FLOW SERVICING AGREEMENT between LEHMAN BROTHERS BANK, FSB
FLOW
SERVICING AGREEMENT
between
XXXXXX
BROTHERS BANK, FSB
OWNER
and
AURORA
LOAN SERVICES INC.
SERVICER
Dated
as of August 31, 1999
Residential
Adjustable and Fixed Rate Mortgage Loans
Group
No.
TABLE
OF
CONTENTS
ARTICLE
I
DEFINITIONS
ARTICLE
II
OWNER’S
ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES
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Section
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Page
|
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2.01
|
Contract
for Servicing; Possession of Servicing Files
|
13
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2.02
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Books
and Records
|
13
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2.03
|
Commencement
of Servicing Responsibilities
|
14
|
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2.04
|
Owner
Covenants Regarding Transfer of Servicing
|
14
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2.05
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Custodial
Agreement
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16
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ARTICLE
III
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||
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SERVICING
THE MORTGAGE LOANS
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3.01
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Servicer
to Service
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18
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3.02
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Collection
of Mortgage Loan Payments
|
20
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3.03
|
Establishment
of and Deposits to Custodial Account
|
20
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3.04
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Permitted
Withdrawals From Custodial Account
|
21
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3.05
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Establishment
of and Deposits to Escrow Account
|
22
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3.06
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Permitted
Withdrawals From Escrow Account
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22
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3.07
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Maintenance
of FHA Mortgage Insurance and VA Guaranty
|
23
|
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3.08
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Notification
of Adjustments
|
23
|
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3.09
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Completion
and Recordation of Assignment of Mortgage and FHA and VA Change
Notices
|
24
|
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3.10
|
Protection
of Accounts
|
24
|
|
3.11
|
Title,
Management and Disposition of REO Property
|
25
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3.12
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Real
Estate Owned Reports
|
26
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ARTICLE
IV
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PAYMENTS
TO OWNER
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4.01
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Remittances
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27
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4.02
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Statements
to Owner
|
27
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4.03
|
Monthly
Advances by Servicer
|
28
|
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ARTICLE
V
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GENERAL
SERVICING PROCEDURES
|
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5.01
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Servicing
Compensation
|
29
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5.02
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Reimbursement
of Servicing Advances
|
29
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ARTICLE
VI
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REPRESENTATIONS,
WARRANTIES AND AGREEMENTS; REMEDIES AND BREACH
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6.01
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Representations,
Warranties and Agreements of the Servicer
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30
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6.02
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Remedies
for Breach of Representations and Warranties of the Servicer
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31
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6.03
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Representations
and Warranties of the Owner
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32
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6.04
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Remedies
for Breach of Representations and Warranties of the Owner
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33
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ARTICLE
VII
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||
|
AGENCY
TRANSFER; WHOLE LOAN TRANSFER; PASS-THROUGH TRANSFER
|
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7.01
|
Removal
of Mortgage Loans from Inclusion under this Agreement upon an Agency
Transfer, a Pass-Through Transfer or a Whole Loan Transfer on one
or more
Reconstitution Dates
|
35
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7.02
|
Additional
Indemnification by the Servicer; Third Party Claims
|
36
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7.03
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Monthly
Advances, Compensating Interest and Servicing Fees after
Reconstitution
|
37
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7.04
|
Maintenance
of Custodial and Escrow Accounts after Reconstitution
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37
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7.05
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Owner’s
Repurchase and Indemnification Obligations
|
38
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7.06
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Termination
Fees after Reconstitution
|
39
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7.07
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Additional
Remittance
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39
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7.08
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Transfer
of Servicing Following Reconstitution
|
40
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ARTICLE
VIII
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THE
SERVICER
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8.01
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Merger
or Consolidation of the Servicer
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41
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8.02
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Limitation
on Liability of the Servicer and Others
|
41
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8.03
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Limitation
on Resignation and Assignment by the Servicer
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41
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ARTICLE
IX
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TERMINATION
