing Guide or the Xxxxxxx Mac
Servicing Guide, as in existence on the date of the related sale or transfer
of
Mortgage Loans to Xxxxxx Xxx or Xxxxxxx Mac, as applicable, as each may be
amended or supplemented in writing from time to time.
Servicing
Officer: Any officer of the Company involved in or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by the Company to the Purchaser upon
request, as such list may from time to time be amended.
Servicing
Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received
by
the Company for servicing the Mortgage Loans; (c) any late fees, penalties
or
similar payments with respect to the Mortgage
-15-
Loans;
(d) all agreements or documents creating, defining or evidencing any such
servicing rights to the extent they relate to such servicing rights and all
rights of the Company thereunder; (e) Escrow Payments or other similar payments
with respect to the Mortgage Loans and any amounts actually collected by the
Company with respect thereto; (f) all accounts and other rights to payment
related to any of the property described in this paragraph; and (g) any and
all
documents, files, records, servicing files, servicing documents, servicing
records, data tapes, computer records, or other information pertaining to the
Mortgage Loans or pertaining to the past, present or prospective servicing
of
the Mortgage Loans.
Stated
Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the related Cut-off Date after giving
effect to payments of principal due on or before such date, whether or not
received, minus (ii) all amounts previously distributed to the Purchaser
with respect to the related Mortgage Loan representing payments or recoveries
of
principal or advances in lieu thereof.
Static
Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Servicer or a
Subservicer.
Subservicer: Any
Person that services Mortgage Loans on behalf of the Servicer or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
Subservicing
Agreement: An agreement between the Company and a Subservicer for
the servicing of the Mortgage Loans.
Third-Party
Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Company, and shall not include
a
mortgage broker that does not fund mortgage loans.
Transfer
Date: In the event the Company is terminated as servicer of a
Mortgage Loan pursuant to Article 10 or Article 11, the
date on which the Purchaser, or its designee, shall receive the transfer of
servicing responsibilities and begin to perform the servicing of such Mortgage
Loans and the Company shall cease all servicing responsibilities.
Underwriting
Guidelines: The applicable underwriting guidelines of the Company
with respect to Mortgage Loans, attached as an Exhibit to the Assignment
and Conveyance.
VA: The
United States Department of Veterans Administration, and its
successors.
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Weighted
Average Net Coupon: The weighted average interest rate of the Mortgage
Loans, net of the Servicing Fee Rate.
Whole
Loan Transfer: Any sale or transfer of Mortgage Loans having an
aggregate unpaid principal balance at least equal to the lesser of (x) the
unpaid principal balance of the Mortgage Loans subject to this Agreement but
which have not been subject to a Reconstitution and (y) $2,000,000, unless
otherwise agreed to by the Company and the Purchaser; other than a
Securitization Transaction.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS
AND RECORDS; DELIVERY OF DOCUMENTS
Section
2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
The
Company agrees to sell and Purchaser agrees to purchase, from time to time,
those certain Mortgage Loans identified on the Mortgage Loan Schedule attached
hereto as Exhibit A. The Company, simultaneously with the
payment of the Purchase Price shall execute and deliver to the Purchaser an
Assignment and Conveyance with respect to the related Mortgage Loan Package(s)
to be acquired hereunder, in the form attached hereto as
Exhibit L. Pursuant to Section 2.03, the
Company, on or prior to the date set forth in the related Purchase Price and
Terms Letter, shall have delivered the Mortgage Loan Documents for each Mortgage
Loan in the Mortgage Loan Package to the Custodian. The Purchaser, on
any Closing Date, shall be obligated to purchase only the Mortgage Loans set
forth in the related Mortgage Loan Schedule, subject to the terms and conditions
of this Agreement and the related Purchase Price and Terms Letter.
The
contents of each Mortgage File not delivered to the Custodian are and shall
be
held in trust by the Company for the benefit of the Purchaser as the owner
thereof. The Company shall maintain a Servicing File consisting of a
copy of the contents of each Mortgage File and the originals of the documents
in
each Mortgage File not delivered to the Custodian. The possession of
each Servicing File by the Company is at the will of the Purchaser for the
sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Company is in a custodial capacity only. Upon the
sale of the Mortgage Loans the ownership of each Mortgage Note, the related
Mortgage and the related Mortgage File and Servicing File shall vest immediately
in the Purchaser, and the ownership of all records and documents with respect
to
the related Mortgage Loan prepared by or which come into the possession of
the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only
in
such custodial capacity. Each Servicing File shall be segregated from
the other books and records of the Company and shall be marked appropriately
to
reflect clearly the sale of the related Mortgage Loan to the
Purchaser. The Company shall release its custody of the contents of
any Servicing File only in accordance with written instructions from the
Purchaser, unless such release is required as incidental to the Company’s
servicing of the Mortgage Loans or is in connection with a repurchase of any
Mortgage Loan pursuant to Section 3.03 or 6.02.
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Section
2.02 Purchase Price.
On
the
related Closing Date, Purchaser shall pay to Company the Purchase Price for
the
Mortgage Loans calculated in the manner described in the applicable Purchase
Price and Terms Letter for the related Mortgage Loan Package. The
Purchase Price shall be adjusted, to the extent required, in accordance with
the
related Purchase Price and Terms Letter.
The
payment by Purchaser shall be made by wire transfer before 4:00 pm, Eastern
Time, in immediately available funds to an account designated by
Company. If any miscalculation is reflected in the purchase price for
the Mortgage Loans, the party benefiting from such error shall pay an amount
sufficient to correct the error. The Purchaser shall own and be
entitled to receive with respect to each Mortgage Loan purchased, (1) all
scheduled principal due after the Cut-off Date, (2) all other recoveries of
principal collected after the Cut-off Date (provided, however,
that all scheduled payments of principal due on or before the Cut-off Date
and
collected by the Company after the Cut-off Date shall belong to the Company),
and (3) all payments of interest on the Mortgage Loans minus that portion
of any such interest payment that is allocable to the period prior to the
Cut-off Date. The Stated Principal Balance of each Mortgage Loan as
of the Cut-off Date is determined after application to the reduction of
principal of payments of principal due on or before the Cut-off Date whether
or
not collected. Therefore, for the purposes of this Agreement,
payments of scheduled principal and interest prepaid for a Due Date beyond
the
Cut-off Date shall not be applied to the principal balance as of the Cut-off
Date. Such prepaid amounts shall be the property of the
Purchaser. All payments of principal and interest due on a Due Date
following the Cut-off Date shall belong to the Purchaser.
Section
2.03 Books and Records; Transfers of Mortgage
Loans.
From
and
after each sale of the Mortgage Loans to the Purchaser all rights arising out
of
the Mortgage Loans in a Mortgage Loan Package including but not limited to
all
funds received on or in connection with the Mortgage Loans, shall be received
and held by the Company in trust for the benefit of the Purchaser as owner
of
such Mortgage Loans, and the Company shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans.
The
sale
of each Mortgage Loan in a Mortgage Loan Package shall be reflected on the
Company’s balance sheet and other financial statements as a sale of assets by
the Company. The Company shall be responsible for maintaining, and
shall maintain, a complete set of books and records for each Mortgage Loan
which
shall be marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Company shall maintain in its
possession, available for inspection by the Purchaser, or its designee and
shall
deliver to the Purchaser upon demand, evidence of compliance with all federal,
state and local laws, rules and regulations, and requirements of Xxxxxx Mae
or
Xxxxxxx Mac, as applicable, including but not limited to documentation as to
the
method used in determining the applicability of the provisions of the Flood
Disaster Protection Act of 1973, as amended, to the Mortgaged Property,
documentation evidencing insurance coverage and eligibility of any condominium
project for approval by Xxxxxx Mae and periodic inspection reports as required
by Section 4.13. To the extent that original documents
are not required for purposes of realization of Liquidation
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Proceeds
or Insurance Proceeds, documents maintained by the Company may be in the form
of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long
as
the Company complies with the requirements of the Xxxxxx Xxx Selling and
Servicing Guide, as amended from time to time.
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Purchaser or its designee the related Servicing
File during the time the Purchaser retains ownership of a Mortgage Loan and
thereafter in accordance with applicable laws and regulations.
The
Company shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Company shall note
transfers of Mortgage Loans. For the purposes of this Agreement, the
Company shall be under no obligation to deal with any person with respect to
this Agreement or the Mortgage Loans unless the books and records show such
person as the owner of the Mortgage Loan. The Purchaser may sell and
transfer five or more of the Mortgage Loans, provided,
however, with respect to each Mortgage Loan Package (excluding any
delinquent Mortgage Loans), in no event shall there be more than six Persons,
unless otherwise set forth in the Purchase Price and Terms Letter or the related
Assignment and Conveyance, at any given time having the status of “Purchaser”
hereunder. The Purchaser also shall advise the Company of the
transfer. Upon receipt of notice of the transfer, the Company shall
xxxx its books and records to reflect the ownership of the Mortgage Loans of
such assignee, and shall release the previous Purchaser from its obligations
hereunder with respect to the Mortgage Loans sold or transferred.
Section
2.04 Delivery of Documents
On
or
before the date set forth in the related Purchase Price and Terms Letter, the
Company shall deliver and release to the Custodian those Mortgage Loan Documents
as required by this Agreement with respect to each Mortgage Loan in the related
Mortgage Loan Package a list of which is attached to the related Assignment
and
Conveyance.
On
or
prior to the related Closing Date, the Custodian shall certify its receipt
of
all such Mortgage Loan Documents required to be delivered pursuant to the
relevant Custodial Agreement, as evidenced by the initial trust receipt of
the
Custodian in the form annexed to the Custodial Agreement (other than those
Mortgage Loan Documents Listed on a document exception report attached
thereto). Purchaser shall pay all fees and expenses of the
Custodian.
The
Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within
one week of their execution, provided, however, that the
Company shall provide the Custodian with a certified true copy of any such
document submitted for recordation within one week of its execution, and shall
provide the original of any document submitted for recordation or a copy of
such
document certified by the appropriate public recording office to be a true
and
complete copy of the original within sixty days of its submission for
recordation.
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Section
2.05 Closing Documents.
(a) On
or before the Closing Date for the initial purchase of Mortgage Loans hereunder,
the Company shall submit to the Purchaser fully executed originals of the
following documents:
(i) this
Agreement, in four counterparts;
(ii) an
Officer’s Certificate, in substantially the form of Exhibit I
hereto, including all attachments thereto; and
(iii) an
Opinion of Counsel to the Company, in substantially the form of
Exhibit J hereto;
(b) The
closing documents for each Mortgage Loan Package to be purchased on each Closing
Date shall consist of fully executed originals of the following
documents:
(i) the
related Purchase Price and Terms Letter;
(ii) the
related Custodial Agreement;
(iii) the
related Mortgage Loan Schedule, one
copy to be attached to each counterpart of this Agreement, and to each
counterpart of the related Custodial Agreement, as the Mortgage Loan Schedule
thereto;
(iv) if
any of the Mortgage Loans has at any time been subject to any security interest,
pledge or hypothecation for the benefit of any Person, a Security Release
Certification, in the form of Exhibit K hereto, executed by such
Person;
(v) a
certificate or other evidence of merger or change of name, signed or stamped
by
the applicable regulatory authority, if any of the Mortgage Loans were acquired
by the Company by merger oracquired or originated by the Company while
conducting business under a name other than its present name, if applicable;
and
(vi) an
Assignment and Conveyance, in the form of Exhibit L hereto.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES;
REMEDIES
AND BREACH
Section
3.01 Company Representations and
Warranties.
The
Company represents and warrants to the Purchaser that as of the related Closing
Date or as of such date specifically provided herein:
(a) Due
Organization and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of
Ohio and has all
-20-
licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in each state where a Mortgaged Property is
located if the laws of such state require licensing or qualification in order
to
conduct business of the type conducted by the Company, and in any event the
Company is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing
of
such Mortgage Loan in accordance with the terms of this Agreement; the Company
has the full corporate power and authority to hold each Mortgage Loan, to sell
each Mortgage Loan and to execute and deliver this Agreement and to perform
in
accordance herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Company and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement evidences the
valid, binding and enforceable obligation of the Company; and all requisite
corporate action has been taken by the Company to make this Agreement valid
and
binding upon the Company in accordance with its terms;
(b) Ordinary
Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Company, and the transfer, assignment and conveyance of the Mortgage Notes
and
the Mortgages by the Company pursuant to this Agreement are not subject to
the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(c) No
Conflicts. Neither the execution and delivery of this Agreement,
the acquisition of the Mortgage Loans by the Company, the sale of the Mortgage
Loans to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of the Company’s charter or by-laws or any legal restriction or any
agreement or instrument to which the Company is now a party or by which it
is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its property is subject, or impair
the ability of the Purchaser to realize on the Mortgage Loans, or impair the
value of the Mortgage Loans;
(d) Ability
to Service. The Company is an approved seller/servicer of
conventional residential mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, with
the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage
Loans. The Company is in good standing to sell mortgage loans to and
service mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, and no event has occurred,
including but not limited to a change in insurance coverage, which would make
the Company unable to comply with Xxxxxx Mae or Xxxxxxx Mac eligibility
requirements or which would require notification to either Xxxxxx Mae or Xxxxxxx
Mac;
(e) Reasonable
Servicing Fee. The Company acknowledges and agrees that the
Servicing Fee, as calculated at the Servicing Fee Rate, represents reasonable
compensation for performing such services and that the entire Servicing Fee
shall be treated by the Company, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans pursuant
to this Agreement.
-21-
(f) Ability
to Perform. The Company does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement. The Company is solvent and will not be
rendered insolvent by the consummation of the transactions contemplated
hereby. The sale of the Mortgage Loans is not undertaken to hinder,
delay or defraud any of the Company’s creditors;
(g) No
Litigation Pending. There is no action, suit, proceeding or
investigation pending or to the best of the Company’s knowledge threatened
against the Company which, either in any one instance or in the aggregate,
may
result in any material adverse change in the business, operations, financial
condition, properties or assets of the Company, or in any material impairment
of
the right or ability of the Company to carry on its business substantially
as
now conducted, or in any material liability on the part of the Company, or
which
would draw into question the validity of this Agreement or the Mortgage Loans
or
of any action taken or to be taken in connection with the obligations of the
Company contemplated herein, or which would be likely to impair materially
the
ability of the Company to perform under the terms of this
Agreement;
(h) No
Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Company of or compliance by the Company with this
Agreement or the sale of the Mortgage Loans as evidenced by the consummation
of
the transactions contemplated by this Agreement, or if required, such approval
has been obtained prior to the related Closing Date;
(i) Selection
Process. The Mortgage Loans were selected from among the
outstanding fixed or adjustable rate one- to four-family mortgage loans in
the
Company’s portfolio at the related Closing Date as to which the representations
and warranties set forth in Section 3.02 could be made and such
selection was not made in a manner so as to affect adversely the interests
of
the Purchaser;
(j) Pool
Characteristics. With respect to each Mortgage Loan Package, the
Mortgage Loan characteristics set forth on the related Mortgage Loan Schedule
attached to the related Assignment and Conveyance are true and
complete;
(k) No
Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or any Reconstitution Agreement or in connection with the transactions
contemplated hereby including any Securitization Transaction or Whole Loan
Transfer contains any untrue statement of fact or omits to state a fact
necessary to make the statements contained therein not misleading;
(l) Sale
Treatment. The disposition of the Mortgage Loans shall be treated
as a sale on the books and records of the Company. The Company has
determined that the disposition of the Mortgage Loans pursuant to this Agreement
will be afforded sale treatment for accounting and tax purposes. The
Company shall maintain a complete set of books and records for each Mortgage
Loan, which shall be clearly marked to reflect the ownership of such Mortgage
Loan;
-22-
(m) Financial
Statements. The Company has delivered to the Purchaser financial
statements as to its last three complete fiscal years and any later quarter
ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent
results of operations and changes in financial position at the end of each
such
period of the Company and its subsidiaries and have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as set forth in the notes thereto. There
has been no change in the business, operations, financial condition, properties
or assets of the Company since the date of the Company’s financial statements
that would have a material adverse effect on its ability to perform its
obligations under this Agreement. The Company has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(n) No
Brokers’ Fees. The Company has not dealt with any broker,
investment banker, agent or other person that may be entitled to any commission
or compensation in connection with the sale of the Mortgage Loans;
(o) Origination. The
Company’s decision to originate any mortgage loan or to deny any mortgage loan
application is an independent decision based upon Company’s Underwriting
Guidelines, and is in no way made as a result of Purchaser’s decision
to purchase, or not to purchase, or the price Purchaser may offer to pay for,
any such mortgage loan, if originated;
(p) Fair
Consideration. The consideration received by the Company upon the
sale of the Mortgage Loans under this Agreement constitutes fair consideration
and reasonably equivalent value for the Mortgage Loans;
(q) No
Bulk Transfer. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Company pursuant to this Agreement
are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(r) Ability
to Perform; Solvency. The Company does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Company is solvent and the
sale of the Mortgage Loans will not cause the Company to become
insolvent. The sale of the Mortgage Loans is not undertaken with the
intent to hinder, delay or defraud any of Company’s creditors;
(s) Anti-Money
Laundering Laws. The Company has complied with all applicable
anti-money laundering laws, executive orders and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the “Anti-Money
Laundering Laws”); the Company has established an anti-money laundering
compliance program as required by the Anti-Money Laundering Laws, has conducted
the requisite due diligence in connection with the origination of each Mortgage
Loan for purposes of the Anti-Money Laundering Laws, including with respect
to
the legitimacy of the applicable Mortgagor and the origin of the assets used
by
the said Mortgagor to purchase the property in question, and maintains, and
will
maintain, sufficient information to identify the applicable Mortgagor for
purposes of the Anti-Money Laundering Laws; and
-23-
(t) Officer’s
Certificate The Officer’s Certificate provided by the Company
with respect to the initial Closing Date will remain true and correct with
respect to any subsequent Closing Date.
Section
3.02 Representations and Warranties Regarding Individual
Mortgage Loans.
As
to
each Mortgage Loan, the Company hereby represents and warrants to the Purchaser
that as of the related Closing Date:
(a) Mortgage
Loans as Described. The information set forth in the related
Mortgage Loan Schedule is complete, true and correct;
(b) Payments
Current. All payments required to be made up to the related
Closing Date for each Mortgage Loan under the terms of the Mortgage Note have
been made and credited. No payment required under the Mortgage Loan
has been 30 or more days delinquent at any time in the 12 months
preceding the related Closing Date. The first Monthly Payment shall
be made with respect to the Mortgage Loan on its Due Date, all in accordance
with the terms of the related Mortgage Note. The first two Monthly
Payments after the relevant Cut-off Date shall be made with respect to the
Mortgage Loan within thirty (30) days of the related Due Date, all in
accordance with the terms of the related Mortgage Note;
(c) No
Outstanding Charges. There are no defaults in complying with the
terms of the Mortgages, and all taxes, governmental assessments, insurance
premiums, ground rents, leasehold payments, water, sewer and municipal charges,
leasehold payments or ground rents which previously became due and owing have
been paid, or an escrow of funds has been established in an amount sufficient
to
pay for every such item which remains unpaid and which has been assessed but
is
not yet due and payable. The Company has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date
of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is greater, to the day which precedes by one month the Due Date of
the
first installment of principal and interest;
(d) Original
Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified in any respect, except
by a
written instrument which has been recorded, if necessary to protect the
interests of the Purchaser and which has been delivered to the
Custodian. The substance of any such waiver, alteration or
modification has been approved by FHA or VA, as applicable, or the issuer of
any
related PMI Policy and the title insurer, to the extent required by the policy,
and its terms are reflected on the related Mortgage Loan Schedule. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, except in connection with
an
assumption agreement approved by the issuer of any related PMI Policy and the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian and
the
terms of which are reflected in the related Mortgage Loan Schedule;
-24-
(e) No
Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject
to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at
the
time the Mortgage Loan was originated;
(f) Hazard
Insurance. All buildings or other improvements upon the Mortgaged
Property are insured by a generally acceptable insurer against loss by fire,
hazards of extended coverage and such other hazards as are customary in the
area
where the Mortgaged Property is located pursuant to insurance policies
conforming to the requirements of Section 4.10. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Flood Insurance
Administration is in effect which policy conforms to the requirements of
Section 4.10. All individual insurance policies contain a
standard mortgagee clause naming the Company and its successors and assigns
as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy
at
the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance
at
such Mortgagor’s cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor
has been given an opportunity to choose the carrier of the required hazard
insurance, provided the policy is not a “master” or “blanket” hazard insurance
policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in full
force and effect and inure to the benefit of the Purchaser upon the consummation
of the transactions contemplated by this Agreement. The Company has
not engaged in, and has no knowledge of the Mortgagor, any Subservicer or any
prior originator or subservicer having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either, including
without limitation, no unlawful fee, unlawful commission, unlawful kickback
or
other unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the
Company;
(g) Compliance
with Applicable Laws. Any and all requirements of any federal,
state or local law including, without limitation, usury, truth-in-lending,
real
estate settlement procedures, consumer credit protection, equal credit
opportunity, predatory, abusive and fair lending and disclosure laws applicable
to the origination and servicing of the Mortgage Loan, including, without
limitation, any provisions relating to prepayment penalties, have been complied
with, and the Company shall maintain in its possession, available for the
Purchaser’s inspection, and shall deliver to the Purchaser upon demand, evidence
of compliance with all such requirements;
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(h) No
Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Company has not waived
the performance by the Mortgagor of any action, if the Mortgagor’s failure to
perform such action would cause the Mortgage Loan to be in default, nor has
the
Company waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location
and Type of Mortgaged Property. The Mortgaged Property is a fee
simple or leasehold property located in the state identified in the related
Mortgage Loan Schedule and consists of a parcel of real property with a detached
single family residence erected thereon, or a two- to four-family dwelling,
or
an individual condominium unit in a low-rise condominium project, or an
individual unit in a planned unit development, provided,
however, that any condominium project or planned unit development shall
conform with the Company’s Underwriting Guidelines regarding such dwellings, and
no residence or dwelling is a mobile home or a manufactured
dwelling. No portion of the Mortgaged Property is used for commercial
purposes. None of the Mortgaged Properties are Manufactured Homes,
log homes, mobile homes, geodesic domes or other unique property
types;
(j) Valid
First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan)on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(1) with
respect to a Second Lien Loan only, the lien on the first mortgage on the
Mortgaged Property;
(2) the
lien of current real property taxes and assessments not yet due and
payable;
(3) covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to mortgage lending
institutions generally and specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan and
(i) referred to or to otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (ii) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such appraisal;
and
(4) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property.
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable
-26-
first
lien (with respect to a First Lien Loan) or second lien (with respect to a
Second Lien Loan) and first priority (with respect to a First Lien Loan) or
second priority (with respect to a Second Lien Loan) security interest on the
property described therein and the Company has full right to sell and assign
the
same to the Purchaser. The Mortgaged Property was not, as of the date
of origination of the Mortgage Loan, subject to a mortgage, deed of trust,
deed
to secured debt or other security instrument creating a lien subordinate to
the
lien of the Mortgage;
With
respect to any Co-op Loan, the related Mortgage is a valid, subsisting and
enforceable first priority security interest on the related cooperative shares
securing the Mortgage Note, subject only to (a) liens of the related
residential cooperative housing corporation for unpaid assessments representing
the Mortgagor’s pro rata share of the related residential cooperative housing
corporation’s payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments
to
which like collateral is commonly subject and (b) other matters to which
like collateral is commonly subject which do not materially interfere with
the
benefits of the security interest intended to be provided by the related
Security Agreement;
(k) Validity
of Mortgage Documents. The Mortgage Note and the Mortgage are
genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms (including, without limitation,
any provisions relating to prepayment penalties). All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note
and
the Mortgage have been duly and properly executed by such
parties. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material
fact
or omit to state a material fact required to be stated therein or necessary
to
make the information and statements therein not misleading. No fraud
was committed in connection with the origination of the Mortgage
Loan. The Company has reviewed all of the documents constituting the
Servicing File and has made such inquiries as it deems necessary to make and
confirm the accuracy of the representations set forth herein;
(l) Full
Disbursement of Proceeds. The Mortgage Loan has been closed and
the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as
to
completion of any on-site or off-site improvement and as to disbursements of
any
escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording
of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of
any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The
Company is the sole owner of record and holder of the Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and the Company
has good and marketable title thereto, and has full right to transfer and sell
the Mortgage Loan therein to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;
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(n) Doing
Business. All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the
period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of
the
state wherein the Mortgaged Property is located and any qualification
requirements of FHA, Xxxxxxx Mac, Xxxxxx Xxx, GNMA or VA, as applicable, and
(2) (a) organized under the laws of such state, (b) qualified to
do business in such state, (c) federal savings and loan associations or
national banks having principal offices in such state, or (d) not doing
business in such state;
(o) CLTV,
LTV, PMI Policy. No Mortgage Loan that is a Second Lien Loan has
a CLTV greater than 100%. No Mortgage Loan has a LTV equal to or
greater than 95%. The original LTV of the Mortgage Loan either was
not more than 80% or (i) the excess over 75% is and will be insured as to
payment defaults by a PMI Policy until the LTV of such Mortgage Loan is reduced
to 80%, or (ii) is subject to an LPMI Policy, which will stay in effect for
the life of the Mortgage Loan. All provisions of such PMI Policy have
been and are being complied with, such policy is in full force and effect,
and
all premiums due thereunder have been paid. No action, inaction, or
event has occurred and no state of facts exists that has, or will result in
the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan
subject to a PMI Policy obligates the Mortgagor thereunder to maintain the
PMI
Policy and to pay all premiums and charges in connection therewith; provided,
that, with respect to LPMI Loans, the related Servicer is obligated thereunder
to maintain the LPMI Policy and to pay all premiums and charges in connection
therewith.. The Mortgage Interest Rate for the Mortgage Loan as set
forth on the related Mortgage Loan Schedule is net of any such insurance premium
if the related PMI Policy is lender-paid;
(p) Title Insurance. The
Mortgage Loan is covered by either (i) an attorney’s opinion of title and
abstract of title the form and substance of which is acceptable to mortgage
lending institutions making mortgage loans in the area where the Mortgaged
Property is located or (ii) an ALTA lender’s title insurance policy or
other generally acceptable form of policy of insurance acceptable to Xxxxxx
Xxx,
Xxxxxxx Mac, GNMA, FHA, VA, as applicable, issued by a title insurer acceptable
to Xxxxxx Mae, Xxxxxxx Mac, GNMA, FHA, VA as applicable, and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
the Company, its successors and assigns, (a) as to the first (with respect
to a First Lien Loan) or second (with respect to a Second Lien Loan) priority
lien of the Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exceptions contained in clauses (1), (2) and (3) of
paragraph (j) of this Section 3.02, and (b) against any
loss by reason of the invalidity or unenforceability of the lien resulting
from
the provisions of the Mortgage providing for adjustments to the Mortgage
Interest Rate and Monthly Payment. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender’s
title insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest
therein. The Company is the sole insured of such lender’s title
insurance policy, and such lender’s title insurance policy is in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender’s title insurance policy, and no prior holder of the Mortgage, including
the Company, has done, by act or omission, anything which would impair the
coverage of such lender’s title insurance policy including without limitation,
no unlawful fee, commission,
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kickback
or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Company;
(q) No
Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and there is
no
event which, with the passage of time or with notice and the expiration of
any
grace or cure period, would constitute a default, breach, violation or event
of
acceleration, and neither the Company nor its predecessors have waived any
default, breach, violation or event of acceleration;
(r) No
Mechanics’ Liens. There are no mechanics’ or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location
of Improvements; No Encroachments. All improvements which were
considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or
regulation;
(t) Origination;
Payment Terms. The Mortgage Loan was originated by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal
or
state authority. Principal payments on the Mortgage Loan commenced no
more than seventy days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate and, with respect to any
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap, the Periodic Cap, and
the
Adjustment Date, are as set forth on the related Mortgage Loan
Schedule. The Mortgage Note is payable in equal monthly installments
of principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the adjustments
to
the Mortgage Interest Rate on each Adjustment Date, with interest calculated
and
payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated
maturity date, over an original term of not more than fifteen years from
commencement of amortization. Unless otherwise specified on the
related Mortgage Loan Schedule, the Mortgage Loan is payable on the first day
of
each month. There are no Convertible Mortgage Loans which contain a
provision allowing the Mortgagor to convert the Mortgage Note from an adjustable
interest rate Mortgage Note to a fixed interest rate Mortgage
Note. The Mortgage Loan does not require a balloon payment on its
stated maturity date;
(u) Customary
Provisions. The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits
of
the security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee’s sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan
and
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foreclosure
on, or trustee’s sale of, the Mortgaged Property pursuant to the proper
procedures, the holder of the Mortgage Loan will be able to deliver good and
merchantable title to the Mortgaged Property. There is no homestead
or other exemption available to a Mortgagor which would interfere with the
right
to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the
Mortgage;
(v) Conformance
with Underwriting Guidelines. The Mortgage Loan was underwritten
in accordance with the Company’s Underwriting Guidelines in effect at the time
the Mortgage Loan was originated. The Mortgage Loan is in conformity
with the standards of Xxxxxxx Mac or Xxxxxx Mae under one of their respective
home mortgage purchase programs (except that the principal balance of certain
Mortgage Loans may have exceeded the limits of Xxxxxx Xxx and Xxxxxxx Mac)
and
the Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac, Xxxxxx
Xxx;
(w) Occupancy
of the Mortgaged Property. As of the related Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to
the use and occupancy of the same, including but not limited to certificates
of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Except as otherwise stated on the
Mortgage Loan Schedule, the Mortgagor represented at the time of origination
of
the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as
the
Mortgagor’s primary residence;
(x) No
Additional Collateral. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and
the
security interest of any applicable security agreement or chattel mortgage
referred to in (j) above;
(y) Deeds
of Trust. In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and
no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee’s sale after
default by the Mortgagor;
(z) Acceptable
Investment. The Company has no knowledge of any circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor
or the Mortgagor’s credit standing that can reasonably be expected to cause
private institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan;
(aa) Delivery
of Mortgage Documents. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered for
the
Mortgage Loan by the Company under this Agreement as set forth in
Exhibit C attached hereto have been delivered to the
Custodian. The Company is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit B, except for such
documents the originals of which have been delivered to the
Custodian;
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(bb) Condominiums/Planned
Unit Developments. If the dwelling on the Mortgaged Property is a
condominium unit or a planned unit development (other than a de minimus planned
unit development) such condominium or planned unit development project meets
Xxxxxx Mae and Xxxxxxx Mac eligibility requirements.
(cc) Transfer
of Mortgage Loans. The Assignment of Mortgage is in recordable
form and is acceptable for recording under the laws of the jurisdiction in
which
the Mortgaged Property is located;
(dd) Due
on Sale. The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage
Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagor thereunder;
(ee) Consolidation
of Future Advances. Any future advances made prior to the related
Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of
the Mortgage securing the consolidated principal amount is expressly insured
as
having first (with respect to a First Lien Loan) or second (with respect to
a
Second Lien Loan) lien priority by a title insurance policy, an endorsement
to
the policy insuring the mortgagee’s consolidated interest or by other title
evidence acceptable to Xxxxxx Mae and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(ff) Mortgaged
Property Undamaged. There is no proceeding pending or, to the
best of the Company’s knowledge, threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended; and
(gg) Collection
Practices; Escrow Deposits. The origination, servicing and
collection practices used with respect to the Mortgage Loan have been in
accordance with Accepted Servicing Practices, and have been in all respects
in
compliance with all applicable laws and regulations. The Mortgage
Loan has been serviced by the Company and any predecessor servicer in accordance
with the terms of the Mortgage Note. With respect to escrow deposits
and Escrow Payments, all such payments are in the possession of the Company
and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow
Payments have been collected in full compliance with state and federal
law. An escrow of funds is not prohibited by applicable law and has
been established in an amount sufficient to pay for every item which remains
unpaid and which has been assessed but is not yet due and payable. No
escrow deposits or Escrow Payments or other charges or payments due the Company
have been capitalized under the Mortgage or the Mortgage Note and no such escrow
deposits or Escrow Payments are being held by the Company for any work on a
Mortgaged Property which has not been completed;
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(hh) Appraisal. The
Mortgage File contains an appraisal of the related Mortgage Property signed
prior to the approval of the Mortgage Loan application by a qualified appraiser,
duly appointed by the Company, who had no interest, direct or indirect in the
Mortgaged Property or in any loan made on the security thereof; and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfy the requirements of Xxxxxx
Mae or Xxxxxxx Mac, as applicable, or Title XI of the Federal Institutions
Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated;
(ii) Servicemembers
Civil Relief Act. No relief has been requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act;
(jj) Environmental
Matters. The Mortgaged Property is free from any and all toxic or
hazardous substances and there exists no violation of any local, state or
federal environmental law, rule or regulation. To the best of the
Company’s knowledge, there is no pending action or proceeding directly involving
any Mortgaged Property in which compliance with any environmental law, rule
or
regulation is an issue; and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation consisting a
prerequisite to use and enjoyment of said property;
(kk) Insurance. The
Mortgaged Property securing each Mortgage Loan is insured by an insurer
acceptable to FHA or VA, as applicable, against loss by fire and such hazards
as
are covered under a standard extended coverage endorsement, in an amount which
is not less than the lesser of 100% of the insurable value of the Mortgaged
Property and the outstanding principal balance of the Mortgage Loan, but in
no
event less than the minimum amount necessary to fully compensate for
any damage or loss on a replacement cost basis; if the Mortgaged
Property is a condominium unit, it is included under the coverage afforded
by a
blanket policy for the project; the insurance policy contains a standard
clause naming the originator of such mortgage loan, its successor and
assigns, as insured mortgagee; if upon origination of the Mortgage Loan, the
improvements on the Mortgaged Property were in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (A) the outstanding principal balance of the Mortgage Loan,
(B) the full insurable value and (C) the maximum amount of insurance
which was available under the Flood Disaster Protection Act of 1983, as
amended. The Company has caused or will cause to be performed any and
all acts required to preserve the rights and remedies of the Purchaser in any
insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of policies
or
interests therein, and establishments of coinsured, joint loss payee and
mortgagee rights in favor of the Purchaser; No action, inaction, or
event has occurred and no state of fact exists or has existed that has resulted
or will result in the exclusion from, denial of, or defense to coverage under
any applicable pool insurance policy, special hazard insurance policy, PMI
Policy or bankruptcy bond, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by the
Company or any designee of the Company or any corporation in which the
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Company
or any officer, director, or employee had a financial interest at the time
of
placement of such insurance;
(ll) Regarding
the Mortgagor. The Mortgagor is one or more natural persons
and/or trustees for an Illinois land trust or a trustee under a “living trust”
and such “living trust” is in compliance with Xxxxxx Xxx guidelines for such
trusts;
(mm) Predatory
Lending Regulations; High Cost Loans. None of the Mortgage Loans
are classified as (a) High Cost Loan or Covered Loan,
(b) a “high cost” loans under Section 32 of the Home
Ownership and Equity Protection Act of 1994, as amended, or (c) ”high cost
home,” “threshold,” “covered,” “high risk home,” or “predatory” or similar loans
under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans
having high interest rates, points and/or fees); provided that any Mortgage
Loan
secured by a Mortgaged Property in Illinois characterized as a “threshold” loan
shall not be a “high cost” loan unless it is characterized as “predatory” under
applicable local law;
(nn) Simple
Interest Mortgage Loans. None of the Mortgage Loans are simple
interest Mortgage Loans;
(oo) Single-Premium
Credit Life Insurance. No Mortgagor was required to purchase any
single premium credit insurance policy (e.g., life, mortgage, disability,
property, accident, unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of
credit. No Mortgagor obtained a prepaid single-premium credit
insurance policy (e.g., life, mortgage, disability, property, accident,
unemployment, mortgage or health insurance) in connection with the origination
of the Mortgage Loan. No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies or debt cancellation
agreements as part of the origination of, or as a condition to closing, such
Mortgage Loan;
(pp) Negative
Amortization. No Mortgage Loan permits negative
amortization;
(qq) Tax
Services. Each Mortgage Loan is either (i) a First Lien Loan
covered by either (x) a paid in full, life of loan tax service contract issued
by First American Real Estate Tax Service or Land America Real Estate Tax
Services, and such contract is transferable, or (y) a tax service monitoring
contract with ZC Sterling Tax Solutions, or (ii) a Second Lien Loan
subordinate to the First Lien Loan, which to the best of Seller’s knowledge, is
covered by a paid in full, life of loan, tax service contract issued by First
American Real Estate Tax Service or Land America Real Estate Tax Services,
and
such contract is transferable;
(rr) Flood
Certification Contract. The Company has obtained a life of loan,
transferable flood certification contract with an Approved Flood Policy Insurer
in its sole discretion for each Mortgage Loan and such contract is assignable
without penalty, premium or cost to the Purchaser;
(ss) FICO
Scores. Each Mortgage Loan has a non-zero FICO
score;
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(tt) Prepayment
Penalty. With respect to each Mortgage Loan that has a Prepayment
Penalty feature, each such Prepayment Penalty is enforceable and will be
enforced by the Company during the period the Company is acting as Servicer
for
the benefit of the Purchaser, and each Prepayment Penalty in permitted pursuant
to federal, state and local law. Each such Prepayment Penalty is in
an amount not more than the maximum amount permitted under applicable law and
no
such Prepayment Penalty may provide for a term in excess of five (5) years
with respect to Mortgage Loans originated prior to October, 1,
2002. With respect to Mortgage Loans originated on or after October
1, 2002, the duration of the Prepayment Penalty period shall not exceed three
(3) years from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the Prepayment Penalty period to no more than three (3)
years
from the date of the related Mortgage Note and the Mortgagor was notified in
writing of such reduction in Prepayment Penalty period. With respect
to any Mortgage Loan that contains a provision permitting imposition of a
Prepayment Penalty upon a prepayment prior to maturity: (i) the Mortgage
Loan’s provides some benefit to the Mortgagor (e.g., a rate or fee
reduction) in exchange for accepting such Prepayment Penalty, (ii) the
Mortgage Loan’s originator had a written policy of offering the Mortgagor or
requiring third-party brokers to offer the Mortgagor, the option of obtaining
a
mortgage loan that did not require payment of such a penalty, and (iii) the
Prepayment Penalty was adequately disclosed to the Mortgagor in the mortgage
loan documents pursuant to applicable state, local and federal law;
(uu) Recordation. Each
original Mortgage was recorded and all subsequent assignments of the original
Mortgage (other than the assignment to the Purchaser) have been recorded in
the
appropriate jurisdictions wherein such recordation is necessary to perfect
the
lien thereof as against creditors of the Company, or is in the process of being
recorded;
(vv) Leaseholds. If
the Mortgage Loan is secured by a long-term residential lease, (1) the
lessor under the lease holds a fee simple interest in the land; (2) the
terms of such lease expressly permit the mortgaging of the leasehold estate,
the
assignment of the lease without the lessor’s consent and the acquisition by the
holder of the Mortgage of the rights of the lessee upon foreclosure or
assignment in lieu of foreclosure or provide the holder of the Mortgage with
substantially similar protections; (3) the terms of such lease do not
(a) allow the termination thereof upon the lessee’s default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease
in the event of damage or destruction as long as the Mortgage is in existence,
(c) prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies relating
to
the Mortgaged Property or (d) permit any increase in rent other than
pre-established increases set forth in the lease; (4) the original term of
such lease is not less than 15 years; (5) the term of such lease does
not terminate earlier than five years after the maturity date of the
Mortgage Note; and (6) the Mortgaged Property is located in a jurisdiction
in which the use of leasehold estates in transferring ownership in residential
properties is a widely accepted practice;
(ww) Payment
in Full. No Mortgage Loan will be paid in full on or prior to the
related Closing Date;
(xx) Qualified
Mortgage. The Mortgage Loan is a qualified mortgage under
Section 860G(a)(3) of the Code;
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(yy) Georgia
Fair Lending Act. There is no Mortgage Loan that was originated
at any time during the period commencing on October 1, 2002 and ending on
March 7, 2003, with an initial balance equal to or less than $322,700,
which is secured by property located in the State of Georgia; there is no
Mortgage Loan that was originated on or after March 7, 2003 which is a
“high cost home loan” as defined under the Georgia Fair Lending
Act;
(zz)
Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(aaa) No
Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant
to which Monthly Payments are paid or partially paid with funds deposited in
any
separate account established by the Company, the Mortgagor, or anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions which may constitute a “buydown”
provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(bbb) Conversion
to Fixed Interest Rate. With respect to Adjustable Rate Mortgage
Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(ccc) Disclosure
Materials. The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by, and the
Company has complied with, all applicable law with respect to the making of
the
Mortgage Loans. The Company shall maintain such statement in the
Mortgage File;
(ddd) No
Defense to Insurance Coverage. No action has been taken or failed
to be taken, no event has occurred and no state of facts exists or has existed
on or prior to the related Closing Date (whether or not known to the Company
on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of
the
loss otherwise due thereunder to the insured), provided this shall not include
the failure of such insurer to pay by reason of such insurer’s breach of such
insurance policy or such insurer’s financial inability to pay;
(eee) Prior
Servicing. Each Mortgage Loan has been serviced in all material
respects in strict compliance with Accepted Servicing Practices;
(fff) Credit
Information. As to each consumer report (as defined in the Fair
Credit Reporting Act, Public Law 91-508) or other credit information furnished
by the Company to the Purchaser, that Company has full right and authority
and
is not precluded by law or contract from furnishing such information to the
Purchaser and the Purchaser is not precluded from furnishing the same to any
subsequent or prospective purchaser of such Mortgage;
(ggg) Origination. No
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay
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and
the
extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan;
(hhh) Co-op
Loans. With respect to a Mortgage Loan that is a Co-op Loan, the
stock that is pledged as security for the Mortgage Loan is held by a person
as a
tenant-stockholder (as defined in Section 216 of the Code) in a cooperative
housing corporation (as defined in Section 216 of the Code);
(iii) Construction
or Rehabilitation of Mortgaged Property. No Mortgage Loan was
made in connection with the construction (other than a “construct-to-perm” loan)
or rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(jjj) No
Prior Offer. The Mortgage Loan has not previously been offered
for sale;
(kkk) No
Fraud. No fraud, error, omission, misrepresentation, negligence
or similar occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including without limitation, the Mortgagor, any appraiser,
any builder or developer, or any other party involved in the origination of
the
Mortgage Loan or in the application for any insurance in relation to such
Mortgage Loan. The Company has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(lll) HOEPA. No
Mortgage Loan is classified as a Predatory Mortgage Loan under Section 32
of the Home Ownership and Equity Protection Act of 1994, as amended, or any
similar state or local law including, without limitation, the Local Law for
the
City of New York, No. 36 relating to predatory lending passed by the New
York City Council on November 20, 2002, as amended from time to
time;
(mmm) Fair
Credit Reporting Act. The Company has and shall in its capacity
as servicer, for each Mortgage Loan, fully furnished, in accordance with the
Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three
of
the credit repositories), on a monthly basis;
(nnn) [Reserved]
(ooo) FHA
Insurance/VA Guaranty. Each FHA Mortgage Loan was underwritten in
accordance with FHA standards and is fully-insured by the FHA, which insurance
is in full force and effect, and the Mortgage Loan is not subject to any defect
which would diminish or impair the FHA insurance, and all prior transfers,
if
any, of the Mortgage Loan have been, and the transactions herein contemplated
are, in compliance with the FHA regulations, and no circumstances exist with
respect to the FHA Mortgage Loans which would permit the FHA to deny coverage
under the FHA insurance; and each VA Mortgage Loan was underwritten in
accordance with VA standards and is guaranteed by the VA, which guaranty is
in
full force and effect, and the Mortgage Loan is not subject to any defect which
would diminish or impair the VA guaranty (other than a potential valuation
of
the mortgaged property), and all prior
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transfers,
if any, of the Mortgage Loan have been, and the transactions herein contemplated
are, in compliance with the VA regulations, and no circumstances exist with
respect to the VA Mortgage Loan which would permit the VA to deny coverage
under
the VA guaranty. No Mortgage Loan is a VA Vendee Loan, Title I
Loan or Section 235 Loan. Each Mortgage Loan was previously
included in a GNMA mortgage loan pool and was repurchased from such pool, in
accordance with applicable GNMA guidelines, by the Company or a predecessor
servicer, after such Mortgage Loan missed one or more Monthly Payments and
remained delinquent for 90 consecutive days or more; and
(ppp) No
Arbitration. No Mortgagor with respect to any Mortgage Loans
originated on or after August 1, 2004 agreed to submit to arbitration to
resolve any dispute arising out of or relating in any way to the Mortgage Loan
transaction; and
(qqq) Origination
Practices/No Steering. The Mortgagor was not encouraged or
required to select a mortgage loan product offered by the Mortgage Loan’s
originator which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Mortgage Loan’s origination, such Mortgagor
did not qualify taking into account such facts as, without limitation, the
Mortgage Loan’s requirements and the Mortgagor’s credit history, income, assets
and liabilities and debt-to-income ratios for a lower-cost credit product then
offered by the Mortgage Loan’s originator or any affiliate of the Mortgage
Loan’s originator. If, at the time of loan application, the Mortgagor
may have qualified for a lower-cost credit product then offered by any mortgage
lending affiliate of the Mortgage Loan’s originator, the Mortgage Loan’s
originator referred the Mortgagor’s application to such affiliate for
underwriting consideration. For a Mortgagor who seeks financing
through a Mortgage Loan originator’s higher-priced subprime lending channel, the
Mortgagor was directed towards or offered the Mortgage Loan originator’s
standard mortgage line if the Mortgagor was able to qualify for one of the
standard products, unless such Mortgagor requested a specific
product;
(rrr) Underwriting
Methodology. The methodology used in underwriting the extension
of credit for each Mortgage Loan does not rely solely on the extent of the
Mortgagor’s equity in the collateral as the principal determining factor in
approving such extension of credit. The methodology employed objective criteria
such as the Mortgagor’s income, assets and liabilities, to the proposed mortgage
payment and, based on such methodology, the Mortgage Loan’s originator made a
reasonable determination that at the time of origination the Mortgagor had
the
ability to make timely payments on the Mortgage Loan. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to make timely
payments on the Mortgage Loan;
(sss) Points
and Fees. No Mortgagor was charged “points and fees” (whether or
not financed) in an amount greater than 5% of the principal amount of such
Mortgage Loan, whichever is greater. For purposes of this
representation, such 5% limitation is calculated in accordance with Xxxxxx
Mae’s
anti-predatory lending requirements as set forth in the Xxxxxx Mae Guides and
“points and fees” (x) include origination, underwriting, broker and
finder fees and charges that the mortgagee imposed as a condition of making
the
Mortgage Loan, whether they are paid to the mortgagee or a third party; and
(y)
exclude bona fide discount points, fees paid for actual services rendered
in connection with the origination of the Mortgage Loan (such as attorneys’
fees, notaries fees and fees paid for property appraisals, credit reports,
surveys, title
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examinations
and extracts, flood and tax certifications, and home inspections), the cost
of
mortgage insurance or credit-risk price adjustments, the costs of title, hazard,
and flood insurance policies, state and local transfer taxes or fees, escrow
deposits for the future payment of taxes and insurance premiums, and other
miscellaneous fees and charges which miscellaneous fees and charges in total,
do
not exceed 0.25% of the principal amount of such Mortgage Loan;
(ttt) Fees
Charges. All points, fees and charges (including finance charges)
and whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage Loan have been
disclosed in writing to the Mortgagor in accordance with applicable state and
federal law and regulation;
(uuu) Second
Lien Loans. With respect to each Second Lien Loan:
(i) No
Negative Amortization of Related First Lien Loan. The related
first lien loan does not permit negative amortization;
(ii) Request
for Notice; No Consent Required. Where required or customary in
the jurisdiction in which the Mortgaged Property is located, the original lender
has filed for record a request for notice of any action by the related senior
lienholder, and the Seller has notified such senior lienholder in writing of
the
existence of the Second Lien Loan and requested notification of any action
to be
taken against the Mortgagor by such senior lienholder. Either (a) no
consent for the Second Lien Loan is required by the holder of the related first
lien loan or (b) such consent has been obtained and is contained in the related
Mortgage File;
(iii) No
Default Under First Lien. To the best of Seller’s knowledge, the
related first lien loan is in full force and effect, and there is no default
lien, breach, violation or event which would permit acceleration existing under
such first lien mortgage or mortgage note, and no event which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event which would permit acceleration
under such first lien loan;
(iv) Right
to Cure First Lien. The related first lien mortgage contains a
provision which provides for giving notice of default or breach to the mortgagee
under the Mortgage Loan and allows such mortgagee to cure any default under
the
related first lien mortgage; and
(v) Principal
Residence. The related Mortgaged Property is the Mortgagor’s
principal residence.
Section
3.03 Remedies for Breach of Representations and
Warranties.
It
is
understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage
Loans to the Purchaser and the delivery of the Mortgage Loan Documents to the
Custodian and shall inure to the benefit of the Purchaser, notwithstanding
any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Company or the Purchaser of a
breach of any of the foregoing
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representations
and warranties which materially and adversely affects the value of the Mortgage
Loans or the interest of the Purchaser, or which materially and adversely
affects the interests of Purchaser in the related Mortgage Loan in the case
of a
representation and warranty relating to a particular Mortgage Loan (in the
case
of any of the foregoing, a “Breach”), the party discovering such Breach
shall give prompt written notice to the other.
With
respect to those representations and warranties which are made to the best
of
the Company’s knowledge, if it is discovered by the Company or the Purchaser
that the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interest of the Purchaser (or which materially and adversely affects
the value of a Mortgage Loan or the interests of the Purchaser in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), notwithstanding the Company’s lack of knowledge with
respect to the substance of such representation and warranty, such inaccuracy
shall be deemed a breach of the applicable representation and
warranty.
Within
60
days of the earlier of either discovery by or notice to the Company of any
Breach of a representation or warranty, the Company shall use its best efforts
promptly to cure such Breach in all material respects and, if such Breach cannot
be cured, the Company shall, at the Purchaser’s option, repurchase such Mortgage
Loan at the Repurchase Price. In the event that a Breach shall
involve any representation or warranty set forth in Section 3.01,
and such Breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the Company of such Breach, all of the Mortgage Loans
shall, at the Purchaser’s option, be repurchased by the Company at the
Repurchase Price. However, if the Breach shall involve a
representation or warranty set forth in Section 3.02 and the Company
discovers or receives notice of any such Breach within 120 days of the related
Closing Date, the Company shall, at the Purchaser’s option and provided that the
Company has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan (a “Deleted
Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage
Loan or Loans, provided that no such substitution shall be effected after the
Mortgage Loan has been conveyed as part of a Reconstitution transaction as
described in Section 9.01 hereof and no such substitution shall
occur later than 120 days after the related Closing Date. If the
Company has no Qualified Substitute Mortgage Loans, it shall repurchase the
deficient Mortgage Loan. Notwithstanding anything else contained in
this paragraph, (i) within 60 days after the earlier of either
discovery by, or notice to, the Company of any breach of the representation
or
warranty set forth in clauses (g), (i), (mm), (oo), (tt), (vv), (xx), (yy),
(fff), (lll), (mmm), (ppp), (rrr), (sss), (ttt) or (uuu) of
Section 3.02, the Company shall repurchase such Mortgage Loan at the
Repurchase Price. Any repurchase of a Mortgage Loan or Loans pursuant
to the foregoing provisions of this Section 3.03 shall occur on a
date designated by the Purchaser and shall be accomplished by deposit in the
Custodial Account of the amount of the Repurchase Price for distribution to
Purchaser on the next scheduled Remittance Date, after deducting therefrom
any
amount received in respect of such repurchased Mortgage Loan or Loans and being
held in the Custodial Account for future distribution.