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9.01
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Termination
For Cause
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42
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9.02
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Termination
Without Cause
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43
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ARTICLE
X
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MISCELLANEOUS
PROVISIONS
|
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10.01
|
Successor
to the Servicer
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45
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10.02
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Closing
|
46
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10.03
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Closing
Documents
|
47
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10.04
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Costs
|
48
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10.05
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Protection
of Confidential Information
|
48
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10.06
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Notices
|
48
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10.07
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Severability
Clause
|
49
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10.08
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No
Personal Solicitation
|
49
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10.09
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Counterparts
|
50
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10.10
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Place
of Delivery and Governing Law
|
50
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10.11
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Further
Agreements
|
50
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10.12
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Intention
of the Parties
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50
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10.13
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Successors
and Assigns; Assignment of Servicing Agreement
|
51
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10.14
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Waivers
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51
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10.15
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Exhibits
|
51
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10.16
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General
Interpretive Principles
|
51
|
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10.17
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Reproduction
of Documents
|
51
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10.18
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Regulatory
Authorities
|
51
|
EXHIBITS
|
EXHIBIT
A
|
MORTGAGE
LOAN SCHEDULE
|
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EXHIBIT
B-1
|
FORM
OF ACKNOWLEDGMENT AGREEMENT
|
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EXHIBIT
B-2
|
FORM
OF CONFIRMATION AGREEMENT
|
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EXHIBIT
C
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CUSTODIAL
ACCOUNT LETTER AGREEMENT
|
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EXHIBIT
D
|
ESCROW
ACCOUNT LETTER AGREEMENT
|
|
EXHIBIT
E-1
|
OFFICER’S
CERTIFICATE FOR FIRST CLOSING
|
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EXHIBIT
E-2
|
OFFICER’S
CERTIFICATE FOR SUBSEQUENT CLOSINGS
|
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EXHIBIT
F
|
FORM
OF CUSTODIAL AGREEMENT
|
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EXHIBIT
G
|
FORM
OF OPINION OF COUNSEL OF THE SERVICER
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EXHIBIT
H
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FORM
OF COLLATERAL
PLEDGE AND SECURITY AGREEMENT
|
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EXHIBIT
I
|
FEE
SCHEDULE
|
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EXHIBIT
J
|
FORM
OF REO DISPOSITION FEE LETTER
AGREEMENT
|
-v-
FLOW
SERVICING AGREEMENT
This
is a
Flow Servicing Agreement (the “Agreement”),
dated
as of _________, 1999, by and between Xxxxxx Brothers Bank, FSB, having an
office at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (the “Owner”)
and
Aurora Loan Services Inc., having an office at 0000 Xxxxx Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxx 00000 (the “Servicer”).
WITNESSETH
WHEREAS,
the Owner shall acquire from time to time certain ownership to and the servicing
rights for certain fixed and adjustable rate first and second lien mortgage
loans (“Conventional
Loans”)
and/or
certain FHA insured (“FHA
Loans”)
and VA
guaranteed (“VA
Loans”)
mortgage loans from various third party sellers and servicers thereof (the
Conventional Loans, FHA Loans and VA Loans collectively referred to herein
as
the “Mortgage
Loans”);
WHEREAS,
the Owner desires to contract with the Servicer for the servicing
responsibilities associated with the Mortgage Loans and the Servicer desires
to
assume the servicing responsibilities to such Mortgage Loans; and
WHEREAS,
the Owner desires to sell some or all of the Mortgage Loans from time to time
(a) to FNMA under its Cash Purchase Program or MBS SWAP Program (Special
Servicing Option) (each a “FNMA
Transfer”);
or
(b) to FHLMC under its Xxxxxxx Xxx Xxxx Program or Gold PC Program (the
“FHLMC
Transfer”);
or
(c) to GNMA under its MBS Swap Program I (the “GNMA
Transfer”);or
(d)
to one or more third party purchasers in one or more whole loan pools (each
a
“Whole
Loan Transfer”);
or
(e) directly or indirectly, to certain trusts to be formed as part of
publicly-issued or privately placed, rated or unrated, mortgage pass-through
transactions (each a “Pass-Through
Transfer”),
in
any or all cases (subject to the terms of this Agreement) retaining the Servicer
to service the Mortgage Loans.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and reasonable consideration, the receipt and adequacy of which
is hereby acknowledged, the Owner and Servicer hereby agree as
follows:
ARTICLE
I
DEFINITIONS
The
following terms are defined as follows (except as otherwise agreed in writing
by
the parties):
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type
as
such Mortgage Loans in the jurisdiction where the related Mortgaged Property
is
located.
Acknowledgment
Agreement:
The
document to be executed by the Owner and the Servicer which document shall
amend
the Mortgage Loan Schedule attached as Exhibit A hereto to reflect the addition
of Mortgage Loans to such Exhibit A and which document reflects the addition
of
Mortgage Loans which are subject to the terms and conditions of this
Agreement.
Act:
The
National Housing Act, as amended from time to time.
Additional
Remittance:
With
respect to each Mortgage Loan subject to an Agency Transfer, a Whole Loan
Transfer or a Pass-Through Transfer, the portion of the Reconstituted Servicing
Fee received by the Servicer under a Reconstitution Agreement which amount
shall
be equal to the difference between such Reconstituted Servicing Fee and the
Servicing Fee set forth herein, which amount shall be remitted to the Owner
or
its assigns and shall be freely transferable by the Owner or its
assigns.
Additional
Remittance Date:
The
last Business Day of each month of the related Remittance Date under the
applicable Reconstitution Agreement.