At
the
time of repurchase or substitution, the Purchaser and the Company shall arrange
for the reassignment of the Deleted Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to
the
Deleted Mortgage Loan. In
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the
event
of a repurchase or substitution, the Company shall, simultaneously with such
reassignment, give written notice to the Purchaser that such repurchase or
substitution has taken place, amend the related Mortgage Loan Schedule to
reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and,
in
the case of substitution, identify a Qualified Substitute Mortgage Loan and
amend the related Mortgage Loan Schedule to reflect the addition of such
Qualified Substitute Mortgage Loan to this Agreement. In connection
with any such substitution, the Company shall be deemed to have made as to
such
Qualified Substitute Mortgage Loan the representations and warranties set forth
in this Agreement except that all such representations and warranties set forth
in this Agreement shall be deemed made as of the date of such
substitution. The Company shall effect such substitution by
delivering to the Custodian for such Qualified Substitute Mortgage Loan the
documents required by Section 2.03, with the Mortgage Note endorsed
as required by Section 2.03. No substitution will be made
in any calendar month after the Determination Date for such
month. The Company shall deposit in the Custodial Account the Monthly
Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan
or
Loans in the month following the date of such substitution. Monthly
Payments due with respect to Qualified Substitute Mortgage Loans in the month
of
substitution shall be retained by the Company. For the month of
substitution, distributions to Purchaser shall include the Monthly Payment
due
on any Deleted Mortgage Loan in the month of substitution, and the Company
shall
thereafter be entitled to retain all amounts subsequently received by the
Company in respect of such Deleted Mortgage Loan.
For
any
month in which the Company substitutes a Qualified Substitute Mortgage Loan
for
a Deleted Mortgage Loan, the Company shall determine the amount (if any) by
which the aggregate principal balance of all Qualified Substitute Mortgage
Loans
as of the date of substitution is less than the aggregate Stated Principal
Balance of all Deleted Mortgage Loans (after application of scheduled principal
payments due in the month of substitution). An amount equal to the
product of such shortfall multiplied by the percentage of par set forth in
the
definition of “Repurchase Price” shall be distributed by the Company in the
month of substitution pursuant to
Section 5.01. Accordingly, on the date of such
substitution, the Company shall deposit from its own funds into the Custodial
Account an amount equal such amount.
In
addition to such cure, repurchase and substitution obligation, the Company
shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach
of
the Company’s representations and warranties contained in this
Section 3.03. It is understood and agreed that the
obligations of the Company set forth in this Section 3.03 to cure or
repurchase a defective Loan and to indemnify the Purchaser as provided in this
Section 3.03 constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and
warranties.
Any
cause
of action against the Company relating to or arising out of the Breach of any
representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) discovery of such Breach by
the Purchaser or notice thereof by the Company to the Purchaser, (ii) the
failure by the Company to cure such Breach or repurchase
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such
Mortgage Loan as specified above, and (iii) any demand upon the Company by
the Purchaser for compliance with this Agreement.
With
respect to any Mortgage Loan, if the related Mortgagor is 30 or more days
delinquent with respect to any of the Mortgage Loan’s first two (2) Monthly
Payments due to the Purchaser after the related Closing Date, the Company shall,
upon receipt of notice from the Purchaser, which notice shall be received within
twelve (12) months of the Closing Date, promptly repurchase such Mortgage
Loan from the Purchaser in accordance with this Section 3.03 at the
Purchase Price set forth in the Purchase Price and Terms Letter;
provided, however, that no right to cure set forth therein
shall apply.
Section
3.04 Review of Mortgage Loans.
On
or
before the related Closing Date, the Purchaser shall have the right to review
the Mortgage Files on the Mortgaged Properties relating to the Mortgage Loans
purchased on the related Closing Date. In addition, the Purchaser
shall have the right to reject any Mortgage Loan which in the Purchaser’s sole
determination (i) fails to conform to Underwriting Guidelines, (ii) is
underwritten without verification of the Mortgagor’s income and assets and there
is no credit report or FICO Score, (iii) the Purchaser deems the Mortgage
Loan to not be an acceptable credit risk, or (iv) the value of the
Mortgaged Property pursuant to any BPO varies by more than plus or minus 15%
from the lesser of (A) the original appraised value of the Mortgaged
Property or (B) the purchase price of the Mortgaged Property as of the date
of origination. In the event that the Purchaser so rejects any
Mortgage Loan, the Company shall repurchase the rejected Mortgage Loan at the
Repurchase Price in the manner prescribed in Section 3.03 upon
receipt of notice from the Purchaser of any notice of its decision to reject
such Mortgage Loan. Any rejected Mortgage Loan shall be removed from
the terms of this Agreement. The Company shall make available all
files required by Purchaser in order to complete its review, including all
CRA/HMDA required data fields. To the extent that during the course
of the Purchaser’s initial review, the Purchaser discovers that the Mortgage
Loans do not otherwise meet the Company’s Underwriting Guidelines or the terms
of this Agreement, the Purchaser shall have the right to carry out additional
due diligence reviews, which additional due diligence shall be at the expense
of
the Purchaser. Purchaser’s decision to increase its due diligence
review or obtain additional BPO’s or other property evaluations is at its sole
discretion. The additional review may be for any reason including but
not limited to credit quality, property valuations, and data
integrity. Any review performed by the Purchaser prior to the related
Closing Date does not limit the Purchaser’s rights or the Company’s obligations
under this section.
Section
3.05 Repurchase of Mortgage Loans that Prepay in Full;
Certain Defaults; Missing Documents.
(a) If
any Mortgage Loan is prepaid in full (i) during the two days
immediately preceding the Closing Date or (ii) during the period
of time beginning on the related Closing Date ending on and including the last
day of the second calendar month immediately following the related Closing
Date,
the Company shall pay to the Purchaser, within three (3) Business Days of
such prepayment in full, an amount equal to the difference between the Purchase
Price Percentage and par, multiplied by the then outstanding principal balance
of
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such
Mortgage Loan (less, in the case of any prepayment accompanied by a prepayment
premium, the amount of such prepayment premium).
(b) The
Purchaser shall have the right to reject any Mortgage Loan for which the legal
documentation is missing or defective; provided, however, that
no document shall be deemed to be missing under this Section 3.05
prior to the tenth day after the related Closing Date, which period may be
subject to one 30-day extension, at the discretion of the Purchaser for a total
of 40 days. Such rejected Mortgage Loans shall, at the
Purchaser’s option, be repurchased by the Company at the Repurchase
Price. Purchaser shall notify the Company of any such rejected
Mortgage Loan no later than two (2) Business Days prior to the related
Closing Date.
(c) The
Purchaser shall have the right to reject any Mortgage Loan that does not conform
to the terms and conditions of the Purchase Price and Terms
Letter. Such rejected Mortgage Loans shall, at the Purchaser’s
option, be repurchased by the Company at the Repurchase
Price. Purchaser shall notify the Company of any such rejected
Mortgage Loan no later than two (2) Business Days prior to the related
Closing Date.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01 Company to Act as Servicer.
The
Company, as an independent contractor, shall service and administer the Mortgage
Loans and shall have full power and authority, acting alone, to do any and
all
things in connection with such servicing and administration which the Company
may deem necessary or desirable, consistent with the terms of this Agreement
and
with Accepted Servicing Practices. Notwithstanding anything in this
Article IV to the contrary, with respect to any action to be taken
or not taken with respect to the servicing of the Mortgage Loans that requires
the consent or approval of the Purchaser, after a Securitization Transaction
with respect to the related Mortgage Loan, such consent shall be exercised
by
the Company as servicer of the Mortgage Loans in accordance with Accepted
Servicing Standards.
Consistent
with the terms of this Agreement, the Company may waive, modify or vary any
term
of any Mortgage 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
Company’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser,
provided, however, that the Company shall not make any future
advances with respect to a Mortgage Loan and (unless the Mortgagor is in default
with respect to the Mortgage Loan or such default is, in the judgment of the
Company, imminent and the Company has obtained the prior written consent of
the
Purchaser) the Company shall not permit any modification of any material term
of
any Mortgage Loan including any modifications that would change the Mortgage
Interest Rate, defer or forgive the payment of principal or interest, reduce
or
increase the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage
Loan. Notwithstanding the foregoing, the Servicer shall not waive any
Prepayment Penalty or portion thereof unless (i) the enforceability thereof
shall have been limited by bankruptcy, insolvency, moratorium,
-42-
receivership
or other similar laws relating to creditors’ rights generally or is otherwise
prohibited by law, or (ii) the enforceability thereof shall have
been permanently limited due to acceleration in connection
with a foreclosure or other involuntary payment or
(iii) in the Servicer’s reasonable judgment, (x) such waiver relates
to a default or a reasonably foreseeable default, (y) such waiver would
maximize recovery of total proceeds taking into account the value of such
Prepayment Penalty and related Mortgage Loan and (z) doing so is standard
and customary in servicing Mortgage Loans (including any waiver of a Prepayment
Penalty in connection with a refinancing of a Mortgage Loan that is related
to a
default or reasonably foreseeable default). Except as provided in the
preceding sentence, in no event will the Servicer waive a Prepayment Penalty
in
connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default. If the Servicer
waives or does not collect all or a portion of a Prepayment Penalty
relating to a Principal Prepayment in full or in part due to any action or
omission of the Servicer, other than as permitted above, the Servicer shall
deposit from its own funds without any right of reimbursement therefor the
amount of such Prepayment Penalty (or such portion thereof as had been waived
for deposit) into the Custodial Account for distribution in accordance with
the
terms of this Agreement. In connection with any waiver of a
Prepayment Penalty by the Servicer, the Servicer shall account for such waiver
in its monthly reports as agreed upon by the Servicer and the
Purchaser. In the event of any such modification which permits the
deferral of interest or principal payments on any Mortgage Loan, the Company
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred, deposit
in the Custodial Account from its own funds, in accordance with
Section 5.03, the difference between (a) such month’s principal
and interest due at the Mortgage Loan Remittance Rate on the unpaid principal
balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Company shall be entitled to reimbursement for such
advances to the same extent as for all other advances made pursuant to
Section 5.03. Without limiting the generality of the
foregoing, the Company shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself and the Purchasers, all instruments
of satisfaction or cancellation, or of partial or full release, discharge and
all other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. If reasonably required by the
Company, the Purchaser shall furnish the Company with any powers of attorney
and
other documents necessary or appropriate to enable the Company to carry out
its
servicing and administrative duties under this Agreement.
In
servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
(similar in quality to the Mortgage Loans) for its own account, and shall follow
Accepted Servicing Practices where such practices do not conflict with the
requirements of this Agreement, and the Purchaser’s reliance on the
Company.
The
Mortgage Loans may be subserviced by a Subservicer on behalf of the Company
provided that the Subservicer is a Xxxxxx Xxx-approved servicer or a Xxxxxxx
Mac
seller/servicer in good standing, and no event has occurred, including but
not
limited to a change in insurance coverage, which would make it unable to comply
with the eligibility requirements for lenders imposed by Xxxxxx Xxx or for
seller/servicers imposed by Xxxxxxx Mac, or which would require notification
to
Xxxxxx Xxx or Xxxxxxx Mac. The Company may perform any of
its
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servicing
responsibilities hereunder or may cause the Subservicer to perform any such
servicing responsibilities on its behalf, but the use by the Company of the
Subservicer shall not release the Company from any of its obligations hereunder
and the Company shall remain responsible hereunder for all acts and omissions
of
the Subservicer as fully as if such acts and omissions were those of the
Company. The Company shall pay all fees and expenses of the
Subservicer from its own funds, and the Subservicer’s fee shall not exceed the
Servicing Fee.
At
the
cost and expense of the Company, without any right of reimbursement from the
Custodial Account, the Company shall be entitled to terminate the rights and
responsibilities of the Subservicer and arrange for any servicing
responsibilities to be performed by a successor Subservicer meeting the
requirements in the preceding paragraph, provided, however,
that nothing contained herein shall be deemed to prevent or prohibit the
Company, at the Company’s option, from electing to service the related Mortgage
Loans itself. In the event that the Company’s responsibilities and
duties under this Agreement are terminated pursuant to Section 9.04,
10.01 or 11.02, and if requested to do so by the Purchaser, the
Company shall at its own cost and expense terminate the rights and
responsibilities of the Subservicer as soon as is reasonably
possible. The Company shall pay all fees, expenses or penalties
necessary in order to terminate the rights and responsibilities of the
Subservicer from the Company’s own funds without reimbursement from the
Purchaser.
Notwithstanding
any of the provisions of this Agreement relating to agreements or arrangements
between the Company and the Subservicer or any reference herein to actions
taken
through the Subservicer or otherwise, the Company shall not be relieved of
its
obligations to the Purchaser and shall be obligated to the same extent and
under
the same terms and conditions as if it alone were servicing and administering
the Mortgage Loans. The Company shall be entitled to enter into an
agreement with the Subservicer for indemnification of the Company by the
Subservicer and nothing contained in this Agreement shall be deemed to limit
or
modify such indemnification.
Any
Subservicing Agreement and any other transactions or services relating to the
Mortgage Loans involving the Subservicer shall be deemed to be between the
Subservicer and Company alone, and the Purchaser shall have no obligations,
duties or liabilities with respect to the Subservicer including no obligation,
duty or liability of Purchaser to pay the Subservicer’s fees and
expenses. For purposes of distributions and advances by the Company
pursuant to this Agreement, the Company shall be deemed to have received a
payment on a Mortgage Loan when the Subservicer has received such
payment.
Section
4.02 Liquidation of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.01 is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace
period, the Company shall take such action as (1) the Company would take
under similar circumstances with respect to a similar mortgage loan held for
its
own account for investment, (2) shall be consistent with Accepted Servicing
Practices, (3) the Company shall determine prudently to be in the best
interest of Purchaser, and (4) is consistent with any related PMI Policy or
other applicable insurance or guaranty, if any. In
-44-
the
event
that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 and remains delinquent for a period of 90 days or
any other default continues for a period of 90 days beyond the expiration
of any grace or cure period, the Company shall commence foreclosure proceedings,
provided that, prior to commencing foreclosure proceedings, the Company
shall notify the Purchaser in writing of the Company’s intention to do so, and
the Company shall not commence foreclosure proceedings if the Purchaser objects
to such action within 10 Business Days of receiving such notice. In
the event the Purchaser objects to such foreclosure action, the Company shall
not be required to make Monthly Advances with respect to such Mortgage Loan,
pursuant to Section 5.03, and the Company’s obligation to make such
Monthly Advances shall terminate on the 90th day referred to
above. In such connection, the Company shall from its own funds make
all necessary and proper Servicing Advances, provided,
however, that the Company shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration or preservation
of
any Mortgaged Property, unless it shall determine that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it
shall
have priority for purposes of withdrawals from the Custodial Account pursuant
to
Section 4.05) or through Insurance Proceeds (respecting which it
shall have similar priority).
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Company has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Purchaser otherwise requests
an environmental inspection or review of such Mortgaged Property to be conducted
by a qualified inspector, the Company shall cause such property to be inspected
by a qualified environmental consulting firm. Upon completion of the
inspection, the Company shall promptly provide the Purchaser with a written
report of the environmental inspection.
After
reviewing the environmental inspection report, the Purchaser shall determine
how
the Company shall proceed with respect to the Mortgaged Property. In
the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed
for
all reasonable costs associated with such foreclosure or acceptance of a deed
in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled
to be
reimbursed from amounts in the Custodial Account pursuant to
Section 4.05 hereof. In the event the Purchaser directs
the Company not to proceed with foreclosure or acceptance of a deed in lieu
of
foreclosure, the Company shall be reimbursed for all Servicing Advances made
with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 4.05 hereof.
Section
4.03 Collection of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Company shall proceed diligently to collect all payments
due
under each of the Mortgage Loans when the same shall become due and payable
and
shall take special care in ascertaining and estimating Escrow Payments and
all
other charges that will become due
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and
payable with respect to the Mortgage Loan and the Mortgaged Property, to the
end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section
4.04 Establishment of and Deposits to Custodial
Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled “National City Mortgage Co., as
Servicer, in trust for Xxxxxx Xxxxxxx Mortgage Capital Inc. and/or
subsequent Purchasers of fixed and adjustable rate Mortgage Loans.” The
Custodial Account shall be established with a Qualified Depository acceptable
to
the Purchaser. Any funds deposited in the Custodial Account shall at
all times be fully insured to the full extent permitted under applicable
law. Funds deposited in the Custodial Account may be drawn on by the
Company in accordance with Section 4.05. The creation of
any Custodial Account shall be evidenced by a certification in the form of
Exhibit D-1 hereto, in the case of an account established with the
Company, or by a letter agreement in the form of Exhibit D-2 hereto,
in the case of an account held by a depository other than the
Company. A copy of such certification or letter agreement shall be
furnished to the Purchaser and, upon request, to any subsequent
Purchaser.
The
Company shall deposit in the Custodial Account on a daily basis, and retain
therein, the following collections received by the Company and payments made
by
the Company after the related Cut-off Date (other than payments of principal
and
interest due on or before the related Cut-off Date, (which amounts shall be
remitted to the Company), or with respect to each LPMI Loan, the amount of
the
LPMI Fee):
(i) all
payments on account of principal on the Mortgage Loans, including all Principal
Prepayments;
(ii) all
payments on account of interest on the Mortgage Loans adjusted to the Mortgage
Loan Remittance Rate;
(iii) all
Liquidation Proceeds;
(iv) all
Insurance Proceeds including amounts required to be deposited pursuant to
Section 4.10 (other than proceeds to be held in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or released
to the Mortgagor in accordance with Section 4.14),
Section 4.11 and Section 4.15;
(v) all
Condemnation Proceeds which are not applied to the restoration or repair of
the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14;
(vi) any
amount required to be deposited in the Custodial Account pursuant to
Section 4.01, 4.09, 5.01, 5.03, 6.01 or
6.02;
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(vii) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 3.03 or 3.05 and all amounts required to be
deposited by the Company in connection with a shortfall in principal amount
of
any Qualified Substitute Mortgage Loan pursuant to
Section 3.03;
(viii) with
respect to each Principal Prepayment in full or in part, the Prepayment Interest
Shortfall Amount, to be paid by the Company out of its own funds without
reimbursement therefor, if any, for the month of distribution. Such
deposit shall be made from the Company’s own funds, without reimbursement
therefor, up to a maximum amount per month of the Servicing Fee actually
received by the Company for such month for the Mortgage Loans;
(ix) any
amounts required to be deposited by the Company pursuant to
Section 4.11 in connection with the deductible clause in any
blanket hazard insurance policy; and
(x) any
amounts received with respect to or related to any REO Property and all REO
Disposition Proceeds pursuant to Section 4.16.
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of Ancillary Income, including late
payment charges and assumption fees, to the extent permitted by
Section 6.01, need not be deposited by the Company into the
Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit
of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to
Section 4.05. Prior to changing the location of the
Custodial Account, the Company shall give notice to the Purchaser of such
change, which notice shall set forth the new location of the Custodial Account
when established. The Company shall maintain adequate records with
respect to all withdrawals made pursuant to this
Section 4.04. All funds required to be deposited in the
Custodial Account shall be held in trust for the Purchaser until withdrawn
in
accordance with Section 4.05.
Section
4.05 Permitted Withdrawals From Custodial
Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(i) to
make payments to the Purchaser in the amounts and in the manner provided for
in
Section 5.01;
(ii) to
reimburse itself for Monthly Advances of the Company’s funds made pursuant to
Section 5.03, the Company’s right to reimburse itself pursuant to
this subclause (ii) being limited to amounts received on the related
Mortgage Loan which represent late payments of principal and/or interest
respecting which any such advance was made, it being understood that, in the
case of any such reimbursement, the Company’s right thereto shall be prior to
the rights of Purchaser, except that, where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03, 3.06 or
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6.02,
the Company’s right to such reimbursement shall be subsequent to the payment to
the Purchaser of the Repurchase Price pursuant to such sections and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loan;
(iii) to
reimburse itself for unreimbursed Servicing Advances, and for any unpaid
Servicing Fees, the Company’s right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds (not
required to be remitted to the Mortgagor) and such other amounts as may be
collected by the Company from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of any such reimbursement,
the Company’s right thereto shall be prior to the rights of Purchaser except
where the Company is required to repurchase a Mortgage Loan pursuant to
Section 3.03, 3.05 or 6.02, in which case the
Company’s right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to such sections and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loan;
(iv) to
pay itself any investment earnings accrued on funds deposited in the Custodial
Account;
(v) to
reimburse itself for expenses incurred and reimbursable to it pursuant to
Section 9.01;
(vi) to
pay any amount required to be paid pursuant to Section 4.16 related
to any REO Property, it being understood that in the case of any such
expenditure or withdrawal related to a particular REO Property, the amount
of
such expenditure or withdrawal from the Custodial Account shall be limited
to
amounts on deposit in the Custodial Account with respect to the related REO
Property;
(vii) to
clear and terminate the Custodial Account upon the termination of this
Agreement; and
(viii) to
withdraw funds deposited in error.
In
the
event that the Custodial Account is interest bearing, on each Remittance Date,
the Company shall withdraw all funds from the Custodial Account except for
those
amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such
withdrawn funds only for the purposes described in this
Section 4.05. The Company shall keep and maintain a
separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose
of justifying any withdrawals from the Custodial Account.
Section
4.06 Establishment of and Deposits to Escrow
Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more Escrow
Accounts, in the form of time deposit or demand accounts, titled, “National City
Mortgage Co., as Servicer, in trust for the
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Xxxxxx
Xxxxxxx Mortgage Capital Inc. and/or subsequent purchasers of Mortgage
Loans and various Mortgagors.” The Escrow Accounts shall be established with a
Qualified Depository, in a manner which shall provide maximum available
insurance thereunder. Funds deposited in the Escrow Account may be
drawn on by the Company in accordance with
Section 4.07. The creation of any Escrow Account shall be
evidenced by a certification in the form of Exhibit E-1 hereto, in
the case of an account established with the Company, or by a letter agreement
in
the form of Exhibit E-2 hereto, in the case of an account held by a
depository other than the Company. A copy of such certification shall
be furnished to the Purchaser and, upon request, to any subsequent
Purchaser.
The
Company shall deposit in the Escrow Account or Accounts on a daily basis, and
retain therein:
(i) all
Escrow Payments collected on account of the Mortgage Loans, for the purpose
of
effecting timely payment of any such items as required under the terms of this
Agreement; and
(ii) all
amounts representing Insurance Proceeds or Condemnation Proceeds which are
to be
applied to the restoration or repair of any Mortgaged Property.
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in
Section 4.07. The Company shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution, other than interest on escrowed funds required by law to be paid
to
the Mortgagor. To the extent required by law, the Company shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Section
4.07 Permitted Withdrawals From Escrow
Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Company
only:
(i) to
effect timely payments of ground rents, taxes, assessments, water rates,
mortgage insurance premiums, fire and hazard insurance premiums or other items
constituting Escrow Payments for the related Mortgage;
(ii) to
reimburse the Company for any Servicing Advances made by the Company pursuant
to
Section 4.08 with respect to a related Mortgage Loan, but only from
amounts received on the related Mortgage Loan which represent late collections
of Escrow Payments thereunder;
(iii) to
refund to any Mortgagor any funds found to be in excess of the amounts required
under the terms of the related Mortgage Loan;
(iv) for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the related
Mortgage and Mortgage Note;
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(v) for
application to restoration or repair of the Mortgaged Property in accordance
with the procedures outlined in Section 4.14;
(vi) to
pay to the Company, or any Mortgagor to the extent required by law, any interest
paid on the funds deposited in the Escrow Account;
(vii) to
clear and terminate the Escrow Account on the termination of this Agreement;
and
(viii) to
withdraw funds deposited in error.
Section
4.08 Payment of Taxes, Insurance and Other
Charges.
With
respect to each Mortgage Loan, the Company shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and 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
the applicable penalty or termination date and at a time appropriate for
securing maximum discounts allowable, if any, employing for such purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Company 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 Company shall determine
that
any such payments are made by the Mortgagor at the time they first become
due. The Company assumes full responsibility for the timely payment
of all such bills and shall effect timely payment of all such charges
irrespective of each Mortgagor’s faithful performance in the payment of same or
the making of the Escrow Payments, and the Company shall make advances from
its
own funds to effect such payments.
Section
4.09 Protection of Accounts.
The
Company may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository from time to time. Such transfer shall be made
only upon obtaining the consent of the Purchaser, which consent shall not be
withheld unreasonably.
The
Company shall bear any expenses, losses or damages sustained by the Purchaser
because the Custodial Account and/or the Escrow Account are not demand deposit
accounts.
Amounts
on deposit in the Custodial Account and the Escrow Account may at the option
of
the Company be invested in Eligible Investments; provided that in the event
that
amounts on deposit in the Custodial Account or the Escrow Account exceed the
amount fully insured by the FDIC (the “Insured Amount”) the Company shall
be obligated to invest the excess amount over the Insured Amount in Eligible
Investments on the same Business Day as such excess amount becomes present
in
the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Determination Date next following
the
date of such Eligible Investment, provided, however, that if
such Eligible Investment is an obligation of a Qualified Depository (other
than
the Company) that maintains the Custodial Account or the
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Escrow
Account, then such Eligible Investment may mature on such Remittance
Date. Any such Eligible Investment shall be made in the name of the
Company in trust for the benefit of the Purchaser. All income on or
gain realized from any such Eligible Investment shall be for the benefit of
the
Company and may be withdrawn at any time by the Company. Any losses
incurred in respect of any such investment shall be deposited in the Custodial
Account or the Escrow Account, by the Company out of its own funds immediately
as realized.
Section
4.10 Maintenance of Hazard Insurance.
The
Company shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by a generally
acceptable insurer rated A:VI or better in the current Best’s Key Rating Guide
(“Best’s”) or by an insurer acceptable to Xxxxxx Mae, Xxxxxxx Mac, GNMA
or VA, as applicable, against loss by fire, hazards of extended coverage and
such other hazards as are customary in the area where the Mortgaged Property
is
located, in an amount which is at least equal to the lesser of (i) the
replacement value of the improvements securing such Mortgage Loan and
(ii) the greater of (a) the outstanding principal balance of the
Mortgage Loan and (b) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer.
If
the
related Mortgaged Property is located in an area identified in the Federal
Register by the Flood Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration is in effect with a generally acceptable insurance
carrier rated A:VI or better in Best’s or in accordance with then
current Xxxxxx Mae, Xxxxxxx Mac, GNMA or VA guidelines, as
applicable, in an amount representing coverage not less than the lesser of
(i) the minimum amount required, under the terms of coverage, to compensate
for any damage or loss on a replacement cost basis (or the unpaid balance of
the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under
the Flood Disaster Protection Act of 1973, as amended. If at any time
during the term of the Mortgage Loan, the Company determines in accordance
with
applicable law and pursuant to the then current Xxxxxx Mae, Xxxxxxx Mac or
GNMA
guidelines, as applicable, that a Mortgaged Property is located in a special
flood hazard area and is not covered by flood insurance or is covered in an
amount less than the amount required by the Flood Disaster Protection Act of
1973, as amended, the Company shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Mortgagor
fails
to obtain the required flood insurance coverage within forty-five (45) days
after such notification, the Company shall immediately force place the required
flood insurance on the Mortgagor’s behalf.
If
a
Mortgage is secured by a unit in a condominium project, the Company shall verify
that the coverage required of the owner’s association, including hazard, flood,
liability, and fidelity coverage, is being maintained in accordance with then
current Xxxxxx Mae, Xxxxxxx Mac or GNMA requirements, as applicable, and secure
from the owner’s association its agreement to notify the Company promptly of any
change in the insurance coverage or of any condemnation or casualty loss that
may have a material effect on the value of the Mortgaged Property as
security.
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The
Company shall cause to be maintained on each Mortgaged Property earthquake
or
such other or additional insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In
the
event that any Purchaser or the Company shall determine that the Mortgaged
Property should be insured against loss or damage by hazards and risks not
covered by the insurance required to be maintained by the Mortgagor pursuant
to
the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor’s attention the desirability of protection of the Mortgaged
Property.
All
policies required hereunder shall name the Company as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution, which
shall provide for at least 30 days prior written notice of any
cancellation, reduction in amount or material change in coverage.
The
Company shall not interfere with the Mortgagor’s freedom of choice in selecting
either his insurance carrier or agent, provided, however, that
the Company shall not accept any such insurance policies from insurance
companies unless such companies are rated A:VI or better in Best’s or meet
Xxxxxx Mae, Xxxxxxx Mac or GNMA requirements, as applicable, and are
licensed to do business in the jurisdiction in which the Mortgaged Property
is
located. The Company shall determine that such policies provide
sufficient risk coverage and amounts, that they insure the property owner,
and
that they properly describe the property address. The Company shall
furnish to the Mortgagor a formal notice of expiration of any such insurance
in
sufficient time for the Mortgagor to arrange for renewal coverage by the
expiration date.
Pursuant
to Section 4.04, any amounts collected by the Company under any such
policies (other than amounts to be deposited in the Escrow Account and applied
to the restoration or repair of the related Mortgaged Property, or property
acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company’s normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 4.05.
Section
4.11 Maintenance of Mortgage Impairment
Insurance.
In
the
event that the Company shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy provides coverage
in
an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it
shall conclusively be deemed to have satisfied its obligations as set forth
in
Section 4.10. Any such policy shall be issued by an
issuer that has a Best rating of A:VI or better. Any amounts
collected by the Company under any such policy relating to a Mortgage Loan
shall
be deposited in the Custodial Account subject to withdrawal pursuant to
Section 4.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have
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been
maintained on the related Mortgaged Property a policy complying with
Section 4.10, and there shall have been a loss which would have been
covered by such policy, the Company shall deposit in the Custodial Account
at
the time of such loss the amount not otherwise payable under the blanket policy
because of such deductible clause, such amount to deposited from the Company’s
funds, without reimbursement therefor. Upon request of any Purchaser,
the Company shall cause to be delivered to such Purchaser a certified true
copy
of such policy and a statement from the insurer thereunder that such policy
shall in no event be terminated or materially modified without 30 days’
prior written notice to such Purchaser.
Section
4.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The
Company shall maintain with responsible companies, at its own expense, a blanket
Fidelity Bond and an Errors and Omissions Insurance Policy that meets the
requirements of Xxxxxx Mae or Xxxxxxx Mac, with broad coverage on all officers,
employees or other persons acting in any capacity requiring such persons to
handle funds, money, documents or papers relating to the Mortgage Loans
(“Company Employees”). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker’s Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions
Insurance Policy also shall protect and insure the Company against losses in
connection with the release or satisfaction of a Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby. No
provision of this Section 4.12 requiring such Fidelity Bond and
Errors and Omissions Insurance Policy shall diminish or relieve the Company
from
its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be acceptable
to
Xxxxxx Mae, Xxxxxxx Mac or GNMA, as applicable. Upon the request of
any Purchaser, the Company shall cause to be delivered to such Purchaser a
certified true copy of such fidelity bond and insurance policy and a statement
from the surety and the insurer that such fidelity bond and insurance policy
shall in no event be terminated or materially modified without 30 days’
prior written notice to the Purchaser.
Section
4.13 Inspections.
The
Company shall inspect the Mortgaged Property as often as deemed necessary by
the
Company to assure itself that the value of the Mortgaged Property is being
preserved. In addition, if any Mortgage Loan is more than
60 days delinquent, the Company immediately shall inspect the Mortgaged
Property and shall conduct subsequent inspections in accordance with Accepted
Servicing Practices or as may be required by the primary mortgage guaranty
insurer. The Company shall keep a written report of each such
inspection.
Section
4.14 Restoration of Mortgaged Property.
The
Company need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing
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Practices. At
a minimum, the Company shall comply with the following conditions in connection
with any such release of Insurance Proceeds or Condemnation
Proceeds:
(i) the
Company shall receive satisfactory independent verification of completion of
repairs and issuance of any required approvals with respect
thereto;
(ii) the
Company shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(iii) the
Company shall verify that the Mortgage Loan is not in default; and
(iv) pending
repairs or restoration, the Company shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Company is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Purchaser.
Section
4.15 Maintenance of PMI and LPMI Policy;
Claims.
(a) With
respect to each Mortgage Loan with a LTV in excess of 80%, the Company
shall:
(i) with
respect to Mortgage Loans which are not LPMI Loans, in accordance with state
and
federal laws and without any cost to the Purchaser, maintain or cause the
Mortgagor to maintain in full force and effect a PMI Policy insuring that
portion of the Mortgage Loan in excess of 75% (or such other percentage as
stated in the related Purchase Price and Terms Letter) of value, and shall
pay
or shall cause the Mortgagor to pay the premium thereon on a timely basis,
until
the LTV of such Mortgage Loan is reduced to 80%. In the event that
such PMI Policy shall be terminated, the Company shall obtain from another
Qualified Insurer a comparable replacement policy, with a total coverage equal
to the remaining coverage of such terminated PMI Policy, at substantially the
same fee level. If the insurer shall cease to be a Qualified Insurer,
the Company shall determine whether recoveries under the PMI Policy are
jeopardized for reasons related to the financial condition of such insurer,
it
being understood that the Company shall in no event have any responsibility
or
liability for any failure to recover under the PMI Policy for such
reason. If the Company determines that recoveries are so jeopardized,
it shall notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Company
shall not take any action which would result in noncoverage under any applicable
PMI Policy of any loss which, but for the actions of the Company would have
been
covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to
Section 4.01, the Company shall promptly notify the insurer under
the related PMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such PMI Policy and shall take all actions
which
may be required by such insurer as a condition to the continuation of coverage
under such PMI Policy. If such PMI Policy is
-54-
terminated
as a result of such assumption or substitution of liability, the Company shall
obtain a replacement PMI Policy as provided above.
(ii) with
respect to LPMI Loans, maintain in full force and effect an LPMI Policy insuring
that portion of the Mortgage Loan in excess of 75% (or such other percentage
as
stated in the related Purchase Price and Terms Letter) of value, and from time
to time, withdraw the LPMI Fee with respect to such LPMI Loan from the Custodial
Account in order to pay the premium thereon on a timely basis, for the term
of
such Mortgage Loan. In the event that the interest payments made with
respect to any LPMI Loan are less than the LPMI Fee, the Company shall advance
from its own funds the amount of any such shortfall in the LPMI Fee, in payment
of the premium on the related LPMI Policy. Any such advance shall be
a Servicing Advance subject to reimbursement pursuant to the provisions on
Section 4.05. In the event that such LPMI Policy shall be
terminated, the Company shall obtain from another Qualified Insurer a comparable
replacement policy, with a total coverage equal to the remaining coverage of
such terminated LPMI Policy, at substantially the same fee level. If
the insurer shall cease to be a Qualified Insurer, the Company shall determine
whether recoveries under the LPMI Policy are jeopardized for reasons related
to
the financial condition of such insurer, it being understood that the Company
shall in no event have any responsibility or liability for any failure to
recover under the LPMI Policy for such reason. If the Company
determines that recoveries are so jeopardized, it shall notify the Purchaser
and
the Mortgagor, if required, and obtain from another Qualified Insurer a
replacement insurance policy. The Company shall not take any action
which would result in noncoverage under any applicable LPMI Policy of any loss
which, but for the actions of the Company would have been covered
thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to
Section 6.01, the Company shall promptly notify the insurer under
the related LPMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such LPMI Policy and shall take all actions
which may be required by such insurer as a condition to the continuation of
coverage under such PMI Policy. If such LPMI Policy is terminated as
a result of such assumption or substitution of liability, the Company shall
obtain a replacement LPMI Policy as provided above.
(b) In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
PMI Policy or LPMI Policy in a timely fashion in accordance with the terms
of
such PMI Policy or LPMI Policy and, in this regard, to take such action as
shall
be necessary to permit recovery under any PMI Policy or LPMI Policy respecting
a
defaulted Mortgage Loan. Pursuant to Section 4.04, any
amounts collected by the Company under any PMI Policy or LPMI Policy shall
be
deposited in the Custodial Account, subject to withdrawal pursuant to
Section 4.05.
(c) Purchaser,
in its sole discretion, at any time, may (i) either obtain an additional
PMI Policy on any Mortgage Loan which already has a PMI Policy in place, or
(ii) obtain a PMI Policy for any Mortgage Loan which does not already have
a PMI Policy in place. In any event, the Company agrees to administer
such PMI Policies in accordance with the Agreement or any Reconstitution
Agreement.
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Section
4.16 Title, Management and Disposition of REO
Property.
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 taken in the
name of FV-1, Inc., or in the event the Purchaser is not authorized or permitted
to hold title to real property in the state where the REO Property is located,
or would be adversely affected under the “doing business” or tax laws of such
state by so holding title, the deed or certificate of sale shall be taken in
the
name of such Person or Persons as shall be consistent with an Opinion of Counsel
obtained by the Company from any attorney duly licensed to practice law in
the
state where the REO Property is located. The Person or Persons
holding such title other than the Purchaser shall acknowledge in writing that
such title is being held as nominee for the Purchaser.
The
Company shall manage, conserve, protect and operate each REO Property for the
Purchaser solely for the purpose of its prompt disposition and
sale. The Company, either itself or through an agent selected by the
Company, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property
in
the same locality as the REO Property is managed. The Company shall
attempt to sell the same (and may temporarily rent the same for a period not
greater than one year, except as otherwise provided below) on such terms and
conditions as the Company deems to be in the best interest of the Purchaser
and
if an election is or is to be made to treat the arrangement under which any
Mortgage Loan and any REO Property are held as a real estate mortgage investment
conduit within the meaning of Section 860D of the Code (a
“REMIC”), the Company shall service each such Mortgage Loan and REO
Property in a manner which does not cause the REMIC to fail to qualify as a
REMIC or result in the imposition of a tax upon the REMIC (including but not
limited to the tax on “prohibited transactions” as defined in
Section 860F(a)(2) of the Code, the tax on “contributions” to a
REMIC set forth in Section 860G(d) of the Code and the tax on “net
income from foreclosure property” as set forth in Section 860G(c) of
the Code).
The
Company shall use its best efforts to dispose of the REO Property as soon as
possible and shall sell such REO Property in any event within one year after
title has been taken to such REO Property, unless the Company determines, and
gives an appropriate notice to the Purchaser to such effect, that a longer
period is necessary for the orderly liquidation of such REO
Property. If a period longer than one year (but in no event in excess
of three years) is permitted under the foregoing sentence and is necessary
to sell any REO Property, the Company shall report monthly to the Purchaser
as
to the progress being made in selling such REO Property.
The
Company shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required
above.
The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the Purchaser. The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account. As soon as
practical thereafter the expenses of such sale shall be paid and
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the
Company shall reimburse itself for any related unreimbursed Servicing Advances,
unpaid Servicing Fees and unreimbursed advances made pursuant to
Section 5.03, and on the Remittance Date immediately following the
Principal Prepayment Period in which such sale proceeds are received the net
cash proceeds of such sale remaining in the Custodial Account shall be
distributed to the Purchaser.
The
Company shall withdraw the Custodial Account funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of
maintaining any hazard insurance pursuant to Section 4.10 and the
fees of any managing agent of the Company, a Subservicer, or the Company itself,
which fees shall not exceed $1,500 per Mortgage Loan. The Company
shall make monthly distributions on each Remittance Date to the Purchaser of
the
net cash flow from the REO Property (which shall equal the revenues from such
REO Property net of the expenses described in the Section 4.16 and
of any reserves reasonably required from time to time to be maintained to
satisfy anticipated liabilities for such expenses).
Notwithstanding
the foregoing, at any time and from time to time, the Purchaser may at its
election terminate this Agreement with respect to one or more REO Properties
as
provided by Section 11.02.
Section
4.17 Real Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.02, the Company
shall furnish to the Purchaser on or before the Remittance Date each month
a
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Company’s efforts in connection with the
sale of such REO Property and any rental of such REO Property incidental to
the
sale thereof for the previous month. That statement shall be
accompanied by such other information as the Purchaser shall reasonably
request.
Section
4.18 Liquidation Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by the
Company pursuant to a deed in lieu of foreclosure, the Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged
Property.
Section
4.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code.
Section
4.20 Notification of Adjustments
On
each
Adjustment Date, the Company shall make interest rate adjustments for each
Mortgage Loan in compliance with the requirements of the related Mortgage and
Mortgage Note. The Company shall execute and deliver the notices
required by each Mortgage and Mortgage Note regarding interest rate
adjustments. The Company also shall provide timely
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notification
to the Purchaser of all applicable data and information regarding such interest
rate adjustments and the Company’s methods of implementing such interest rate
adjustments. Upon the discovery by the Company or the Purchaser that
the Company has failed to adjust a Mortgage Interest Rate or a Monthly Payment
pursuant to the terms of the related Mortgage Note and Mortgage, the Company
shall immediately deposit in the Custodial Account from its own funds the amount
of any interest loss caused thereby without reimbursement therefor.
Section
4.21 Transfer of Servicing.
On
the
related Transfer Date, if any, the Purchaser, or its designee, shall assume
all
servicing responsibilities related to, and the Company cease all servicing
responsibilities related to, the related Mortgage Loans subject to such Transfer
Date. On or prior to the related Transfer Date, the Company shall, at
its sole cost and expense, take such steps as may be necessary or appropriate
to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(A) Notice
to Mortgagors. The Company shall mail to the Mortgagor of each
related Mortgage Loan a letter advising such Mortgagor of the transfer of the
servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990,
as amended; provided, however, that the content and format of
the letter shall have the prior approval of the Purchaser. The
Company shall provide the Purchaser with copies of all such related notices
no
later than the related Transfer Date.
(B) Notice
to Taxing Authorities and Insurance Companies. The Company shall
transmit to the applicable taxing authorities and insurance companies (including
primary mortgage insurance policy insurers, if applicable) and/or agents,
notification of the transfer of the servicing to the Purchaser, or its designee,
and instructions to deliver all notices, tax bills and insurance statements,
as
the case may be, to the Purchaser or its designee from and after the related
Transfer Date. The Company shall provide the Purchaser with copies of
all such notices no later than the related Transfer Date.
(C) Delivery
of Servicing Records. The Company shall forward to the Purchaser,
or its designee, all servicing records and the Servicing File in the Company’s
possession relating to each related Mortgage Loan.
(D) Escrow
Payments. The Company shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer an amount equal
to
the net Escrow Payments and suspense balances and all loss draft balances
associated with the related Mortgage Loans. The Company shall provide
the Purchaser with an accounting statement, in electronic format acceptable
to
the Purchaser in its sole discretion, of Escrow Payments and suspense balances
and loss draft balances sufficient to enable the Purchaser to reconcile the
amount of such payment with the accounts related to the Mortgage
Loans. Additionally, the Company shall wire transfer to the Purchaser
the amount of any agency, trustee or
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prepaid
Mortgage Loan payments and all other similar amounts held by the
Company.
(E) Payoffs
and Assumptions. The Company shall provide to the Purchaser, or
its designee, copies of all assumption and payoff statements generated by the
Company on the related Mortgage Loans from the related Cut-off Date to the
related Transfer Date.
(F) Mortgage
Payments Received Prior to Transfer Date. Prior to the related
Transfer Date all payments received by the Company on each related Mortgage
Loan
shall be properly applied by the Company to the account of each related
Mortgagor.
(G) Mortgage
Payments Received after Transfer Date. The amount of any related
Monthly Payments received by the Company after the related Transfer Date shall
be forwarded to the Purchaser by overnight mail on the date of
receipt. The Company shall notify the Purchaser of the particulars of
the payments, which notification requirement shall be satisfied if the Company
forwards with its payment sufficient information to permit appropriate
processing of the payment by the Purchaser. The Company shall assume
full responsibility for the necessary and appropriate legal application of
such
Monthly Payments received by the Company after the related Transfer Date with
respect to related Mortgage Loans then in foreclosure or bankruptcy; provided,
for purposes of this Agreement, necessary and appropriate legal application
of
such Monthly Payments shall include, but not be limited to, endorsement of
a
Monthly Payment to the Purchaser with the particulars of the payment such as
the
account number, dollar amount, date received and any special Mortgagor
application instructions and the Company shall comply with the foregoing
requirements with respect to all Monthly Payments received by the Company after
the related Transfer Date.
(H) Misapplied
Payments. Misapplied payments shall be processed as
follows:
(1) All
parties shall cooperate in correcting misapplication errors;
(2) The
party receiving notice of a misapplied payment occurring prior to the related
Transfer Date and discovered after such Transfer Date shall immediately notify
the other party;
(3) If
a misapplied payment which occurred prior to the related Transfer Date cannot
be
identified and said misapplied payment has resulted in a shortage in a Custodial
Account or Escrow Account, the Company shall be liable for the amount of such
shortage. The Company shall reimburse the Purchaser for the amount of
such shortage within thirty (30) days after receipt of written demand
therefor from the Purchaser;
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(4) If
a misapplied payment which occurred prior to the related Transfer Date caused
the purchase price to be incorrectly calculated as the result of an inaccurate
outstanding principal balance, a check shall be issued to the party shorted
by
the improper payment application within five (5) Business Days after notice
thereof by the other party; and
(5) Any
check issued under the provisions of this Section 4.21(H) shall be
accompanied by a statement indicating the corresponding Company and/or the
Purchaser Mortgage Loan identification number and an explanation of the
allocation of any such payments.
(I) Books
and Records. On the related Transfer Date, the books, records and
accounts of the Company with respect to the related Mortgage Loans shall be
delivered in accordance with all applicable Purchaser requirements.
(J) Reconciliation. The
Company shall, on or before the related Transfer Date, reconcile principal
balances and make any monetary adjustments required by the
Purchaser. Any such monetary adjustments will be transferred between
the Company and the Purchaser as appropriate.
(K) IRS
Forms. The Company shall or shall file all IRS forms 1099, 1099A,
1098 or 1041 and K-1 which are required to be filed on or before the related
Transfer Date in relation to the servicing and ownership of the related Mortgage
Loans. The Company shall provide copies of such forms to the
Purchaser upon request and shall reimburse the Purchaser for any costs or
penalties incurred by the Purchaser due to the Company’s failure to comply with
this paragraph.
(L) Tax
Monitoring Contracts. With respect to each First Lien Loan
subject to a tax service monitoring contract with ZC Sterling Tax Solutions
and
each Second Lien Loan subordinate to a first lien loan which is not covered
by
transferable, paid in full, life of loan tax service contract issued by First
American Real Estate Tax Service or Land America Real Estate Tax Services,
the
Company shall remit to the Purchaser a placement fee of seventy-two dollars
($72.00) for each such Mortgage Loan.
Section
4.22 Fair Credit Reporting Act.
(a) For
each Mortgage Loan, the Servicer shall furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit
files, to Equifax, Experian, and Trans Union Credit Information Company, or
their successors, on a monthly basis. The Servicer shall provide
evidence of such monthly reporting to the Purchaser upon request.
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ARTICLE
V
PAYMENTS
TO PURCHASER
Section
5.01 Remittances.
On
each
Remittance Date the Company shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial
Account as of the close of business on the Determination Date (net of charges
against or withdrawals from the Custodial Account pursuant to
Section 4.05), plus (b) all amounts, if any, which the Company
is obligated to distribute pursuant to Section 5.03, minus
(c) any amounts attributable to Principal Prepayments received after the
applicable Principal Prepayment Period which amounts shall be remitted on the
following Remittance Date, together with any additional interest required to
be
deposited in the Custodial Account in connection with such Principal Prepayment
in accordance with Section 4.04(viii), and minus (d) any
amounts attributable to Monthly Payments collected but due on a Due Date or
Dates subsequent to the first day of the month of the Remittance Date, which
amounts shall be remitted on the Remittance Date next succeeding the Due Period
for such amounts.
With
respect to any remittance received by the Purchaser after the second Business
Day following the Business Day on which such payment was due, the Company shall
pay to the Purchaser interest on any such late payment at an annual rate equal
to the Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the
Company on the date such late payment is made and shall cover the period
commencing with the day following such second Business Day and ending with
the
Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Company of any such
interest shall not be deemed an extension of time for payment or a waiver of
any
Event of Default by the Company.
Section
5.02 Statements to Purchaser.
Not
later
than the 5th
Business Day of each month (or if such 5th day is
not a
Business Day, the Business Day next succeeding such 5th day), the
Company
shall furnish to the Purchaser in electronic form monthly reports in the form
of
a standard Fidelity report in “Microsoft Excel” format with respect to the
Mortgage Loans and the period from but including the first day of the preceding
calendar month through but excluding the first day of such
month. Such statement shall also include information regarding
delinquencies on Mortgage Loans, indicating the number and aggregate principal
amount of Mortgage Loans which are delinquent (including number of days
delinquent through liquidation of the related REO Property) and the book value
of any REO Property. The Company shall submit to the Purchaser
monthly a liquidation report with respect to each Mortgaged Property sold in
a
foreclosure sale as of the related Record Date and not previously
reported.
In
addition, the Company shall provide each Purchaser with such information as
any
Purchaser may reasonably request from time to time concerning the Mortgage
Loans
as is
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necessary
for such Purchaser to prepare its federal income tax return and any and all
other tax returns, information statements or other filings required to be
delivered to any governmental taxing authority or to any Purchaser pursuant
to
any applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby.
Section
5.03 Monthly Advances by Company.
On
the
Business Day immediately preceding each Remittance Date, the Company shall
deposit in the Custodial Account from its own funds(or from funds held for
future distribution provided such funds are replaced and remitted when due
and
the Company’s parent (or its successor) has a long term credit rating
satisfactory to the applicable rating agencies) an amount equal to all Monthly
Payments (with interest adjusted to the Mortgage Loan Remittance Rate) which
were due on the Mortgage Loans during the applicable Due Period and which were
delinquent at the close of business on the immediately preceding Determination
Date or which were deferred pursuant to Section 4.01. The
Company’s obligation to make such Monthly Advances as to any Mortgage Loan will
continue through the last Monthly Payment due prior to the payment in full
of
the Mortgage Loan, or through the last Remittance Date prior to the Remittance
Date for the distribution of all Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds and Condemnation Proceeds) with respect
to the Mortgage Loan.
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 Transfers of Mortgaged Property.
The
Company shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to
the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the “due-on-sale”
clause applicable thereto, provided, however, that the
Company shall not exercise such rights if prohibited by law from doing so or
if
the exercise of such rights would impair or threaten to impair any recovery
under the related PMI or LPMI Policy, if any.
If
the
Company reasonably believes it is unable under applicable law to enforce such
“due-on-sale” clause, the Company shall enter into (i) an assumption and
modification agreement with the person to whom such property has been conveyed,
pursuant to which such person becomes liable under the Mortgage Note and the
original Mortgagor remains liable thereon or (ii) in the event the Company
is unable under applicable law to require that the original Mortgagor remain
liable under the Mortgage Note and the Company has the prior consent of the
primary mortgage guaranty insurer, a substitution of liability agreement with
the purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes
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liable
under the Mortgage Note. If an assumption fee is collected by the
Company for entering into an assumption agreement, such fee will be retained
by
the Company as additional servicing compensation. In connection with
any such assumption, neither the Mortgage Interest Rate borne by the related
Mortgage Note, the term of the Mortgage Loan nor the outstanding principal
amount of the Mortgage Loan shall be changed.
To
the
extent that any Mortgage Loan is assumable, the Company shall inquire diligently
into the creditworthiness of the proposed transferee, and shall use the
underwriting criteria for approving the credit of the proposed transferee which
are used by Xxxxxx Xxx with respect to underwriting mortgage loans of the same
type as the Mortgage Loan. If the credit of the proposed transferee
does not meet such underwriting criteria, the Company diligently shall, to
the
extent permitted by the Mortgage or the Mortgage Note and by applicable law,
accelerate the maturity of the Mortgage Loan.
Section
6.02 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Company of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Company shall notify the Purchaser in the monthly reports
as
provided in Section 5.02, and may request the release of any
Mortgage Loan Documents. In connection with any such prepayment in
full, the Company shall comply with all applicable laws regarding satisfaction,
release or reconveyance with respect to the Mortgage.