Adjustable
Rate Mortgage Loan:
A
Mortgage Loan serviced pursuant to this Agreement under which the Mortgage
Interest Rate is adjusted from time to time in accordance with the terms and
provisions of the Mortgage Note.
Agency
Transfer:
The
sale or transfer by Owner of some or all of the Mortgage Loans to FNMA under
its
Cash Purchase Program or its MBS Swap Program (Special Servicing Option) or
to
FHLMC under its Xxxxxxx Xxx Xxxx Program or Gold PC Program, or to GNMA under
its MBS Swap Program, retaining the Servicer as “servicer”
thereunder.
Agreement:
This
Flow Servicing Agreement and all amendments hereof and supplements
hereto.
Ancillary
Income:
All
income derived from the Mortgage Loans, other than Servicing 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. The Owner shall retain all Ancillary Income with the exception of
optional insurance and administrative fees payable as a direct result of the
Servicer’s efforts and fees that are not obligations of the Mortgagor under the
related Mortgage Note or under Accepted Servicing Practices.
-2-
Applicable
Agency:
With
respect to Conventional Loans, FNMA or FHLMC as the case may be, and with
respect to FHA Loans or VA Loans, GNMA.
Appraised
Value:
The
value set forth in an appraisal made in connection with the origination of
the
related Mortgage Loan as the value of the Mortgaged Property.
Assignment
Fee:
The
Assignment Fee indicated on the applicable Acknowledgment Agreement, which
fee
shall be payable within 30 days following the later to occur of (i) the
completion of the transfer of all of the applicable Mortgage Loan information
onto the Servicer’s computer system or (ii) the receipt by the Owner of an
invoice from the Servicer for the Assignment Fee.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the transfer of the Mortgage
to
the party indicated therein, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering the
Mortgage Loans secured by Mortgaged Properties located in the same jurisdiction,
if permitted by law.
Best
Efforts: Efforts
determined to be reasonably diligent by the Owner or Servicer, as the case
may
be, in its sole discretion. Such efforts do not require the Owner or Servicer,
as the case may be, to enter into any litigation, arbitration or other legal
or
quasi-legal proceeding, nor do they require the Owner or Servicer, as the case
may be, to advance or expend fees or sums of money in addition to those
specifically set forth in this Agreement.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the either the State of New York, the State of
Nebraska, or the State of Delaware are authorized or obligated by law or
executive order to be closed.
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.
Collateral
Pledge and Security Agreement:
With
respect to each Reconstitution Date, the security agreement to be executed
by
the Owner and the Servicer, in the form attached hereto as Exhibit
H,
which
agreement shall serve to create a security interest in favor of the Owner and
its assigns in the servicing rights related to the Mortgage Loans being
reconstituted.
-3-
Condemnation
Proceeds:
All
awards of settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan documents.
Confirmation
Agreement:
The
document to be executed by the Owner and the Servicer and returned by the
Servicer to the Owner in accordance with Section 10.06 within 5 Business Days
of
receipt of such document from the Owner which document shall confirm the
Servicer’s acceptance of its engagement to perform servicing responsibilities
for the Owner with respect to additional Mortgage Loans.
Conventional
Loan:
A
conventional residential first or second lien fixed or adjustable rate Mortgage
Loan which is neither FHA insured nor VA guaranteed.
Costs:
For any
Person, any claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses of such Person.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
3.03.
Custodial
Agreement:
The
agreement or agreements governing the retention of original Mortgage Loan
documents which shall be substantially similar in form and substance to the
Custodial Agreement attached as Exhibit F hereto. On the date when servicing
responsibilities for particular Mortgage Loans are transferred by the Owner
to
the Servicer hereunder, the Owner and Servicer will execute an Assignment and
Assumption Agreement in which Owner assigns to Servicer the Owner's rights
as
initial servicer under the related Custodial Agreement.
Custodian:
The
Custodian under the related Custodial Agreement identified in the related
Confirmation Agreement and related Acknowledgment Agreement, or its successors
in interest or assigns or any successor to the related Custodian under the
Custodial Agreement as provided therein.
Delinquent
Subprime Mortgage Loan:
A
Delinquent Mortgage Loan which is also a Subprime Mortgage Loan.
Determination
Date:
For
each month that this Agreement is in effect, the last Business Day of such
month
as determined by the Servicer on a monthly basis.
Delinquent
Mortgage Loan:
A
Mortgage Loan which is more than 89 days delinquent (without regard to any
applicable grace period).
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 following the actual Due Date.
-4-
Due
Period:
With
respect to each Remittance Date, the period commencing on the first day of
the
month preceding the month of the Remittance Date and ending on the last day
of
the month preceding 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 one day prior to the Remittance 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, (A) a Qualified Depository; or (B) any other 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, provided that at the
time of such investment or contractual commitment providing for such investment
the commercial paper or other short-term debt obligations of such other
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 Xxxxx’x Investors Service, Inc. and the
long-term debt obligations of such holding company) are rated “P-1” by Xxxxx’x
Investors Service, Inc. 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
Xxxxx’x Investors Service, Inc.;
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.