If
the
Company satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage or should the Company
otherwise prejudice any rights the Purchaser may have under the mortgage
instruments, upon written demand of the Purchaser, the Company shall repurchase
the related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors
and Omissions Insurance Policy as provided for in Section 4.12
insuring the Company against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
Section
6.03 Servicing Compensation.
As
compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on
the
Mortgage Loans the amount of its Servicing Fee. The Servicing Fee
shall be payable monthly and shall be computed on the basis of the same unpaid
principal balance and for the period respecting which any related interest
payment on a Mortgage Loan is computed. The Servicing Fee shall be
payable only at the time of and with respect to those Mortgage Loans for which
payment is in fact made of the entire amount of the Monthly
Payment. The obligation of the Purchaser to pay the Servicing Fee is
limited to, and payable solely from, the interest portion of such Monthly
Payments collected by the Company.
Additional
servicing compensation in the form of assumption fees and Ancillary Income
shall
be retained by the Company to the extent not required to be deposited in the
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Custodial
Account. The Company shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement thereof except as specifically provided for
herein.
Section
6.04 Right to Examine Company Records.
The
Purchaser shall have the right to examine and audit any and all of the books,
records, or other information of the Company, whether held by the Company or
by
another on its behalf, with respect to or concerning this Agreement or the
Mortgage Loans, during business hours or at such other times as may be
reasonable under applicable circumstances, upon reasonable advance
notice.
ARTICLE
VII
WHOLE
LOAN TRANSFERS AND SECURITIZATION TRANSACTIONS
Section
7.01 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon a Whole-Loan Transfer or a Securitization Transaction on One
or
More Reconstitution Dates.
The
Purchaser and the Company agree that with respect to some or all of the Mortgage
Loans, from time to time, the Purchaser may effect a Reconstitution in each
case
retaining the Company as the servicer thereof, or as applicable the
“seller/servicer.” The Company’s obligations set forth in this
Section 7.01 shall apply only to each Reconstitution of ten (10) or
more Mortgage Loans, unless otherwise agreed to by the Company and the
Purchaser.
The
Company agrees to execute in connection with any Whole Loan Transfer to Xxxxxx
Mae or Xxxxxxx Mac, any and all reasonably acceptable pool purchase contracts,
and/or agreements among the Purchaser, the Seller, Xxxxxx Mae or Xxxxxxx Mac
(as
the case may be) and any servicer in connection with a Whole Loan Transfer,
a
seller’s warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the parties, and in
connection with a Securitization Transaction, a pooling and servicing agreement
in form and substance reasonably acceptable to the parties or an Assignment
and
Recognition Agreement substantially in the form attached hereto as Exhibit
P (collectively, the agreements referred to herein are designated, the
“Reconstitution Agreements”), together with an opinion of counsel with
respect to such Reconstitution Agreements.
Unless
otherwise agreed to between the Purchaser and the Company, the Purchaser shall
give the Company 15 days notice of any Reconstitution. The
Company shall cooperate with the Purchaser in connection with each
Reconstitution in accordance with this Section 7.01. In
connection therewith the Company shall:
(a) as
of the closing date of each Reconstitution (i) make all representations and
warranties set forth herein with respect to the Company, and (ii) reaffirm
that all representations and warranties made with respect to the Mortgage Loans
as of the Closing Date, were true and correct in all respects as of such
date;
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(b) negotiate
in good faith and execute any Reconstitution Agreements required by Purchaser
to
effectuate the foregoing provided such agreements create no greater obligation
liability or cost on the part of the Company than otherwise set forth in this
Agreement;
(c) represent
to the Purchaser, the depositor, the trustee, and the initial purchaser of
the
securities issued in connection with any Reconstitution
that: (1) that the Company has serviced the Mortgage Loans in
accordance with the terms of this Agreement, and has otherwise complied with
all
covenants and obligations hereunder, and (2) that the Company has taken no
action that would, nor omitted to take any required action the omission of
which
would, have the effect of impairing the mortgage insurance or guarantee on
the
Mortgage Loans. The Company also agrees to represent the accuracy of
any information provided to the Purchaser by the Company for inclusion in any
prospectus supplement, offering memorandum or term sheet prepare in connection
with any Reconstitution;
(d) deliver
an opinion of counsel (which can be an opinion of in-house counsel to the
Company) reasonably acceptable to the Purchaser; provided that any
out-of-pocket, third party expenses incurred by the Company in connection with
the foregoing shall be paid by the Purchaser; and
(e) provide
as applicable:
(i) any
and all information and appropriate verification of information which may be
reasonably available to the Company, whether through letters of its auditors
and
counsel or otherwise, as the Purchaser shall request;
(ii) (x)
the Annual Certification executed by a senior officer of the Company responsible
for the servicing of the Mortgage Loans; and (y) such additional
statements, certificates or other similar documents of the Company or reports
from the Company’s accountants in connection with a Pass-Through Transfer and in
substance as required by applicable law;
(iii) such
additional representations, warranties, covenants, opinions of counsel,
letters from auditors, financial description of the Company as
servicer for inclusion in any offering memorandum to be distributed
to potential investors in connection with a Reconstitution with respect to
the
Mortgage Loans, and certificates of public officials or officers of the Company
as are reasonably believed necessary by the trustee, any Rating Agency, the
Purchaser, as the case may be, in connection with such
Reconstitution. The Purchaser shall pay all third party costs
associated with the preparation of such information. The Company
shall execute any Reconstitution Agreements required within a reasonable period
of time after receipt of such Reconstitution Agreements which time shall be
reasonably sufficient for the Company and Company’s counsel to review such
Reconstitution Agreements and unless otherwise agreed to by the Company, the
Company’s obligations under any document executed in conjunction with such a
Transfer or Reconstitution shall not exceed its obligations to the Purchaser
under this Agreement. Under this Agreement, the Company shall
retain a servicing fee at a rate per annum equal to no less than 0.25% per
Mortgage Loan; and
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(iv) to
execute, deliver and satisfy all conditions set forth in any indemnity agreement
required by the Purchaser or any such participant, including, without
limitation, an Indemnification and Contribution Agreement in substantially
the
form attached hereto as Exhibit O.
The
Company shall indemnify the Purchaser, each affiliate designated by the
Purchaser and each Person who controls the Purchaser or such affiliate and
hold
each of them harmless from and against any losses, damages, liabilities,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them
may
sustain in any way related to any false statements or omissions with respect
to
information provided by or on behalf of the Company regarding the Company,
the
Company’s servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. If such indemnification is not
available, the Company shall contribute to such losses, damages, liabilities,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses in proportion to the
Company’s relative benefit and fault, in which case the relative benefit for the
Company, and the persons related thereto, will be measured relative to the
Purchase Price and the relative benefit of the Purchaser and the persons related
thereto, will be measured relative to the underwriting discount received in
connection with the Whole Loan Transfer and/or Securitization
Transaction. But, in no event shall the Company be obligated to any
greater extent under a Reconstitution Agreement than it is under this
Agreement. For purposes of this section, “Purchaser” shall mean the
Person then acting as the Purchaser under this Agreement and any and all Persons
who previously were “Purchasers” under this Agreement.
In
the
event the Purchaser has elected to have the Company hold record title to the
Mortgages, prior to a Reconstitution Date the Company or its designee shall
prepare an Assignment of Mortgage in blank from the Company, acceptable to
Xxxxxx Xxx, Xxxxxxx Mac, the trustee or such third party, as the case may be,
for each Mortgage Loan that is part of a Reconstitution and shall pay all
preparation and recording costs associated therewith. The Company
shall execute each Assignment of Mortgage, track such Assignments of Mortgage
to
ensure they have been recorded and deliver them as required by Xxxxxx Mae,
Xxxxxxx Mac, the trustee or such third party, as the case may be, upon the
Company’s receipt thereof. Additionally, the Company shall prepare
and execute, at the direction of the Purchaser, any note endorsements in
connection with any and all Reconstitution Agreements.
All
Mortgage Loans not sold or transferred pursuant to a Reconstitution shall be
subject to this Agreement and shall continue to be serviced in accordance with
the terms of this Agreement and with respect thereto this Agreement shall remain
in full force and effect.
Unless
otherwise agreed to between the Company and the Purchaser, with respect to
any
Mortgage Loan Package, the Company will not be obligated to enter into any
Reconstitution Agreement in connection with a Securitization Transaction or
Whole Loan Transfer in excess of any express restrictions set forth in the
related Assignment and Conveyance and related Purchase Price and Terms
Letter.
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Notwithstanding
any provisions of this Agreement to the contrary, all Mortgage Loans sold
or
transferred to Xxxxxx Mae or Xxxxxxx Mac shall be serviced in accordance
with
the Servicing Guides, as the same may be amended from time to
time. The Company further agrees that it will service the related
Mortgage Loans in accordance with the terms of any Xxxxxx Mae or Xxxxxxx
Mac
requirements which are in addition to those set forth in the Servicing
Guides. The Company acknowledges that the Purchaser may from to time
sell or transfer certain of the Mortgage Loans to Xxxxxx Mae and/ or Xxxxxxx
Mac
or deliver certain securities secured by the Mortgage Loans to Xxxxxx Mae
or
Xxxxxxx Mac to be guaranteed. In the event such sale or
delivery occurs, the Company agrees that it shall deliver to Xxxxxx Mae,
Xxxxxxx
Mac, FHA, or VA, as applicable, all reports, certificates, and other
documentation required by each such agency and that it shall remit to Xxxxxx
Mae
or Xxxxxxx Mac, as applicable, all amounts required to be remitted in
accordance such agency’s guaranty program. The Purchaser and the
Company agree that any Mortgage Loans sold by the Purchaser to Xxxxxx Mae,
will
be managed in accordance with the Process Guidelines set forth in
Exhibit G hereto. The Company acknowledges that the
requirements of the Process Guidelines are in addition to the Company’s
obligations to service the Loans in accordance with the Servicing Guides
and
Accepted Servicing Practices. All Mortgage Loans not sold or
transferred pursuant to Whole Loan Transfers or Securitization Transactions
shall remain subject to this Agreement and shall continue to be serviced
in
accordance with the terms of this Agreement and with respect thereto this
Agreement shall remain in full force and effect.
ARTICLE
VIII
COMPANY
TO COOPERATE
Section
8.01 Provision of Information.
During
the term of this Agreement, the Company shall furnish to the Purchaser such
periodic, special, or other reports or information and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan, whether
or
not provided for herein, as shall be necessary, reasonable, or appropriate
with
respect to the Purchaser, any regulatory requirement pertaining to the Purchaser
or the purposes of this Agreement. All such reports, documents or
information shall be provided by and in accordance with all reasonable
instructions and directions which the Purchaser may give. Any special
reports or information delivered shall be at the Purchaser’s
expense.
The
Company shall execute and deliver all such instruments and take all such action
as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this
Agreement.
Section
8.02 Financial Statements; Servicing
Facility.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective Purchaser a Consolidated Statement of Operations of the Company
for the most recently completed five fiscal years for which such a
statement is available, as well as a Consolidated Statement of Condition at
the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. Purchaser shall not make such statement available to any
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prospective
Purchaser unless such prospective Purchaser has signed a confidentiality
agreement with respect to the information provided with respect to Company
unless already publicly available. The Company also shall make
available any comparable interim statements to the extent any such statements
have been prepared by or on behalf of the Company (and are available upon
request to members or stockholders of the Company or to the public at
large). If it has not already done so, the Company shall furnish
promptly to the Purchaser copies of the statement specified above.
The
Company also shall make available to Purchaser or prospective Purchaser a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit any prospective Purchaser to inspect
the Company’s servicing facilities or those of any Subservicer for the purpose
of satisfying such prospective Purchaser that the Company and any Subservicer
have the ability to service the Mortgage Loans as provided in this
Agreement.
ARTICLE
IX
THE
COMPANY
Section
9.01 Indemnification; Third Party Claims.
(a) Breaches
of Representations and Warranties. The Company agrees to
indemnify the Purchaser and any successor servicer and each of their present
and
former officers, directors, representatives, agents and affiliates and hold
them
harmless from and against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
fees
and expenses that the Purchaser may sustain in any way related to any assertion
based on, grounded upon or resulting from a breach of any of the Company’s
representations, warranties or covenants contained herein (including any losses
incurred in connection with any repurchase hereunder). The Company
shall immediately notify the Purchaser if a claim is made by a third party
with
respect to this Agreement or the Mortgage Loans, assume (with the consent of
the
Purchaser and with counsel reasonably satisfactory to the Purchaser) the defense
of any such claim and pay all expenses in connection therewith, including
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it or the Purchaser in respect of such claim but
failure to so notify the Purchaser shall not limit its obligations
hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Purchaser unless such
settlement includes an unconditional release of the Purchaser from all liability
that is the subject matter of such claim. In addition to the
obligations of the Company set forth in this Section 9.01(a), the
Purchaser may pursue any and all remedies otherwise available at law or in
equity, including, but not limited to, the right to seek damages. The
indemnification provisions of this Agreement shall survive any Reconstitution
of
the Mortgage Loans or termination of this Agreement.
It
is
understood and agreed that the obligations of the Company set forth in
Sections 3.03 and 9.01(a) to cure, substitute for or
repurchase a defective Mortgage Loan and to indemnify the Purchaser constitute
the sole remedies of the Purchaser respecting a Breach of the representations
and warranties set forth in Sections 3.01 and
3.02.
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(b) Servicing. The
Company shall indemnify the Purchaser and any successor servicer and each of
their present and former officers, directors, representatives, agents and
affiliates and hold them harmless against any and all claims, losses, damages,
penalties, fines, and forfeitures, including, but not limited to reasonable
and
necessary legal fees and related costs, judgments, and any other costs, fees
and
expenses that the Purchaser may sustain in any way related to the
failure of the Company to (a) perform its duties, obligations, covenants,
agreements, warranties or representations contained in this agreement or service
the Mortgage Loans in strict compliance with the terms of this Agreement or
any
Reconstitution Agreement entered into pursuant to Section 7.01,
and/or (b) comply with applicable law. The Company immediately
shall notify the Purchaser if a claim is made by a third party with respect
to
this Agreement or any Reconstitution Agreement or the Mortgage Loans, shall
promptly notify Xxxxxx Xxx, Xxxxxxx Mac, or the trustee with respect to any
claim made by a third party with respect to any Reconstitution Agreement, assume
(with the prior written consent of the Purchaser) the defense of any such claim
and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Purchaser in respect of such claim. The Company
shall follow any reasonable written instructions received from the Purchaser
in
connection with such claim. The Purchaser promptly shall reimburse
the Company for all amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the Company’s indemnification
pursuant to Section 3.03, or the failure of the Company to
(a) service and administer the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement, and/or (b) comply
with applicable law.
Section
9.02 Merger or Consolidation of the
Company.
The
Company shall keep in full effect its existence, rights and franchises as a
corporation, and shall obtain and preserve its qualification to do business
as a
foreign corporation in each jurisdiction in which such qualification is or
shall
be necessary to protect the validity and enforceability of this Agreement or
any
of the Mortgage Loans and to perform its duties under this
Agreement.
Any
person into which the Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company,
shall
be the successor of the Company hereunder, without the execution or filing
of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however,
that in the event that such successor servicer is not acceptable to the
Purchaser in its sole discretion, the Purchaser shall have the right to
terminate the successor servicer’s rights under this servicing
agreement without payment of any Termination Fee.
Section
9.03 Limitation on Liability of Company and
Others.
Neither
the Company nor any of the directors, officers, employees or agents of the
Company shall be under any liability to the Purchaser for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Company or any such person against any
Breach of warranties or representations made herein, or failure to perform
its
obligations in
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strict
compliance with any standard of care set forth in this Agreement, or any
liability which would otherwise be imposed by reason of any breach of the terms
and conditions of this Agreement. Nothing in this provision shall
protect the Company against any liability that would otherwise be imposed by
reason of the willful misfeasance, bad faith or negligence in the performance
of
duties or by reason of reckless disregard of the obligations or duties
hereunder. The Company and any director, officer, employee or agent
of the Company 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 Company 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 Mortgage Loans in accordance with this Agreement and which in
its
opinion may involve it in any expense or liability, provided,
however, that the Company may, with the consent of the Purchaser, undertake
any such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such
event, the Company shall be entitled to reimbursement from the Purchaser of
the
reasonable legal expenses and costs of such action except when such expenses
and
costs are subject to the Company’s indemnification under this
Agreement.
Section
9.04 Limitation on Resignation and Assignment by
Company.
The
Purchaser has entered into this Agreement with the Company and subsequent
Purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance
thereof. Therefore, the Company shall neither assign this Agreement
or the servicing hereunder or delegate its rights or duties hereunder or any
portion hereof (to other than a Subservicer) or sell or otherwise dispose of
all
or substantially all of its property or assets without the prior written consent
of the Purchaser, which consent shall not be unreasonably withheld.
The
Company shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the
Company. Any such determination permitting the resignation of the
Company shall be evidenced by an Opinion of Counsel to such effect delivered
to
the Purchaser which Opinion of Counsel shall be in form and substance acceptable
to the Purchaser. No such resignation shall become effective until a
successor shall have assumed the Company’s responsibilities and obligations
hereunder in the manner provided in Section 12.01.
Without
in any way limiting the generality of this Section 9.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof (to other than a Subservicer) or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Purchaser, then the Purchaser shall have the right to terminate this
Agreement upon notice given as set forth in Section 10.01, without
any payment of any penalty or damages and without any liability whatsoever
to
the Company or any third party.
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ARTICLE
X
DEFAULT
Section
10.01 Events of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Company:
(i) any
failure by the Company to remit to the Purchaser any payment required to be
made
under the terms of this Agreement which continues unremedied for a period of
two days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by
the
Purchaser; or
(ii) failure
by the Company duly to observe or perform in any material respect any other
of
the covenants, obligations or agreements on the part of the Company set forth
in
this Agreement which continues unremedied for a period of 30 days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Purchaser; or
(iii) failure
by the Company to maintain its license to do business in any jurisdiction where
the Mortgage Property is located; or
(iv) a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator
in
any insolvency, readjustment of debt, including bankruptcy, marshaling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation
of
its affairs, shall have been entered against the Company and such decree or
order shall have remained in force undischarged or unstayed for a period of
60 days; or
(v) the
Company shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Company or of or
relating to all or substantially all of its property; or
(vi) the
Company 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,
bankruptcy or reorganization statute, make an assignment for the benefit of
its
creditors, voluntarily suspend payment of its obligations or cease its normal
business operations for three Business Days; or
(vii) the
Company ceases to meet the qualifications of a Xxxxxx Xxx, Xxxxxxx Mac, GNMA
or
VA servicer, as applicable; or
(viii) the
Company fails to maintain a minimum net worth of $25,000,000; or
(ix) the
Company attempts to assign its right to servicing compensation hereunder or
the
Company attempts, without the consent of the Purchaser, to sell or
-71-
otherwise
dispose of all or substantially all of its property or assets or to assign
this
Agreement or the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof (to other than a Subservicer) in violation
of
Section 9.04.
If
the
Company obtains knowledge of an Event of Default, the Company shall notify
the
Purchaser. In each and every such case, so long as an Event of
Default shall not have been remedied, in addition to whatsoever rights the
Purchaser may have at law or equity to damages, including injunctive relief
and
specific performance, the Purchaser, by notice in writing to the Company, may
terminate all the rights and obligations of the Company under this Agreement
and
in and to the Mortgage Loans and the proceeds thereof.
Upon
receipt by the Company of such written notice, all authority and power of the
Company under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.01. Upon written request from any Purchaser,
the Company shall prepare, execute and deliver to the successor entity
designated by the Purchaser any and all documents and other instruments, place
in such successor’s possession all Mortgage Files, and do or cause to be done
all other acts or things necessary or appropriate to effect the purposes of
such
notice of termination, including but not limited to the transfer and endorsement
or assignment of the Mortgage Loans and related documents, at the Company’s sole
expense. The Company shall cooperate with the Purchaser and such
successor in effecting the termination of the Company’s responsibilities and
rights hereunder, including without limitation, the transfer to such successor
for administration by it of all cash amounts which shall at the time be credited
by the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Section
10.02 Waiver of Defaults.
By
a
written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon
any waiver of a past default, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to
the
extent expressly so waived.
ARTICLE
XI
TERMINATION
Section
11.01 Termination.
This
Agreement shall terminate upon either: (i) the later of the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; or (ii) mutual consent
of the Company and the Purchaser in writing. Upon written request
from the Purchaser in connection with any such termination, the Company shall
prepare, execute and deliver, any and all documents and other instruments,
place
in the Purchaser’s possession all Mortgage Files, and do or accomplish all other
acts or things
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necessary
or appropriate to effect the purposes of such notice of termination, whether
to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Company’s sole expense. The
Company agrees to cooperate with the Purchaser and such successor in effecting
the termination of the Company’s responsibilities and rights hereunder as
servicer, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Section
11.02 Termination Without Cause.
The
Purchaser may terminate, at its sole option, any rights the Company may have
hereunder, without cause, upon sixty (60) days notice or as provided in
this Section 11.02. Any such notice of termination shall
be in writing and delivered to the Company by registered mail as provided in
Section 12.05. The Purchaser and the Servicer shall
comply with the termination procedures set forth in Section 12.01
hereof.
In
the
event the Purchaser terminates the Company without cause with respect to some
or
all of the Mortgage Loans, the Purchaser shall be required to pay to the Company
a termination fee in an amount equal to the product of (a) 2.50% and
(b) the outstanding principal balance of each such Mortgage
Loan.
Notwithstanding
and in addition to the foregoing, the Company shall give the Purchaser prompt
written notice in the event that (i) a Mortgage Loan becomes delinquent for
a period of 90 days or more (a “Delinquent Mortgage Loan”) or (ii) a
Mortgage Loan becomes an REO Property. The Purchaser may, at its
election, within five (5) days of receipt of such notice, terminate this
Agreement with respect to such Delinquent Mortgage Loan or REO Property without
payment of a termination fee therefor. If the Purchaser elects to
terminate this Agreement with respect to such Delinquent Mortgage Loan or REO
Property after the end of such election period, the Purchaser shall pay the
Company the lesser of (i) the Company’s actual out-of-pocket costs and
expenses incurred with respect to such Delinquent Mortgage Loan or REO Property
and (ii) $1,500. In the event of any termination of the
Agreement pursuant to this paragraph, the Purchaser shall reimburse the Company
for all outstanding Servicing Advances or Servicing Fees.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Successor to Company.
Prior
to
termination of the Company’s responsibilities and duties under this Agreement
pursuant to Section 9.04, 10.01, 11.01 (ii) or
pursuant to Section 11.02 after the 60 day period has expired, the
Purchaser shall, (i) succeed to and assume all of the Company’s
responsibilities, rights, duties and obligations under this Agreement, or
(ii) appoint a successor having the characteristics set forth in clauses
(i) through (iii) of Section 9.02 and which shall succeed to
all rights and assume all of the responsibilities, duties and liabilities of
the
Company
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under
this Agreement prior to the termination of Company’s responsibilities, duties
and liabilities under this Agreement. In connection with such
appointment and assumption, the Purchaser may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and
such
successor shall agree. In the event that the Company’s duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Company shall discharge such duties
and responsibilities during the period from the date it acquires knowledge
of
such termination until the effective date thereof with the same degree of
diligence and prudence which it is obligated to exercise under this Agreement,
and shall take no action whatsoever that might impair or prejudice the rights
or
financial condition of its successor. The resignation or removal of
the Company pursuant to the aforementioned sections shall not become effective
until a successor shall be appointed pursuant to
this Section 12.01 and shall in no event relieve the
Company of the representations and warranties made pursuant to Section
3.01 and 3.02 and the remedies available to the Purchaser under
Sections 3.03, and 3.05, it being understood and agreed that
the provisions of such Sections 3.01, 3.02, 3.03, and
3.05 shall be applicable to the Company notwithstanding
any such sale,
assignment, resignation or termination of the Company, or the termination of
this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Company and to the Purchaser an instrument accepting such appointment,
wherein the successor shall make the representations and warranties set forth
in
Section 3.01, except for subsections (f), (h), (i) and (k) thereof,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Company, with
like
effect as if originally named as a party to this Agreement. Any
termination or resignation of the Company or termination of this Agreement
pursuant to Section 9.04, 10.01, 11.01 or 11.02
shall not affect any claims that any Purchaser may have against the Company
arising out of the Company’s actions or failure to act prior to any such
termination or resignation.
The
Company shall deliver promptly to the successor servicer the Funds in the
Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account
for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in
the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Company.
Upon
a
successor’s acceptance of appointment as such, the Company shall notify by mail
the Purchaser of such appointment in accordance with the procedures set forth
in
Section 12.05.
Section
12.02 Amendment.
This
Agreement may be amended from time to time by the Company and the Purchaser
by
written agreement signed by the Company and the Purchaser.
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Section
12.03 Governing Law; Jurisdiction; Consent to Service of
Process.
THIS
AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED COUNTERPART THEREOF
IS
RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND SHALL BE DEEMED TO HAVE
BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL BE GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS
CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE
COMPANY IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF
THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA
FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT; (II) AGREES THAT A FINAL JUDGMENT IN ANY ACTION
OR
PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY
OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY
LAW; AND (III) CONSENTS TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF
BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES
HEREUNDER.
Section
12.04 Duration of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of
the Mortgage Loans by the Purchaser. Notwithstanding any such
termination or the occurrence of an Event of Default, all of the representations
and warranties and covenants hereunder shall continue and
survive. The obligations of Company under Sections 7.01
and 9.01 shall survive the termination of this Agreement.
Section
12.05 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
registered mail, postage prepaid, addressed as follows:
(i) if
to the Company:
National
City Mortgage Co.
ATTN: Xxxx
Xxxxx
0000
Xxxxxxx Xx.
Xxxxxxxxxx,
Xxxx 00000
with
a
copy to:
National
City Mortgage Co.
ATTN: X.
Xxxxxxx Case
0000
Xxxxxxx Xx.
Xxxxxxxxxx,
Xxxx 00000
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or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company;
(ii) if
to Purchaser:
Xxxxxx
Xxxxxxx Mortgage Capital Inc.
1221
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxx
Xxxxxxxxxx - Whole Loans Operations Manager
Fax:
000-000-0000
Email:
xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with
copies to:
Xxxx
Xxxxxxxx
Xxxxxx
Xxxxxxx – Servicing Oversight
0000
X-Xxx Xxx.
Xxxxx
000
Xxxx
Xxxxx, Xxxxxxx 00000
Fax:
000-000-0000
Email:
xxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
Xxxxx
Xxxxxx
Xxxxxx
Xxxxxxx – RFPG
0000
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
000-000-0000
Email:
xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
Section
12.06 Severability of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
Section
12.07 Relationship of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Company shall be
rendered as an independent contractor and not as agent for the
Purchaser.
Section
12.08 Execution; Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to
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Section 9.04,
this Agreement shall inure to the benefit of and be binding upon the Company
and
the Purchaser and their respective successors and assigns.
Section
12.09 Recordation of Assignments of
Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Company’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
Section
12.10 Assignment by Purchaser.
The
Purchaser shall have the right, without the consent of the Company but subject
to the limit set forth in Section 2.02 hereof, to assign, in whole
or in part, its interest under this Agreement with respect to some or all of
the
Mortgage Loans, and designate any person to exercise any rights of the Purchaser
hereunder. Upon such assignment of rights and assumption of
obligations, the assignee or designee shall accede to the rights and obligations
hereunder of the Purchaser with respect to such Mortgage Loans and the Purchaser
as assignor shall be released from all obligations hereunder with respect to
such Mortgage Loans from and after the date of such assignment and
assumption. All references to the Purchaser in this Agreement shall
be deemed to include its assignee or designee.
Section
12.11 No Personal Solicitation.
From
and
after the related Closing Date, the Company hereby agrees that it will not
take
any action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on the Company’s behalf, to
personally, by telephone or mail (electronic means or otherwise), solicit the
borrower or obligor under any Mortgage Loan for any purpose whatsoever,
including to refinance a Mortgage Loan, in whole or in part, without the prior
written consent of the Purchaser. It is understood and agreed that
all rights and benefits relating to the solicitation of any Mortgagors and
the
attendant rights, title and interest in and to the list of such Mortgagors
and
data relating to their Mortgages (including insurance renewal dates) shall
be
transferred to the Purchaser pursuant hereto on the related Closing Date and
the
Company shall take no action to undermine these rights and
benefits. Notwithstanding the foregoing, it is understood and agreed
that promotions undertaken by the Company or any affiliate of the Company which
are directed to the general public at large, including, without limitation,
mass
mailings based on commercially acquired mailing lists, or the Company’s customer
portfolio, and newspaper, radio and television advertisements shall not
constitute solicitation under this Section 12.11
Section
12.12 Waiver of Trial by Jury.
THE
COMPANY AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO
A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT.
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Section
12.13 Confidentiality.
Each
of
the Purchaser, the Company and the Servicer shall employ proper procedures
and
standards designed to maintain the confidential nature of the terms of this
Agreement, except to the extent: (a) the disclosure of which is
reasonably believed by such party to be required in connection with regulatory
requirements or other legal requirements relating to its affairs; (b) disclosed
to any one or more of such party’s employees, officers, directors, agents,
attorneys or accountants who would have access to the contents of this Agreement
and such data and information in the normal course of the performance of such
Person’s duties for such party, to the extent such party has procedures in
effect to inform such Person of the confidential nature thereof; (c) that is
disclosed in a prospectus, prospectus supplement or private placement memorandum
relating to a securitization of the Mortgage Loans by the Purchaser (or an
affiliate assignee thereof) or to any Person in connection with the resale
or
proposed resale of all or a portion of the Mortgage Loans by such party in
accordance with the terms of this Agreement; and (d) that is reasonably believed
by such party to be necessary for the enforcement of such party’s rights under
this Agreement.
Notwithstanding
any other express or implied agreement to the contrary, each of the Purchaser,
the Company and the Servicer agree and acknowledge that each of them and each
of
their employees, representatives, and other agents may disclose to any and
all
persons, without limitation of any kind, the tax treatment and tax structure
of
the transaction and all materials of any kind (including opinions or other
tax
analyses) that are provided to any of them relating to such tax treatment and
tax structure, except to the extent that confidentiality is reasonably necessary
to comply with U.S. federal or state securities laws. For purposes of
this paragraph, the terms “tax treatment” and “tax structure” have the meanings
specified in Treasury Regulation section 1.6011 4(c).
ARTICLE
XIII
COMPLIANCE
WITH REGULATION AB
Section
13.01 Intent of the Parties;
Reasonableness.
The
Purchaser and the Company acknowledge and agree that the purpose of
Article 13 of this Agreement is to facilitate compliance by the
Purchaser and any Depositor with the provisions of Regulation AB and related
rules and regulations of the Commission. Although Regulation AB is
applicable by its terms only to offerings of asset-backed securities that are
registered under the Securities Act, the Company acknowledges that investors
in
privately offered securities may require that the Purchaser or any Depositor
provide comparable disclosure in unregistered offerings to the extent such
comparable disclosures in unregistered offerings are consistent with industry
practice. References in this Agreement to compliance with Regulation
AB include provision of comparable disclosure in private offerings.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder that
are
applicable to any Securitization Transaction
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(or
the
provision in a private offering of disclosure comparable to that required under
the Securities Act). The Company acknowledges that interpretations of
the requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus among
participants in the asset-backed securities markets, advice of counsel, or
otherwise, and agrees to comply with requests made by the Purchaser or any
Depositor in good faith regarding the Company’s delivery of information under
these provisions on the basis of evolving interpretations of Regulation
AB. In connection with any Securitization Transaction, the Company
shall cooperate fully with the Purchaser to deliver to the Purchaser (including
any of its assignees or designees) and any Depositor, any and all statements,
reports, certifications, records and any other information necessary in the
good
faith determination of the Purchaser or any Depositor to permit the Purchaser
or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Company, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser or any Depositor to be necessary in order
to effect such compliance.
Section
13.02 Additional Representations and Warranties of the
Company.
(a) The
Company shall be deemed to represent to the Purchaser and to any Depositor,
as
of the date on which information is first provided to the Purchaser or any
Depositor under Section 13.03 that, except as disclosed in writing to the
Purchaser or such Depositor prior to such date (unless otherwise previously
disclosed in information the Company has provided under
Section 13.03): (i) the Company is not aware and has
not received notice that any default, early amortization or other performance
triggering event has occurred as to any other securitization due to any act
or
failure to act of the Company; (ii) the Company has not been terminated as
servicer in a residential mortgage loan securitization, either due to a
servicing default or to application of a servicing performance test or trigger;
(iii) no material noncompliance with the applicable servicing criteria with
respect to other securitizations of residential mortgage loans involving the
Company as servicer has been disclosed or reported by the Company; (iv) no
material changes to the Company’s policies or procedures with respect to the
servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the settlement
date
of the related Securitization Transaction; (v) there are no aspects of the
Company’s financial condition that could have a material adverse effect on the
performance by the Company of its servicing obligations under this Agreement
or
any Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Company, any
Subservicer or any Third-Party Originator; and (vii) there are no affiliations,
relationships or transactions relating to the Company, any Subservicer or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in
Item 1119 of Regulation AB.
(b) If
so requested by the Purchaser or any Depositor on any date following the date
on
which information is first provided to the Purchaser or any Depositor under
Section 13.03, the Company shall use its reasonable best efforts to
within five (5) Business Days, but in no event less than ten (10) Business
Days
following such request, confirm in writing, fax or mail, the accuracy of the
representations and warranties set forth in paragraph (a) of this
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Section
or, if any such representation and warranty is not accurate as of the date
of
such request, provide reasonably adequate disclosure of the pertinent facts,
in
writing, to the requesting party.
Section
13.03 Information to Be Provided by the
Company.
In
connection with any Securitization Transaction the Company shall use its
reasonable best efforts to within five (5) Business Days, but in no event less
than ten (10) Business Days (i) following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable,
cause
each Third-Party Originator and each Subservicer to provide), in writing or
in a
mutually agreed upon electronic format and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and materials
specified in paragraphs (a), (b), (c) and (f) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Company, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) or in a mutually
agreed upon electronic format the information specified in paragraph (d) of
this Section.
(a) If
so requested by the Purchaser or any Depositor, the Company shall provide (or
cause each Third-Party Originator to provide) such information regarding (i)
the
Company, as originator of the Mortgage Loans (including as an acquirer of
Mortgage Loans from a Qualified Correspondent), or (ii) each Third-Party
Originator, and (iii) as applicable, each Subservicer, as is requested for
the
purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a
minimum:
(A) the
originator’s form of organization;
(B) a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the good faith judgment of the Purchaser
or
any Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators’ credit-granting or underwriting criteria for mortgage
loans of similar type(s) as the Mortgage Loans and such other information as
the
Purchaser or any Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a
description of any material legal or governmental proceedings pending (or known
to be contemplated) against the Company or, to the knowledge of the Seller
after
reasonable due diligence, each Third-Party Originator and each Subservicer;
and
(D) a
description of any affiliation or relationship between the Company, each
Third-Party Originator, each Subservicer and any of the following parties to
a
Securitization Transaction, as such parties are identified to the
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Company
by the Purchaser or any Depositor in writing in advance of such Securitization
Transaction:
(1) the
sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9) any
other material transaction party.
(b) If
so requested by the Purchaser or any Depositor, the Company shall provide (or,
as applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Company, if the Company is an originator of Mortgage
Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information
shall be prepared in form and substance reasonably satisfactory to the
Purchaser, by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to
the Company (or Third-Party Originator) Static Pool Information with respect
to
more than one mortgage loan type, the Purchaser or any Depositor shall be
entitled to specify whether some or all of such information shall be provided
pursuant to this paragraph. The content of such Static Pool
Information may be in the form customarily provided by the Company, and need
not
be customized for the Purchaser or any Depositor. Such Static Pool
Information for each vintage origination year or prior securitized pool, as
applicable, shall be presented in increments no less frequently than quarterly
over the life of the mortgage loans included in the vintage origination year
or
prior securitized pool. The most recent periodic increment must be as
of a date no later than 135 days prior to the date of the prospectus or other
offering document in which the Static Pool Information is to be included or
incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format mutually agreed upon by the Purchaser or the Depositor
and the Company, as applicable.
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an omission
to include therein information required to be provided pursuant to such
paragraph), the Company
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shall
provide corrected Static Pool Information to the Purchaser or any Depositor,
as
applicable, in the same format in which Static Pool Information was previously
provided to such party by the Company.
If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
Purchaser or Depositor (to the extent of any additional incremental expense
associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to
the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to
the
Company’s or Third-Party Originator’s originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the
benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any Sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction, and shall also be addressed to and for the
benefit of the Company and such Third-Party Originator. Any such
statement or letter may take the form of a standard, generally applicable
document accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(c) If
so requested by the Purchaser or any Depositor, the Company shall provide such
information regarding the Company, as servicer of the Mortgage Loans, and cause
each Subservicer to so provide such information (each of the Company and each
Subservicer, for purposes of this Section 13.03(c), a
“Servicer”), as is requested for the purpose of compliance with Item
1108
of Regulation AB. Such information shall include, at a
minimum:
(A) the
Servicer’s form of organization;
(B) a
description of how long the Servicer has been servicing residential mortgage
loans; a general discussion of the Servicer’s experience in servicing assets of
any type as well as a more detailed discussion of the Servicer’s experience in,
and procedures for, the servicing function it will perform under this Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer’s portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the Servicer
that may be material, in the good faith judgment of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without
limitation:
(1) whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing during the three-year
period immediately preceding the settlement date of the related Securitization
Transaction;
(2) the
extent of outsourcing the Servicer utilizes;
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(3) whether
there has been previous disclosure of material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential mortgage
loans involving the Servicer as a servicer during the three-year period
immediately preceding the settlement date of the related Securitization
Transaction;
(4) whether
the Servicer has been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; and
(5) such
other information as the Purchaser or any Depositor may reasonably request
for
the purpose of compliance with Item 1108(b)(2) of Regulation AB;
(C) a
description of any material changes during the three-year period immediately
preceding the settlement date of the related Securitization Transaction to
the
Servicer’s policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreements for mortgage
loans of a type similar to the Mortgage Loans;
(D) information
regarding the Servicer’s financial condition, to the extent that there is a
material risk that an adverse financial event or circumstance involving the
Servicer could have a material adverse effect on the performance by the Company
of its servicing obligations under this Agreement or any Reconstitution
Agreement;
(E) information
regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s
overall servicing portfolio of residential mortgage loans for the three-year
period immediately preceding the settlement date of the related Securitization
Transaction, which may be limited to a statement by an authorized officer of
the
Servicer to the effect that the Servicer has made all advances required to
be
made on residential mortgage loans serviced by it during such period, or, if
such statement would not be accurate, information regarding the percentage
and
type of advances not made as required, and the reasons for such failure to
advance;
(F) a
description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type as
the
Mortgage Loans;
(G) a
description of the Servicer’s processes for handling delinquencies, losses,
bankruptcies and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts;
(H) information
as to how the Servicer defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging, restructuring, partial
payments considered current or other practices with respect to delinquency
and
loss experience; and
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(I) notwithstanding
any other provision of this Agreement, with respect to any information required
to be provided by a Servicer pursuant to this Section 13.03(c) as of
the settlement date of the related Securitization Transaction, in the event
the
settlement date of the related Securitization Transaction is modified after
the
date on which such Servicer provided all of the information required by this
Section 13.03(c), each such Servicer shall be given, prior to the
modified settlement date of the related Securitization Transaction, notice
and
an opportunity to review and update the information previously provided by
such
Servicer.
(d) If
so requested by the Purchaser or any Depositor for the purpose of satisfying
its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Company shall upon discovery (or shall cause each
Subservicer and Third-Party Originator to so notify upon discovery) (i) notify
the Purchaser and any Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Company, any Subservicer or any
Third-Party Originator, as applicable, and (B) any affiliations or relationships
that develop following the closing date of a Securitization Transaction between
the Company, any Subservicer or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and any other
parties identified in writing by the requesting party) with respect to such
Securitization Transaction, and (ii) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.
(e) As
a condition to the succession to the Company or any Subservicer as servicer
or
subservicer under this Agreement or any Reconstitution Agreement by any Person
(i) into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Company
or
any Subservicer, the Company shall provide to the Purchaser and any Depositor,
at least 15 calendar days prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to any class
of asset-backed securities of the related Securitization
Transaction.
(f) In
addition to such information as the Company, as servicer, is obligated to
provide pursuant to other provisions of this Agreement, if so requested by
the
Purchaser or any Depositor, the Company shall provide such information regarding
the performance or servicing of the Mortgage Loans as is reasonably required
by
the Purchaser or any Depositor to facilitate preparation of distribution reports
in accordance with Item 1121 of Regulation AB and to permit the Purchaser or
such Depositor to comply with the provisions of Regulation AB relating to Static
Pool Information regarding the performance of the Mortgage Loans on the basis
of
the Purchaser's or such Depositor's reasonable, good faith interpretation of
the
requirements of Item 1105(a)(1)-(3) of Regulation AB (including without
limitation as to the format and content of such Static Pool Information) in
connection with any future securitization by the Purchaser or any Depositor
of
mortgage loans of a similar type as the Mortgage
Loans. Such information shall be provided concurrently with the
monthly reports otherwise required to be delivered by the Servicer under this
Agreement commencing with the first such report due in connection with the
applicable Securitization Transaction.
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Section
13.04 Servicer Compliance Statement.
On
or
before March 1 of each calendar year, commencing in 2007, the Company shall
deliver to the Purchaser and any Depositor a statement of compliance addressed
to the Purchaser and such Depositor and signed by an authorized officer of
the
Company, to the effect that (i) a review of the Company’s activities as Servicer
during the immediately preceding calendar year (or applicable portion thereof)
and of its performance under this Agreement and any applicable Reconstitution
Agreement during such period has been made under such officer’s supervision, and
(ii) to the best of such officers’ knowledge, based on such review, the Company
has fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status
thereof.
Section
13.05 Report on Assessment of Compliance and
Attestation.
(a) On
or before March 1 of each calendar year, commencing in 2007, the Company
shall:
(i) deliver
to the Purchaser and any Depositor a report (in form and substance reasonably
satisfactory to the Purchaser and such Depositor) regarding the Company’s
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Purchaser and such Depositor and signed by an authorized
officer of the Company, and shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit N
hereto delivered to the Purchaser concurrently with the execution of this
Agreement;
(ii) deliver
to the Purchaser and any Depositor a report of a registered public accounting
firm reasonably acceptable to the Purchaser and such Depositor that attests
to,
and reports on, the assessment of compliance made by the Company and delivered
pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act;
(iii) cause
each Subservicer, and each Subcontractor determined by the Company pursuant
to
Section 13.06(b) to be “participating in the servicing function” within
the meaning of Item 1122 of Regulation AB, to deliver to the Purchaser and
any
Depositor an assessment of compliance and accountants’ attestation as and when
provided in paragraphs (a) and (b) of this Section; and
(iv) deliver
to the Purchaser, any Depositor and any other Person that will be responsible
for signing the certification (a “Sarbanes Certification”) required by
Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302
of
the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed issuer with respect
to a Securitization Transaction a certification in the form attached hereto
as
Exhibit M; provided that such certification delivered by the Company may
not be filed as an exhibit to, or included in, any offering document or
registration statement.
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The
Company acknowledges that the parties identified in clause (a)(iv) above may
rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the
Commission. Neither the Purchaser nor any Depositor will request
delivery of a certification under clause (a)(iv) above, unless a Depositor
is
required under the Exchange Act to file an annual report on Form 10-K with
respect to an issuing entity whose asset pool includes Mortgage
Loans.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section
13.05(a)(i) shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit N hereto delivered to
the Purchaser concurrently with the execution of this Agreement or, in the
case
of a Subservicer subsequently appointed as such, on or prior to the date of
such
appointment. An assessment of compliance provided by a Subcontractor
pursuant to Section 13.05(a)(iii) need not address any elements of the
Servicing Criteria other than those specified by the Company pursuant to
Section 13.06.
Section
13.06 Use of Subservicers and
Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (a) of this Section. The Company shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor,
to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (b) of this Section.
(a) The
Company shall not hire or otherwise utilize the services of any Subservicer
with
respect to the Mortgage Loans without giving the Purchaser or its designee
fifteen (15) calendar days’ advance written notice of the effective date of such
hiring or utilization of a Subservicer, followed by written confirmation of
such
hiring or utilization of a Subservicer on the effective date of such engagement
and indicating the circumstances surrounding such hiring or
utilization. Any notices required by this Section 13.06(a)
shall be sent via telecopier or certified or registered mail to the addresses
set forth below: Xxxx X. Xxxxxxxx, Servicer Oversight Group, 0000 X-Xxx Xxxxxx,
Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000, Telecopy: 000-000-0000, and emailed to:
xxxxx_xxxxxxxx_xxxxxx@xxxxxxxxxxxxx.xxx, with a copy to Xxxxxxx Xxxxxx,
Cadwalader, Xxxxxxxxxx & Xxxx, LLP, Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Telecopy: 000-000-0000, Email: xxxxxxx.xxxxxx@xxx.xxx (or
such
other address as such Person may otherwise specify to Company). The
Company shall cause any Subservicer used by the Company (or by any Subservicer)
for the benefit of the Purchaser and any Depositor to comply with the provisions
of this Section and with Sections 13.02, 13.03(c) and (e),
13.04, 13.05 and 13.07 of this Agreement to the same
extent
as if such Subservicer were the Company, and to provide the information required
with respect to such Subservicer under Section 13.03(d) of this
Agreement. The Company shall be responsible for obtaining from each
Subservicer and delivering to the Purchaser and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under
Section 13.04, any assessment of compliance and attestation required to
be delivered by such Subservicer under Section 13.05 and any
certification required to be delivered
-86-
to
the Person that will be responsible for signing the Sarbanes
Certification under Section 13.05 as and when required to be
delivered.
(b) It
shall not be necessary for the Company to seek the consent of the Purchaser
or
any Depositor to the utilization of any Subcontractor. The Company
shall promptly upon request provide to the Purchaser and any Depositor (or
any
designee of the Depositor, such as a master servicer or administrator) a written
description (in form and substance satisfactory to the Purchaser and such
Depositor) of the role and function of each Subcontractor utilized by the
Company or any Subservicer, specifying (i) the identity of each such
Subcontractor, (ii) which (if any) of such Subcontractors are “participating in
the servicing function” within the meaning of Item 1122 of Regulation AB, and
(iii) which elements of the Servicing Criteria will be addressed in assessments
of compliance provided by each Subcontractor identified pursuant to clause
(ii)
of this paragraph.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 13.05 and
13.07 of this Agreement to the same extent as if such Subcontractor
were
the Company. The Company shall be responsible for obtaining from each
Subcontractor and delivering to the Purchaser and any Depositor any assessment
of compliance and attestation required to be delivered by such Subcontractor
under Section 13.05, in each case as and when required to be
delivered.
Section
13.07 Indemnification; Remedies.
(a) The
Company shall indemnify the Purchaser, each affiliate of the Purchaser, the
Depositor and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible
for the preparation, execution or filing of any report required to be filed
with
the Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction; each broker dealer
acting as underwriter, placement agent or initial purchaser, each Person who
controls any of such parties or the Depositor (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees and agents of
each
of the foregoing and of the Depositor, and shall hold each of them harmless
from
and against any losses, damages, penalties, fines, forfeitures, legal fees
and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(1)(A)
an any untrue statement of a material fact contained or alleged to be contained
in any information, report, certification, accountants’ letter or other material
provided in written or electronic form under this Article 13 by or on
behalf of the Company, or provided under this Article 13 by or on behalf
of any Subservicer, Subcontractor or Third-Party Originator (collectively,
the
“Company Information”), or (B) the omission or alleged omission to state
in the Company Information a material fact required to be stated in the Company
Information or necessary in order to make the
-87-
statements
therein, in light of the circumstances under which they were made, not
misleading; provided, by way of clarification, that clause (B) of this paragraph
shall be construed solely by reference to the Company Information and not to
any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Company Information or any portion
thereof is presented together with or separately from such other
information;
(ii) any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Article 13,
including any failure by the Company to identify pursuant to Section
13.06(b) any Subcontractor “participating in the servicing function” within
the meaning of Item 1122 of Regulation AB; or
(iii) any
breach by the Company of a representation or warranty set forth in Section
13.02(a) or in a writing furnished pursuant to Section 13.02(b) and
made as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Company of a representation or warranty in a writing
furnished pursuant to Section 13.02(b) to the extent made as of a date
subsequent to such closing date.
In
the
case of any failure of performance described in clause (a)(ii) of this Section,
the Company shall promptly reimburse the Purchaser, any Depositor, as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Subcontractor or any Third-Party Originator.
(b) (i) Any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Article 13, or
any breach by the Company of a representation or warranty set forth in
Section 13.02(a) or in a writing furnished pursuant to Section
13.02(b) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by
such
closing date, or any breach by the Company of a representation or warranty
in a
writing furnished pursuant to Section 13.02(b) to the extent made as of a
date subsequent to such closing date, shall, except as provided in clause (ii)
of this paragraph, immediately and automatically, constitute an Event of Default
with respect to the Company under this Agreement and any applicable
Reconstitution Agreement, if such failure or breach is not cured within three
(3) Business Days after the Company receives written notice of such breach
(which may be provided by e-mail) and shall entitle the Purchaser, any Master
Servicer or Depositor, as applicable, in its sole discretion to terminate the
rights and obligations of the Company as servicer under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution Agreement to the
contrary) of any compensation to the Company (except to the extent provided
in
Section 13.07(b)(iv)); provided that to the extent that any
provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides
-88-
for
the
survival of certain rights or obligations following termination of the Company
as servicer, such provision shall be given effect.
(ii) Any
failure by the Company, any Subservicer or any Subcontractor to deliver any
information, report, certification or accountants’ letter when and as required
under Section 13.04 or 13.05, including (except as provided below)
any failure by the Company to identify pursuant to Section 13.06(b) any
Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, which continues unremedied for ten calendar days
after the date on which such information, report, certification or accountants’
letter was required to be delivered shall constitute an Event of Default with
respect to the Company under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Purchaser, any Master Servicer, or Depositor,
as applicable, in its sole discretion to terminate the rights and obligations
of
the Company as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Company (except to the
extent provided in Section 13.07(b)(iv)); provided that to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
(iii) The
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser, such as a master servicer) and any Depositor, as applicable, for
all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to
a
successor servicer. The provisions of this paragraph shall not limit
whatever rights the Purchaser or any Depositor may have under other provisions
of this Agreement and/or any applicable Reconstitution Agreement or otherwise,
whether in equity or at law, such as an action for damages, specific performance
or injunctive relief.
(iv) In
the event the Company is terminated pursuant to this Section 13.07,
the Purchaser hereby agrees to pay the Company any accrued and outstanding
servicing fees owing to the Company to the date of such termination and to
cause
the successor servicer to agree to reimburse the Company for any Servicing
Advances that the Company actually made as servicer pursuant to this Agreement
which such successor servicer recovers from the related Mortgagor.
(c) (i) Promptly
after receipt by any indemnified party under this Section 13.07 of
notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 13.07, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 13.07 except to the
extent it has been materially prejudiced by such failure; and provided, further,
however, that the failure to notify any indemnifying party shall not relieve
it
from any liability which it may have to any indemnified party otherwise than
under this Section 13.07.
-89-
(ii) If
any such claim or action shall be brought against an indemnified party, and
it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election
to
assume the defense of such claim or action, except as provided in the following
paragraph, the indemnifying party shall not be liable to the indemnified party
under this Section 13.07 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(iii) Any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses
of
such counsel shall be at the expense of such indemnified party
unless: (A) the employment thereof has been specifically
authorized by the indemnifying party in writing; (B) such indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel it is necessary or appropriate for such indemnified party to employ
separate counsel; or (C) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at
the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations
or
circumstances, be liable for the reasonable fees and expenses of more than
one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties.
(iv) Each
indemnified party, as a condition of the indemnity agreements contained in
this
Section 13.07, shall cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled
with
its written consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(v) Notwithstanding
anything to the contrary contained in this Agreement, if at any time an
indemnified party shall have requested the Company to reimburse the indemnified
party for reasonable fees and expenses of counsel, and the Company shall have
failed to reimburse the indemnified party for such fees and expenses for a
period of 60 days after receipt of such request, the indemnified party shall
have the right to notify the Company that it is terminating the Company as
servicer under this Agreement without cause and without payment of any
termination fee. If the Company thereafter fails to fully reimburse
the indemnified party for such fees and expenses within 15 days
-90-
after
receipt of such notice, the Company shall be automatically terminated as
servicer under this Agreement, it being understood that no termination of the
Company as servicer under this Agreement shall effect the Company’s
indemnification obligations under this Agreement, which shall survive any such
termination.
(d) Except
for remedies under this Agreement and remedies that cannot be waived as a matter
of law and injunctive relief, the rights under this Article 13 shall
be the exclusive remedy for breaches of this Article 13 (including
any covenant, obligation, representation or warranty contained herein or
therein).
(e) Notwithstanding
anything in this Agreement to the contrary, in no event shall the Company be
obligated under this Article 13 to indemnify a Person otherwise
entitled to indemnity hereunder in respect of any indemnifiable claims or losses
that result directly from the willful misconduct, bad faith or grossly negligent
acts or omissions of such indemnified party.
[Signature
Page Follows]
-91-
IN
WITNESS WHEREOF, the Company and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
day and year first above written.
|
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
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By:
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||
| Name | |||
| Title | |||
On
the __
day of ________, 2006 before me, a Notary Public in and for said State,
personally appeared ________, known to me to be ______________________________
of Xxxxxx Xxxxxxx Mortgage Capital Inc., the corporation that executed the
within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
|
|
Notary
Public
|
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My
Commission expires
|
-0-
| XXXXX XX XXX XXXX | ) | |
| ) | ss.: | |
| COUNTY OF NEW OHIO | ) |
On
the __
day of _______, 2006 before me, a Notary Public in and for said State,
personally appeared __________, known to me to be ______________ of National
City Mortgage Co., the corporation that executed the within instrument and
also
known to me to be the person who executed it on behalf of said corporation,
and
acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
|
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Notary
Public
|
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My
Commission expires
|
-3-
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
A-1
EXHIBIT
B
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
any prospective Purchaser, and which shall be retained by the Company in the
Servicing File or delivered to the Custodian pursuant to
Section 2.01 and 2.03 of the Fourth Amended and Restated
Master Seller’s Warranties and Servicing Agreement to which this Exhibit is
attached (the “Agreement”):
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|
1.
|
The
original Mortgage Note bearing all intervening endorsements, endorsed
“Pay
to the order of _________ without recourse” and signed via original
signature in the name of the Company by an authorized officer (in
the
event that the Mortgage Loan was acquired by the Company in a merger,
the
signature must be in the following form: “National City Mortgage Co.,
successor by merger to [name of predecessor]”; and in the event that the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the signature must be in the following
form:
“National City Mortgage Co., formerly known as [previous
name]”).
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2.
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The
original of any guarantee executed in connection with the Mortgage
Note
(if any).
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3.
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The
original Mortgage, with evidence of recording thereon. If in
connection with any Mortgage Loan, the Company cannot deliver or
cause to
be delivered the original Mortgage with evidence of recording thereon
on
or prior to the related Closing Date because of a delay caused by
the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such
public
recording office retains the original recorded Mortgage, the Company
shall
deliver or cause to be delivered to the Custodian, a photocopy of
such
Mortgage, together with (i) in the case of a delay caused by the
public recording office, an Officer’s Certificate of the Company stating
that such Mortgage has been dispatched to the appropriate public
recording
office for recordation and that the original recorded Mortgage or
a copy
of such Mortgage certified by such public recording office to be
a true
and complete copy of the original recorded Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Company; or
(ii) in the case of a Mortgage where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage
is
lost after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office or by the title
insurance company that issued the title policy to be a true and complete
copy of the original recorded
Mortgage.
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4.
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The
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording
thereon.
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B-1
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5.
|
Unless
the Mortgage Loan is a MERS Mortgage Loan, the original Assignment
of
Mortgage for each Mortgage Loan, in form and substance acceptable
for
recording, delivered in blank. If the Mortgage Loan was
acquired by the Company in a merger, the Assignment of Mortgage must
be
made by “National City Mortgage Co., successor by merger to [name of
predecessor].” If the Mortgage Loan was acquired or originated
by the Company while doing business under another name, the Assignment
of
Mortgage must be by “National City Mortgage Co., formerly known as
[previous name].”
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6.
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Originals
of all intervening assignments of the Mortgage with evidence of recording
thereon, or if any such intervening assignment has not been returned
from
the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of mortgage,
the Company shall deliver or cause to be delivered to the Custodian,
a
photocopy of such intervening assignment, together with (i) in the
case of a delay caused by the public recording office, an Officer’s
Certificate of the Company stating that such intervening assignment
of
mortgage has been dispatched to the appropriate public recording
office
for recordation and that such original recorded intervening assignment
of
mortgage or a copy of such intervening assignment of mortgage certified
by
the appropriate public recording office or by the title insurance
company
that issued the title policy to be a true and complete copy of the
original recorded intervening assignment of mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Company; or
(ii) in the case of an intervening assignment where a public
recording office retains the original recorded intervening assignment
or
in the case where an intervening assignment is lost after recordation
in a
public recording office, a copy of such intervening assignment certified
by such public recording office to be a true and complete copy of
the
original recorded intervening
assignment.
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7.
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The
original PMI Policy, LPMI Policy or certificate of insurance, where
required pursuant to the Agreement or any other evidence of FHA insurance
coverage or VA guaranty, as the case may be, that is acceptable to
the
Purchaser.
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8.
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The
original mortgagee policy of title insurance or attorney’s opinion of
title and abstract of title.
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9.
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Any
security agreement, chattel mortgage or equivalent executed in connection
with the Mortgage.
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10.
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The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the
Agreement.
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11.
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Residential
loan application.
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12.
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Mortgage
Loan closing statement.
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13.
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Verification
of employment and income.
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B-2
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14.
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Verification
of acceptable evidence of source and amount of
downpayment.
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15.
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Credit
report on the Mortgagor.
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16.
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Residential
appraisal report.
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17.
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Photograph
of the Mortgaged Property.
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18.
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Survey
of the Mortgaged Property.
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19.
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Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy, i.e.,
map or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
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20.
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All
required disclosure statements.
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21.
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If
available, termite report, structural engineer’s report, water portability
and septic certification.
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22.
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Sales
contract.
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23.
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Tax
receipts, insurance premium receipts, ledger sheets, payment history
from
date of origination, insurance claim files, correspondence, current
and
historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in
a
mortgage loan file and which are required to document the Mortgage
Loan or
to service the Mortgage Loan.
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24.
|
The
original recorded power of attorney, if the Mortgage was executed
pursuant
to a power of attorney, with evidence of recording
thereon;
|
In
the
event an Officer’s Certificate of the Company is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Company shall deliver to the Custodian, within
60 days of the related Closing Date, an Officer’s Certificate which shall
(i) identify the recorded document, (ii) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused
by
the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable
recorded document will be delivered to the Custodian. The Company
shall be required to deliver to the Custodian the applicable recorded document
by the date specified in (iv) above. An extension of the date
specified in (iv) above may be requested from the Purchaser, which consent
shall not be unreasonably withheld.
B-3
EXHIBIT
C
MORTGAGE
LOAN DOCUMENTS
The
Mortgage Loan Documents for each Mortgage Loan shall include each of the
following items, which shall be delivered to the Custodian pursuant to
Section 2.01 of the Fourth Amended and Restated Master Seller’s
Warranties and Servicing Agreement to which this Exhibit is annexed (the
“Agreement”):
(a) the
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of ___________, without recourse” and signed via original signature in
the name of the Company by an authorized officer. To the extent that
there is no room on the face of the Mortgage Note for endorsements, the
endorsement may be contained on an allonge, if state law so
allows. If the Mortgage Loan was acquired by the Company in a merger,
the endorsement must be by “National City Mortgage Co., successor by merger to
[name of predecessor].” If the Mortgage Loan was acquired or
originated by the Company while doing business under another name, the
endorsement must be by “National City Mortgage Co., formerly known as [previous
name]”;
(b) the
original of any guarantee executed in connection with the Mortgage
Note;
(c) the
original Mortgage with evidence of recording thereon, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of attorney,
with evidence of recording thereon;
(d) the
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon;
(e) the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording, delivered in blank. If the Mortgage Loan
was acquired by the Company in a merger, the Assignment of Mortgage must be
made
by “National City Mortgage Co., successor by merger to [name of
predecessor].” If the Mortgage Loan was acquired or originated by the
Company while doing business under another name, the Assignment of Mortgage
must
be by “National City Mortgage Co., formerly known as [previous
name];”
(f) the
originals of all intervening assignments of mortgage with evidence of recording
thereon, including warehousing assignments, if any;
(g) the
original PMI or LPMI Policy or certificate, if private mortgage guaranty
insurance is required pursuant to the Agreement;
(h) the
original mortgagee title insurance policy;
(i) the
original of any security agreement, chattel mortgage or equivalent executed
in
connection with the Mortgage;
C-1
(j) the
Loan Guaranty Certificate issued by the VA as a guarantee that the federal
government will repay to the lender a specified percentage of the loan balance
in the event of the borrower’s default, as applicable;
(k) the
Mortgage Insurance Certificate issued by HUD/FHA as evidence that a mortgage
has
been insured and that a contract of mortgage insurance exists between HUD/FHA
and the lender, as applicable; and
(l) such
other documents as the Purchaser may require.
X-0
XXXXXXX
X-0
CUSTODIAL
ACCOUNT CERTIFICATION
_____________________,
200_
National
City Mortgage Co. hereby certifies that it has established the account described
below as a Custodial Account pursuant to Section 4.04 of the Fourth
Amended and Restated Master Seller’s Warranties and Servicing Agreement, dated
as of July 1, 2006, Conventional Residential Mortgage Loans.
|
Title of
Account:
|
National
City Mortgage Co. in trust for the Purchaser
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|
Account
Number:
|
_______________
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|
Address
of office or branch of the Company at
|
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|
which
Account is maintained:
|
________________________________________________
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________________________________________________
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________________________________________________
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NATIONAL
CITY MORTGAGE CO.
Company
|
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| By: | ||
|
Name:
|
||
|
Title:
|
||
X-0-0
XXXXXXX
X-0
CUSTODIAL
ACCOUNT LETTER AGREEMENT
_________________,
200_
|
To:
|
__________________________________ |
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|
__________________________________ |
|
|
__________________________________
(the
“Depository”)
|
As
Company under the Fourth Amended and Restated Master Seller’s Warranties and
Servicing Agreement, dated as of ________________________, Conventional
Residential Mortgage Loans (the “Agreement”), we hereby authorize and
request you to establish an account, as a Custodial Account pursuant to
Section 4.04 of the Agreement, to be designated as “National City
Mortgage Co., as Servicer, in trust for Xxxxxx Xxxxxxx Mortgage
Capital Inc. and/or subsequent Purchasers of fixed and adjustable rate
Mortgage Loans.” All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Company. You may refuse
any deposit which would result in violation of the requirement that the account
be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to
us.
|
NATIONAL
CITY MORTGAGE CO.
Company
|
||
| By: | ||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
||
D-2-1
The
undersigned, as Depository, hereby certifies that the above described account
has been established under Account Number __________, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account
will be insured by the Federal Deposit Insurance Corporation through the Bank
Insurance Fund (“BIF”) or the Savings Association Insurance Fund
(“SAIF”).
Depository
| By: | ||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
D-2-2
EXHIBIT
E-1
ESCROW
ACCOUNT CERTIFICATION
__________________,
200_
National
City Mortgage Co. hereby certifies that it has established the account described
below as an Escrow Account pursuant to Section 4.06 of the Fourth
Amended and Restated Master Seller’s Warranties and Servicing Agreement, dated
as of July 1, 2006, Conventional Residential Mortgage Loans.
|
Title of
Account:
|
“National
City Mortgage Co. in trust for the Purchaser and various
Mortgagors”
|
|
Account
Number:
|
_______________
|
|
Address
of office or branch of the Company at
|
|
|
which
Account is maintained:
|
________________________________________________
|
|
________________________________________________
|
|
|
________________________________________________
|
|
NATIONAL
CITY MORTGAGE CO.
Company
|
||
| By: | ||
|
Name:
|
||
|
Title:
|
||
E-1-1
EXHIBIT
E-2
ESCROW
ACCOUNT LETTER AGREEMENT
___________________,
200_
|
To:
|
__________________________________ |
|
|
__________________________________ |
|
|
__________________________________
(the
“Depository”)
|
As
Company under the Fourth Amended and Restated Master Seller’s Warranties and
Servicing Agreement, dated as of July 1, 2006, Conventional Residential
Rate Mortgage Loans (the “Agreement”), we hereby authorize and request
you to establish an account, as an Escrow Account pursuant to
Section 4.07 of the Agreement, to be designated as “National City
Mortgage Co., as Servicer, in trust for Xxxxxx Xxxxxxx Mortgage
Capital Inc. and/or subsequent Purchasers of fixed and adjustable rate
Mortgage Loans.” All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Company. You may refuse
any deposit which would result in violation of the requirement that the account
be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to
us.
|
NATIONAL
CITY MORTGAGE CO.
Company
|
||
| By: | ||
|
Name:
|
||
|
Title:
|
||
The
undersigned, as Depository, hereby certifies that the above described account
has been established under Account Number ______, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account
will be insured by the Federal Deposit Insurance Corporation through the
Bank
Insurance Fund (“BIF”) or the Savings Association Insurance Fund
(“SAIF”).
|
Depository
|
||
| By: | ||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
||
E-2-1
EXHIBIT
F
[RESERVED]
F-1
EXHIBIT
G
PROCESS
GUIDELINES
|
I.
|
Contract
|
The
Purchaser must provide the Company with an Assignment & Assumption
Agreement or similar notice with respect to a transfer to Xxxxxx Mae no less
than five (5) Business Days prior to the last Business Day of the month of
transfer. Such document will confirm that the Mortgage
Loans will be serviced in accordance with the Xxxxxx Xxx Servicing
Guide. Such document must also confirm that Mortgage Loans were sold
to Xxxxxx Mae under the special servicing option.
|
II.
|
Requirements
for FNMA sales
|
|
|
A.
|
The
Servicing Fee less the Xxxxxx Xxx guaranty fee ( the “Net Servicing
Fee”) under the Xxxxxx Mae sale must be equal to or greater than
the
current Servicing Fee being paid to the Company by the
Purchaser. Should the Net Servicing Fee exceed the current
Servicing Fee, any excess will be retained by the
Company.
|
|
|
B.
|
Preparation
and recording of any Assignments of Mortgage with respect to the
Mortgage
Loans, other than as required by the underlying Company’s Warranties and
Servicing Agreement, will be the responsibility of the
Purchaser.
|
|
|
C.
|
Information
required to transfer the loans into Xxxxxx Xxx must be received no
less
than five (5) Business Days prior to the last Business Day of the
transaction month.
|
|
|
D.
|
Information
to transfer the loans must be in an Excel file format with the following
data fields:
|
|
|
(i)
|
servicer
number; (ii) National City loan number; (iii) balance sold to
Xxxxxx Mae; (iv) Pass-through rate; (v) interest rate;
(vi) interest rate net of the servicing fee rate and guarantee fee
rate; (vii) Xxxxxx Xxx loan number; (viii) contract or pool
number; (ix) if the transaction is an “actual/actual” sale - contract
number; and (x) if the transaction is an “actual/actual” sale - date
of first payment to Xxxxxx Mae.
|
|
|
E.
|
Balances
must be verified with the Company before the Mortgage Loan(s) are
sold to
Xxxxxx Xxx.
|
|
|
F.
|
The
servicer number used to deliver the Mortgage Loan(s) to Xxxxxx Mae
must be
approved by the Company before the Mortgage Loan(s) are
sold. The Company
|
G-1
|
|
|
will
assess a $500 correction penalty for each pool sold under a different
seller/servicer number than what was
provided.
|
|
|
G.
|
Final
purchase advices and/or the 2006 forms must be received by the Company
prior to the last Business Day of the transaction
month.
|
|
|
H.
|
Purchaser
must provide name and contact information of individual authorized
to
discuss the sale terms. Investor name and broker names need to
be provided to the Company.
|
III. Fees
Should
the Purchaser sell loans to Xxxxxx Xxx or Xxxxxxx Mac (standard, not REMIC)
an
additional setup fee may be charged. The Company will establish one
investor number on each of the Company’s related Alltel clients for the those
Mortgage Loans sold by Purchaser to Xxxxxx Xxx
|
XX.
|
Process
Guidelines
|
|
|
A.
|
Monthly
reporting to the Purchaser on the status of loans will be limited
to
existing Alltel delinquency and trial balance reports. Reports
will be as of each month-end and will be provided to the Purchaser
no
later than the twenty (20) days following the related
month-end. The Purchaser will provide contact information for
monthly reporting, repurchase funding and claim settlement
processes.
|
|
|
B.
|
For
any Mortgage Loans required to be repurchased by the Purchaser from
Xxxxxx
Mae due to mortgagor credit defaults (rather than administrative,
legal or
documentation issues), the Company will notify the Purchaser of the
total
amount due to Xxxxxx Xxx for the Mortgage Loan to be repurchased
no later
than the 3rd Business Day prior to the end of the month of
repurchase. The Purchaser will remit same amount,
plus a $100 repurchase processing fee to the Company no later than
the
last Business Day of the repurchase month. A late remittance
penalty of prime + 2% will be assessed from the date such remittance
was
due through the date such remittance was actually
made.
|
|
|
C.
|
Wiring
instructions for repurchases by the
Purchaser:
|
[ ]
Account
Number: [ ]
Account
Name: [ ]
ATTN: [ ],
Xxxxxx Mae
Telephone: [ ]
G-2
|
|
D.
|
An
additional investor number will be established for Mortgage Loans
repurchased by the Purchaser. Such investor number will be
actual/actual remittance with month-end cutoff. Reports and
remittances will be due on the tenth calendar day of each
month.
|
G-3
EXHIBIT
H
UNDERWRITING
GUIDELINES
H-1
EXHIBIT
I
COMPANY’S
OFFICER’S CERTIFICATE
I,
___________________________ hereby certify that I am the duly elected
____________________ of [COMPANY], a ___________________ (the “Company”),
and further certify, on behalf of the Company as follows:
1. Attached
hereto as Attachment I are a true and correct copy of the [Certificate of
Incorporation and by-laws] [Certificate of limited partnership and limited
partnership agreement] of the Company as are in full force and
effect.
2. On
no date on which this Officer’s Certificate is effectively delivered, no
proceedings looking toward merger, liquidation, dissolution or bankruptcy of
the
Company are pending or contemplated.
3. Each
person who, as an officer or attorney-in-fact of the Company, signed
(a) the Fourth Amended and Restated Master Seller’s Warranties and
Servicing Agreement (the “Purchase Agreement”), dated as of July 1,
2006, by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the “Purchaser”); (b) the Purchase Price and Terms Letter, with
respect to any sale of Mortgage Loans, between the Company and the Purchaser
(the “Purchase Price and Terms Letter”); and (c) any other document
delivered prior hereto or on the date of any settlement of any sale of Mortgage
Loans in connection with which this Officer’s Certificate is effectively
delivered pursuant to the Purchase Agreement and the Purchase Price and Terms
Letter was, at the respective times of such signing and delivery, and as of
the
date of any settlement of any sale of Mortgage Loans in connection with which
this Officer’s Certificate is effectively delivered, duly elected or appointed,
qualified and acting as such officer or attorney-in-fact, and the signatures
of
such persons appearing on such documents are their genuine
signatures.
4. Attached
hereto as Attachment II is a true and correct copy of the resolutions duly
adopted by the board of directors of the Company on ____________, 200_ (the
“Resolutions”) with respect to the authorization and approval of the sale
and servicing of the Mortgage Loans; said Resolutions have not been amended,
modified, annulled or revoked and are in full force and effect on the date
hereof.
5. Attached
hereto as Attachment III is a Certificate of Good Standing of the Company dated
________, 20[ ]. No event has occurred since ____________,
20[ ] which has affected the good standing of the Company under the
laws of the State of ____________.
6. All
of the representations and warranties of the Company contained in
Section 3.01 and 3.02 of the Purchase Agreement were true and
correct in all material respects as of the date of the Purchase Agreement and
are true and correct in all material respects as of the date of any sale of
Mortgage Loans in connection with which this Officer’s Certificate is
effectively delivered.
I-1
7. The
Company has performed all of its duties and has satisfied all the material
conditions on its part to be performed or satisfied prior to the Closing Date
pursuant to the Purchase Agreement and the related Purchase Price and Terms
Letter.
All
capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Purchase Agreement.
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
Dated:
[Seal]
|
[COMPANY]
(Company)
|
|||
|
|
By:
|
||
| Name ____________________________________________ | |||
| Title _____________________________________________ | |||
I,
__________________, Secretary of the Company, hereby certify that
__________________ is the duly elected, qualified and acting Vice President
of
the Company and that the signature appearing above is his genuine
signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
|
|
Dated:
|
[Seal]
|
[COMPANY]
(Company)
|
|||
|
|
By:
|
||
| Name ____________________________________________ | |||
| Title _____________________________________________ | |||
I-2
EXHIBIT
J
[FORM
OF
OPINION OF COUNSEL TO THE COMPANY]
(Date)
[PURCHASER]
|
|
Re:
|
Fourth
Amended and Restated Master Seller’s Warranties and Servicing Agreement,
dated as of July 1 , 2006
|
Gentlemen:
I
have
acted as counsel to [COMPANY], a _______________ (the “Company”), in
connection with the sale of certain loans by the Company to
_____________________ (the “Purchaser”) pursuant to (i) a Fourth
Amended and Restated Master Seller’s Warranties and Servicing Agreement, dated
as of July 1, 2006, between the Company and the Purchaser, as the same my be
amended from time to time (the “Purchase Agreement”) and each Purchase
Price and Terms Letter, executed by the parties in connection with a sale of
loans between the Company and the Purchaser (the “Purchase Price and Terms
Letter”)]. Capitalized terms not otherwise defined herein have
the meanings set forth in the Purchase Agreement.
In
connection with rendering this opinion letter, I, or attorneys working under
my
direction have examined, among other things, originals, certified copies or
copies otherwise identified to my satisfaction as being true copies of the
following:
A. The
Purchase Agreement;
B. The
Purchase Price and Terms Letter;
|
|
C.
|
The
Company’s [Certificate of Incorporation and by-laws] [certificate of
limited partnership and limited partnership agreement], as amended
to
date; and
|
|
|
D.
|
Resolutions
adopted by the Board of Directors of the Company with specific reference
to actions relating to the transactions covered by this opinion (the
“Board Resolutions”).
|
For
the
purpose of rendering this opinion, I have made such documentary, factual and
legal examinations as I deemed necessary under the circumstances. As
to factual matters, I have relied upon statements, certificates and other
assurances of public officials and of officers and other representatives of
the
Company, and upon such other certificates as I deemed appropriate, which factual
matters have not been independently established or verified by me. I
have also assumed, among other things, the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to me as originals, and the conformity to original documents of all
documents submitted to me as copies and the authenticity of the originals of
such copied documents.
J-1
On
the
basis of and subject to the foregoing examination, and in reliance thereon,
and
subject to the assumptions, qualifications, exceptions and limitations expressed
herein, I am of the opinion that:
1. The
Company has been duly [incorporated] [formed] and is validly existing and in
good standing under the laws of the State of Ohio with corporate power and
authority to own its properties and conduct its business as presently conducted
by it. The Company has the corporate power and authority to service
the Mortgage Loans, and to execute, deliver, and perform its obligations under
the Purchase Agreement [and the Purchase Price and Terms Letter] (sometimes
collectively, the “Agreements”).
2. The
Purchase Agreement and the Purchase Price and Terms Letter have been duly and
validly authorized, executed and delivered by the Company.
3. The
Purchase Agreement and the Purchase Price and Terms Letter constitute valid,
legal and binding obligations of the Company, enforceable against the Company
in
accordance with their respective terms.
4. No
consent, approval, authorization or order of any state or federal court or
government agency or body is required for the execution, delivery and
performance by the Company of the Purchase Agreement [and the Purchase Price
and
Terms Letter], or the consummation of the transactions contemplated by the
Purchase Agreement [and the Purchase Price and Terms Letter], except for those
consents, approvals, authorizations or orders which previously have been
obtained.
5. Neither
the servicing of the Mortgage Loans by the Company as provided in the Purchase
Agreement [and the Purchase Price and Terms Letter,] nor the fulfillment of
the
terns of or the consummation of any other transactions contemplated in the
Purchase Agreement [and the Purchase Price and Terms Letter] will result in
a
breach of any term or provision of the [certificate of incorporation or by-laws]
[certificate of limited partnership or limited partnership agreement] of the
Company, or, will conflict with, result in a breach or violation of, or
constitute a default under, (i) the terms of any indenture or other
agreement or instrument known to me to which the Company is a party or by which
it is bound, (ii) any State of Ohio or federal statute or regulation
applicable to the Company, or (iii) any order of any State of Ohio or
federal court, regulatory body, administrative agency or governmental body
having jurisdiction over the Company, except in any such case where the default,
breach or violation would not have a material adverse effect on the Company
or
its ability to perform its obligations under the Purchase
Agreement.
6. There
is no action, suit, proceeding or investigation pending or, to the best of
my
knowledge, threatened against the Company which, in my judgment, either in
any
one instance or in the aggregate, would draw into question the validity of
the
Purchase Agreement or which would be likely to impair materially the ability
of
the Company to perform under the terms of the Purchase Agreement.
J-2
7. The
sale of each Mortgage Note and Mortgage as and in the manner contemplated by
the
Purchase Agreement is sufficient fully to transfer to the Purchaser all right,
title and interest of the Company thereto as noteholder and
mortgagee.
The
opinions above are subject to the following additional assumptions, exceptions,
qualifications and limitations:
A. I
have assumed that all parties to the Agreements other than the Company have
all
requisite power and authority to execute, deliver and perform their respective
obligations under each of the Agreements, and that the Agreements have been
duly
authorized by all necessary corporate action on the part of such parties, have
been executed and delivered by such parties and constitute the legal, valid
and
binding obligations of such parties.
B. My
opinion expressed in paragraphs 3 and 7 above is subject to the qualifications
that (i) the enforceability of the Agreements may be limited by the effect
of laws relating to (1) bankruptcy, reorganization, insolvency, moratorium
or other similar laws now or hereafter in effect relating to creditors’ rights
generally, including, without limitation, the effect of statutory or ether
laws
regarding fraudulent conveyances or preferential transfers, and (2) general
principles of equity upon the specific enforceability of any of the remedies,
covenants or other provisions of the Agreements and upon the availability of
injunctive relief or other equitable remedies and the application of principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) as such principles relate to, limit or affect
the enforcement of creditors’ rights generally and the discretion of the court
before which any proceeding for such enforcement may be brought; and (ii) I
express no opinion herein with respect to the validity, legality, binding effect
or enforceability of provisions for indemnification in the Agreements to the
extent such provisions may be held to be unenforceable as contrary to public
policy.
C. I
have assumed, without independent check or certification, that there are no
agreements or understandings among the Company, the Purchaser and any other
party which would expand, modify or otherwise affect the terms of the documents
described herein or the respective rights or obligations of the parties
thereunder.
I
am
admitted to practice in the State of Ohio and I render no opinion
herein as to matters involving the laws of any jurisdiction other than the
State
of Ohio and the Federal laws of the United States of America.
|
|
Very
truly yours,
|
J-3
EXHIBIT
K
SECURITY
RELEASE CERTIFICATION
1. Release
of Security Interest
,
hereby
relinquishes any and all right, title and interest it may have in and to the
Mortgage Loans described in Exhibit A attached hereto upon purchase thereof
by [PURCHASER] from the Company named below pursuant to that certain Fourth
Amended and Restated Master Seller’s Warranties and Servicing Agreement, dated
as of July 1, 2006, as of the date and time of receipt by
_____________________ of $___________ for such Mortgage Loans (the “Date and
Time of Sale”), and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company named below or its designees as of the
Date and Time of Sale.
Name
and
Address of Financial Institution
_____________________________________
(Name)
_____________________________________
(Address)
By:
__________________________________
2. Certification
of Release
The
Company named below hereby certifies to [PURCHASER] that, as of the Date and
Time of Sale of the above mentioned Mortgage Loans to [PURCHASER], the security
interests in the Mortgage Loans released by the above named corporation comprise
all security interests relating to or affecting any and all such Mortgage
Loans. The Company warrants that, as of such time, there are and will
be no other security interests affecting any or all of such Mortgage
Loans.
K-1
| Company | |||
|
|
By:
|
||
| Name | |||
| Title | |||
K-2
EXHIBIT
L
ASSIGNMENT
AND CONVEYANCE
On
this
_____________ day of ___________, 20[ ], National City Mortgage Co.
(“Company”) as the Company under that certain Fourth Amended and Restated
Master Seller’s Warranties and Servicing Agreement, dated as of July 1,
2006 (the “Agreement”) does hereby sell, transfer, assign, set over and
convey to Xxxxxx Xxxxxxx Mortgage Capital Inc. as Purchaser under the
Agreement, without recourse, but subject to the terms of the Agreement, all
rights, title and interest of the Company in and to the Mortgage Loans listed
on
the Mortgage Loan Schedule attached hereto as Exhibit A (the
“Mortgage Loans”), together with the related Mortgage Files and all
rights and obligations arising under the documents contained
therein. Each Mortgage Loan subject to the Agreement was underwritten
in accordance with, and conforms to, the Underwriting Guidelines attached hereto
as Exhibit B. Pursuant to Section 2.04 of the
Agreement, the Company has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in the Custodial
Agreement. The contents of each related Servicing File required to be
retained by the Company to service the Mortgage Loans pursuant to the Agreement
and thus not delivered to the Purchaser are and shall be held in trust by the
Company for the benefit of the Purchaser as the owner thereof. The
Company’s possession of any portion of each such Servicing File is at the will
of the Purchaser for the sole purpose of facilitating servicing of the related
Mortgage Loan pursuant to the Agreement, and such retention and possession
by
the Company shall be in a custodial capacity only. The ownership of
each Mortgage Note, Mortgage, and the contents of the Mortgage File and
Servicing File is vested in the Purchaser and the ownership of all records
and
documents with respect to the related Mortgage Loan prepared by or which come
into the possession of the Company shall immediately vest in the Purchaser
and
shall be retained and maintained, in trust, by the Company at the will of the
Purchaser in such custodial capacity only.
The
Company confirms to the Purchaser that the representation and warranties set
forth in Sections 3.01 and 3.02 of the Agreement are true and
correct as of the date hereof, and that all statements made in the Company’s
Officer’s Certificates and all Attachments thereto remain complete, true and
correct in all respects as of the date hereof, and with respect to this Mortgage
Loan Package, the Company makes the following additional representations and
warranties to the Purchaser, which additional representations and warranties
are
hereby incorporated into Section 3.02 of the Agreement:
|
LOAN
TYPE:
|
[FIXED
RATE] [ADJUSTABLE RATE]
|
|
Number
of Mortgage Loans:
|
_________________________
|
|
Original
Principal Balance:
|
$________________________
|
|
Stated
Principal Balance:
|
$________________________
|
|
Weighted
Average Mortgage Interest Rate:
|
_____%
|
|
Weighted
Average Servicing Fee Rate:
|
_____%
|
L-1
|
Weighted
Average Mortgage Loan
|
|
|
Remittance
Rate:
|
_____%
|
|
Weighted
Average LTV:
|
_____%
|
|
Weighted
Average Remaining Months to Maturity:
|
_______
months
|
|
For
Adjustable Rate Mortgage Loans:
|
|
|
Type:
|
_______
|
|
Index:
|
_______
|
|
Weighted
Average Gross Margin:
|
_______%
|
|
Weighted
Average Months to
|
|
|
Next
Adjustment Date:
|
_______
months
|
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
|
NATIONAL CITY MORTGAGE CO.
(Company)
|
||
|
By:__________________________
Name:
Title:
|
L-2
EXHIBIT
M
FORM
OF
ANNUAL CERTIFICATION
|
|
Re:
|
The
[ ] agreement dated as of [ ], 200[ ] (the
“Agreement”), among [IDENTIFY PARTIES]
|
I,
________________________________, the _______________________ of [NAME OF
COMPANY], certify to [the Purchaser], [the Depositor], and the [Master Servicer]
[Securities Administrator] [Trustee], and their officers, with the knowledge
and
intent that they will rely upon this certification, that:
1. I
have reviewed the servicer compliance statement of the Company provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”),
the report on assessment of the Company’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing
Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item
1122 of Regulation AB (the “Servicing Assessment”), the registered public
accounting firm’s attestation report provided in accordance with Rules 13a-18
and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB
(the “Attestation Report”), and all servicing reports, officer’s
certificates and other information relating to the servicing of the Mortgage
Loans by the Company during 200[ ] that were delivered by the Company to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee] pursuant
to
the Agreement (collectively, the “Company Servicing
Information”);
2. Based
on my knowledge, the Company Servicing Information, taken as a whole, does
not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
3. Based
on my knowledge, all of the Company Servicing Information required to be
provided by the Company under the Agreement has been provided to the [Depositor]
[Master Servicer] [Securities Administrator] [Trustee];
4. I
am responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report, the
Company has fulfilled its obligations under the Agreement in all material
respects; and
M-1
5. The
Compliance Statement required to be delivered by the Company pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Company and by any Subservicer or Subcontractor pursuant to
the
Agreement, have been provided to the [Depositor] [Master
Servicer]. Any material instances of noncompliance described in such
reports have been disclosed to the [Depositor] [Master Servicer]. Any
material instance of noncompliance with the Servicing Criteria has been
disclosed in such reports.
| Date: | |||
|
|
By:
|
||
| Name | |||
| Title | |||
M-2
EXHIBIT
N
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the SELLER] [Name of Subservicer]
shall address, at a minimum, the criteria identified as below as “Applicable
Servicing Criteria”:
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
General
Servicing Considerations
|
||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
Ö
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
Ö
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
Ö
|
|
Cash
Collection and Administration
|
||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
Ö
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
Ö
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction
agreements.
|
Ö
|
N-1
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
Ö
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
Ö
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized
access.
|
Ö
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the transaction
agreements.
|
Ö
|
|
Investor
Remittances and Reporting
|
||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
|
Ö
|
N-2
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
Ö
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
Ö
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
|
Ö
|
|
Pool
Asset Administration
|
||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the
transaction
agreements or related mortgage loan documents.
|
Ö
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
Ö
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
Ö
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow)
in
accordance with the related mortgage loan documents.
|
Ö
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
|
Ö
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
Ö
|
N-3
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
Ö
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
|
Ö
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan
documents.
|
Ö
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction
agreements.
|
Ö
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
Ö
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
Ö
|
N-4
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
Ö
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
Ö
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
|
|
[NAME
OF SELLER] [NAME OF SUBSERVICER]
|
|||
| Date: | |||
|
|
By:
|
||
| Name | |||
| Title | |||
N-5
EXHIBIT
O
This
INDEMNIFICATION AND CONTRIBUTION AGREEMENT (“Agreement”), dated as of
[_______], 200_, among [________________] (the “Depositor”), a
[______________] corporation (the “Depositor”), Xxxxxx Xxxxxxx Mortgage
Capital Inc., a New York corporation (“Xxxxxx”) and [_____________],
a [_______________] (the “Seller”).
W I T N E S S E T H:
WHEREAS,
the Depositor is acting as depositor and registrant with respect to the
Prospectus, dated [________________], and the Prospectus Supplement to the
Prospectus, [________________] (the “Prospectus Supplement”), relating to
[________________] Certificates (the “Certificates”) to be issued
pursuant to a Pooling and Servicing Agreement, dated as of [________________]
(the “P&S”), among the Depositor, as depositor, [________________],
as servicer (the “Servicer”), and [________________], as trustee (the
“Trustee”);
WHEREAS,
as an inducement to the Depositor to enter into the P&S, and
[____________________] (the “Underwriter[s]”) to enter into the
Underwriting Agreement, dated [____________________] (the “Underwriting
Agreement”), between the Depositor and the Underwriter[s], and
[_______________] (the “Initial Purchaser[s]”) to enter into the
Certificate Purchase Agreement, dated [____________] (the “Certificate
Purchase Agreement”), between the Depositor and the Initial Purchaser[s],
Seller has agreed to provide for indemnification and contribution on the terms
and conditions hereinafter set forth;
WHEREAS,
Xxxxxx purchased from Seller certain of the Mortgage Loans underlying the
Certificates (the “Mortgage Loans”) pursuant to a Mortgage Loan Sale and
Servicing Agreement, dated as of [DATE] (the “Sale and Servicing
Agreement”), by and between Xxxxxx and Seller; and
WHEREAS,
pursuant to Section 15 of the Sale and Servicing Agreement, the
Seller has agreed to indemnify the Depositor, Xxxxxx, the Underwriter[s], the
Initial Purchaser[s] and their respective affiliates, present and former
directors, officers, employees and agents.
O-1
NOW
THEREFORE, in consideration of the agreements contained herein, and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Depositor, Xxxxxx and the Seller agree as
follows:
6. Indemnification
and Contribution.
(a) The
Seller agrees to indemnify and hold harmless the Depositor, Xxxxxx, the
Underwriter[s], the Initial Purchaser[s] and their respective affiliates and
their respective present and former directors, officers, employees and agents
and each person, if any, who controls the Depositor, Xxxxxx, the Underwriter[s]
, the Initial Purchaser[s] or such affiliate within the meaning of either
Section 15 of the Securities Act of 1933, as amended (the
“1933 Act”), or Section 20 of the Securities Exchange
Act of 1934, as amended (the “1934 Act”), against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or
are based in whole or in part upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus Supplement, the
Offering Circular, the ABS Informational and Computational Materials or in
the
Free Writing Prospectus or any omission or alleged omission to state in the
Prospectus Supplement, the Offering Circular, the ABS Informational and
Computational Materials or in the Free Writing Prospectus a material fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances in which they were made, not misleading, or any
such
untrue statement or omission or alleged untrue statement or alleged omission
made in any amendment of or supplement to the Prospectus Supplement, the
Offering Circular, the ABS Informational and Computational Materials or the
Free
Writing Prospectus and agrees to reimburse the Depositor, Xxxxxx, the
Underwriter[s], the Initial Purchaser[s] or such affiliates and each such
officer, director, employee, agent and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that Seller shall be liable in any such
case only to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any breach of the representation and
warranty set forth in Section 2(vii) below or (ii) any untrue statement
or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with the Seller Information. The foregoing
indemnity agreement is in addition to any liability which Seller may otherwise
have to the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s]
their affiliates or any such director, officer, employee, agent or controlling
person of the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s]
or
their respective affiliates.
As
used
herein:
“Seller
Information” means any information relating to Seller, the Mortgage Loans
and/or the underwriting guidelines relating to the Mortgage Loans set forth
in
the Prospectus Supplement, the Offering Circular, the ABS Informational and
Computational Materials or the Free Writing Prospectus [and static pool
information regarding mortgage loans originated or acquired by the Seller [and
included in the Prospectus Supplement, the Offering Circular, the ABS
Informational and Computational Materials or the Free Writing Prospectus]
[incorporated by reference from the website located at
______________].
O-2
“Free
Writing Prospectus” means any written communication that constitutes a “free
writing prospectus,” as defined in Rule 405 under the 1933 Act.
“ABS
Informational and Computational Material” means any written communication as
defined in Item 1101(a) of Regulation AB under the 1933 Act and the 1934 Act,
as
amended from time to time.
“Offering
Circular” means the offering circular, dated [__________] relating to the
private offering of the [_______________] Certificates.
“Regulation
AB”: Subpart 229.1100 – Asset Backed Securities (Regulation AB),
17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
(b) Promptly
after receipt by any indemnified party under this Section 1 of
notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 1, notify the indemnifying party in writing
of the claim or the commencement of that action; provided,
however, that the failure to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 1
except to the extent it has been materially prejudiced by such failure; and
provided,further, however, that the failure to notify any
indemnifying party shall not relieve it from any liability which it may have
to
any indemnified party otherwise than under this
Section 1.
If
any
such claim or action shall be brought against an indemnified party, and it
shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any
other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election
to
assume the defense of such claim or action, except as provided in the following
paragraph, the indemnifying party shall not be liable to the indemnified party
under this Section 1 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
Any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses
of
such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically
authorized by the indemnifying party in writing; (ii) such indemnified
party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel it is necessary or appropriate for such indemnified party to employ
separate counsel; or (iii) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate
O-3
counsel
at the expense of the indemnifying party, the indemnifying party shall not
have
the right to assume the defense of such action on behalf of such indemnified
party, it being understood, however, the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses
of
more than one separate firm of attorneys (in addition to local counsel) at
any
time for all such indemnified parties.
Each
indemnified party, as a condition of the indemnity agreements contained in
this
Section 1, shall cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled
with
its written consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for reasonable fees
and
expenses of counsel, the indemnifying party agrees that it shall be liable
for
any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement.
(c) If
the indemnification provided for in this Section 1 is unavailable to
an indemnified party, then the indemnifying party, in lieu of indemnifying
such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities,
in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party, respectively, in connection with
the statements or omissions that result in such losses, claims, damages or
liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified party and
indemnifying party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such parties and their relative knowledge, access to information
and
opportunity to correct or prevent such statement or omission and any other
equitable considerations.
(d) The
indemnity and contribution agreements contained in this Section 1
and the representations and warranties set forth in Section 2 shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the
Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s], their
respective affiliates, directors, officers, employees or agents or any person
controlling the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s]
or any such affiliate, and (iii) acceptance of and payment for any of the
Offered Certificates or Private Certificates.
O-4
7. Representations
and Warranties. Seller represents and warrants that:
(i) Seller
is validly existing and in good standing under the laws of its jurisdiction
of
formation or incorporation, as applicable, and has full power and authority
to
own its assets and to transact the business in which it is currently
engaged. Seller is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business transacted
by it or any properties owned or leased by it requires such qualification and
in
which the failure so to qualify would have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of
Seller;
(ii) Seller
is not required to obtain the consent of any other person or any consent,
license, approval or authorization from, or registration or declaration with,
any governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this
Agreement;
(iii) the
execution, delivery and performance of this Agreement by Seller will not violate
any provision of any existing law or regulation or any order decree of any
court
applicable to Seller or any provision of the charter or bylaws of Seller, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which Seller is a party or by which it may be bound;
(iv) (a) no
proceeding of or before any court, tribunal or governmental body is currently
pending or, (b) to the knowledge of Seller, threatened against Seller or
any of its properties or with respect to this Agreement or the Offered
Certificates, in either case, which would have a material adverse effect on
the
business, properties, assets or condition (financial or otherwise) of
Seller;
(v) Seller
has full power and authority to make, execute, deliver and perform this
Agreement and all of the transactions contemplated hereunder, and has taken
all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of each of Seller enforceable
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally, by the availability of
equitable remedies, and by limitations of public policy under applicable
securities law as to rights of indemnity and contribution
thereunder;
(vi) this
Agreement has been duly executed and delivered by Seller; and
(vii) the
Seller represents that the Seller Information satisfies the requirements of
the
applicable provisions of Regulation AB.
8. Notices. All
communications hereunder will be in writing and effective only on receipt,
and,
if sent to Seller, will be mailed, delivered or faxed or emailed and
confirmed by mail [______________________]; if sent to Xxxxxx, xxxx be mailed,
delivered or faxed or emailed and confirmed by mail to Xxxxxx Xxxxxxx
Mortgage Capital Inc., 1221 Avenue of the Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxxxx - Whole Loans
Operations Manager, Fax: [_______], Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx,
with
O-5
copies
to
(i) Xxxxx X. Xxx, Xxxxxx Xxxxxxx – Legal Counsel, Securities, Xxxxxx
Xxxxxxx, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax [_____],
Email: xxxxx.x.xxx@xxxxxxxxxxxxx.xxx, and (ii) Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxx – SPG Finance, Xxxxxx Xxxxxxx, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Fax [_____], Email: xxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx; if to the
Depositor, will be mailed, delivered or telegraphed and confirmed to
[____________________]; or if to the Underwriter[s], will be mailed, delivered
or telegraphed and confirmed to [_____________________]; or if to the Initial
Purchaser[s], will be mailed, delivered or telegraphed and confirmed to
[_____________________].
9. Miscellaneous. This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York without giving effect to the conflict of laws
provisions thereof. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their successors and assigns and the
controlling persons referred to herein, and no other person shall have any
right
or obligation hereunder. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. This Agreement
may be executed in counterparts, each of which when so executed and delivered
shall be considered an original, and all such counterparts shall constitute
one
and the same instrument. Capitalized terms used but not defined
herein shall have the meanings provided in the P&S.
[SIGNATURE
PAGE FOLLOWS]
O-6
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers hereunto duly authorized, this __th day
of
[_____________].
|
[DEPOSITOR]
|
|||
|
|
By:
|
||
| Name | |||
| Title | |||
|
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
|
|||
|
|
By:
|
||
| Name | |||
| Title | |||
|
[SELLER]
|
|||
|
|
By:
|
||
| Name | |||
| Title | |||
O-7
EXHIBIT
P
FORM
OF
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS
ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __, 20__]
(“Agreement”), among Xxxxxx Xxxxxxx Mortgage Capital Inc.
(“Assignor”), [____________________] (“Assignee”) and [SELLER]
(the “Company”):
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
Assignment
and Conveyance
1. The
Assignor hereby conveys, sells, grants, transfers and assigns to the Assignee
all of the right, title and interest of the Assignor, as purchaser, in, to
and
under (a) those certain Mortgage Loans listed on the schedule (the
“Mortgage Loan Schedule”) attached hereto as Exhibit A (the
“Mortgage Loans”) and (b) except as described below, that certain
Fourth Amended and Restated Master Seller’s Warranties and Servicing Agreement
(the “Sale and Servicing Agreement”), dated as of July 1, 2006,
between the Assignor, as purchaser (the “Purchaser”), and the Company, as
seller, solely insofar as the Sale and Servicing Agreement relates to the
Mortgage Loans.
The
Assignor specifically reserves and does not assign to the Assignee hereunder
any
and all right, title and interest in, to and under and any obligations of the
Assignor with respect to (a) Subsection 3.05 of the Sale and
Servicing Agreement or (b) any mortgage loans subject to the Sale and
Servicing Agreement which are not the Mortgage Loans set forth on the Mortgage
Loan Schedule and are not the subject of this Agreement.
Recognition
of the Company
2. From
and after the date hereof (the “Securitization Closing Date”), the
Company shall and does hereby recognize that the Assignee will transfer the
Mortgage Loans and assign its rights under the Sale and Servicing Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the “Trust”) created pursuant to a Pooling and
Servicing Agreement, dated as of [__________, 200_] (the “Pooling
Agreement”), among the Assignee, the Assignor, [___________________], as
trustee (including its successors in interest and any successor trustees under
the Pooling Agreement, the “Trustee”), [____________________], as
servicer (including its successors in interest and any successor servicer under
the Pooling Agreement, the “Servicer”). The Company hereby
acknowledges and agrees that from and after the date hereof (i) the Trust
will be the owner of the Mortgage Loans, (ii) the Company shall look solely
to the Trust for performance of any obligations of the Assignor insofar as
they
relate to the Mortgage Loans, (iii) the Trust (including the Trustee and
the Servicer acting on the Trust’s behalf) shall have all the rights and
remedies available to the Assignor, insofar as they relate to the Mortgage
Loans, under the Sale and Servicing Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in
Section 6 of the Sale and Servicing Agreement, and shall be entitled to
enforce all of the
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obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and
(iv) all references to the Purchaser, the Custodian or the Bailee under the
Sale and Servicing Agreement insofar as they relate to the Mortgage Loans,
shall
be deemed to refer to the Trust (including the Trustee and the Servicer acting
on the Trust’s behalf). Neither the Company nor the Assignor shall
amend or agree to amend, modify, waiver, or otherwise alter any of the terms
or
provisions of the Sale and Servicing Agreement which amendment, modification,
waiver or other alteration would in any way affect the Mortgage Loans or the
Company’s performance under the Sale and Servicing Agreement with respect to the
Mortgage Loans without the prior written consent of the Trustee.
Representations
and Warranties of the Company
3. The
Company warrants and represents to the Assignor, the Assignee and the Trust
as
of the date hereof that:
(a) The
Company is duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its incorporation;
(b) The
Company has full power and authority to execute, deliver and perform its
obligations under this Agreement and has full power and authority to perform
its
obligations under the Sale and Servicing Agreement. The execution by
the Company of this Agreement is in the ordinary course of the Company’s
business and will not conflict with, or result in a breach of, any of the terms,
conditions or provisions of the Company’s charter or bylaws or any legal
restriction, or any material agreement or instrument to which the Company is
now
a party or by which it is bound, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its property
is
subject. The execution, delivery and performance by the Company of
this Agreement have been duly authorized by all necessary corporate action
on
part of the Company. This Agreement has been duly executed and
delivered by the Company, and, upon the due authorization, execution and
delivery by the Assignor and the Assignee, will constitute the valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or hereafter
in
effect relating to creditors’ rights generally, and by general principles of
equity regardless of whether enforceability is considered in a proceeding in
equity or at law;
(c) No
consent, approval, order or authorization of, or declaration, filing or
registration with, any governmental entity is required to be obtained or made
by
the Company in connection with the execution, delivery or performance by the
Company of this Agreement; and
(d) There
is no action, suit, proceeding or investigation pending or threatened against
the Company, before any court, administrative agency or other tribunal, which
would draw into question the validity of this Agreement or the Sale and
Servicing Agreement, or which, either in any one instance or in the aggregate,
would result in any material adverse change in the ability of the Company to
perform its obligations under this Agreement or the Sale and Servicing
Agreement, and the Company is solvent.
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4. Pursuant
to Section 7.01 of the Sale and Servicing Agreement, the Company hereby
represents and warrants, for the benefit of the Assignor, the Assignee and
the
Trust, that the representations and warranties set forth in Section 3.01
and Section 3.02 of the Sale and Servicing Agreement are true and correct
as of the date hereof as if such representations and warranties were made on
the
date hereof unless otherwise specifically stated in such representations and
warranties.
Remedies
for Breach of Representations and Warranties
5. The
Company hereby acknowledges and agrees that the remedies available to the
Assignor, the Assignee and the Trust (including the Trustee and the Servicer
acting on the Trust’s behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3
and 4 hereof shall be as set forth in Subsection 3.03 of the Sale
and Servicing Agreement as if they were set forth herein (including without
limitation the repurchase and indemnity obligations set forth
therein).
Miscellaneous
6. This
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of law principles, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
7. No
term or provision of this Agreement may be waived or modified unless such waiver
or modification is in writing and signed by the party against whom such waiver
or modification is sought to be enforced, with the prior written consent of
the
Trustee.
8. This
Agreement shall inure to the benefit of (i) the successors and assigns of
the parties hereto and (ii) the Trust (including the Trustee and the
Servicer acting on the Trust’s behalf). Any entity into which
Assignor, Assignee or Company may be merged or consolidated shall, without the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
9. Each
of this Agreement and the Sale and Servicing Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Sale and Servicing
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend
the
terms of the Sale and Servicing Agreement.
10. This
Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and
all such counterparts shall constitute one and the same instrument.
11. In
the event that any provision of this Agreement conflicts with any provision
of
the Sale and Servicing Agreement with respect to the Mortgage Loans, the terms
of this Agreement shall control.
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12. Capitalized
terms used in this Agreement (including the exhibits hereto) but not defined
in
this Agreement shall have the meanings given to such terms in the Sale and
Servicing Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers as of the date first above written.
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[SELLER]
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By:
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XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
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By:
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[ASSIGNEE]
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By:
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| Name | |||
| Title | |||
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