-5-
Errors
and Omissions Insurance:
Errors
and Omissions Insurance to be maintained by the Servicer pursuant to the FNMA
Guides.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section
3.05.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other document.
Event
of Default:
Any
event set forth in Section 9.01.
FDIC: The
Federal Deposit Insurance Corporation, or any successor thereto.
FHA:
The
Federal Housing Administration, an agency within the United States Department
of
Housing and Urban Development, or any successor thereto and including the
Federal Housing Commissioner and the Secretary of Housing and Urban Development
where appropriate under the FHA Regulations.
FHA
Approved Mortgagee:
A
corporation or institution approved as a mortgagee by FHA under the Act, and
applicable HUD regulations, and eligible to own and service mortgage loans
such
as the FHA Loans.
FHA
Assigned Mortgage Loan:
A
Mortgage Loan that has been in default for longer than the applicable FHA grace
period and respecting which written notice of an intention to assign has been
filed with the FHA, whether or not such Mortgage Loan has in fact been assigned
to the FHA.
FHA
Insurance Contract:
The
contractual obligation of FHA respecting the insurance of a Mortgage
Loan.
FHA
Loan:
A
residential Mortgage Loan which is the subject of an FHA Insurance Contract
as
evidenced by a mortgage insurance certificate.
FHA
Mortgage Insurance:
Mortgage insurance authorized under the Act and provided by the
FHA.
FHA
Regulations:
Regulations promulgated by HUD under the National Housing Act, codified in
24
Code of Federal Regulations, and other HUD issuances relating to FHA Loans,
including the related handbooks, circulars, notices and mortgagee
letters.
FHLMC:
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
-6-
FHLMC
Guides:
The
FHLMC Selling Guide and the FHLMC Servicing Guide and all amendments or
additions thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Servicer pursuant to the FNMA
Guides.
First
Remittance Date:
With
respect to each Mortgage Loan, the 10th day of the month following the month
in
which the related Transfer Date occurs, or if such 10th day is not a Business
Day, the first Business Day immediately following such 10th day.
Fixed
Rate Mortgage Loan:
Any
individual Mortgage Loan serviced pursuant to this Agreement wherein the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term
of
such Mortgage Loan.
FNMA:
The
Federal National Mortgage Association, or any successor thereto.
FNMA
Guides:
The
FNMA Selling Guide and the FNMA Servicing Guide and all amendments or additions
thereto.
GNMA:
The
Government National Mortgage Association, or any successor thereto.
HUD:
The
Department of Housing and Urban Development, or any federal agency or official
thereof which may from time to time succeed to the functions thereof with regard
to FHA Mortgage Insurance. The term “HUD,” for purposes of this Agreement, is
also deemed to include subdivisions thereof such as the FHA and Government
National Mortgage Association.
Initial
Transfer Date:
The
first Transfer Date with respect to servicing of Mortgage Loans
hereunder.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property including FHA insurance proceeds
and/or VA guaranty proceeds.
Liquidation
Proceeds: Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise, or the sale of the related REO Property, if
the
Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any
successor in interest thereto.
-7-
MERS
Eligible Mortgage Loan:
Any
Mortgage Loan that has been designated by the Servicer as recordable in the
name
of MERS.
MERS
Mortgage Loan:
Any
Mortgage Loan as to which the related Mortgage, or an Assignment of Mortgage,
has been or will be recorded in the name of MERS, as agent for the holder from
time to time of the Mortgage Note.
Monthly
Advance:
With
respect to each Remittance Date and each Mortgage Loan, an amount equal to
the
Monthly Payment (with the interest portion of such Monthly Payment adjusted
to
the Mortgage Loan Remittance Rate) which was due on the Mortgage Loan, and
(i)
which was delinquent at the close of business on the immediately preceding
Determination Date and (ii) which was not the subject of a previous Monthly
Advance.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first or second lien on an unsubordinated estate in fee simple in
real
property securing the Mortgage Note.
Mortgage
Impairment Insurance Policy:
A
mortgage impairment or blanket hazard insurance policy as described in the
applicable agency guides.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note.
Mortgage
Loan:
An
individual Mortgage Loan which is the subject of this Agreement, each Mortgage
Loan subject to this Agreement being identified on the Mortgage Loan Schedule,
which Mortgage Loan includes without limitation the Mortgage Loan documents,
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 Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Owner, which shall be equal to the Mortgage Interest Rate minus the applicable
Servicing Fee.
Mortgage
Loan Schedule:
A
schedule of certain Mortgage Loans setting forth information with respect to
such Mortgage Loans, which schedule supplements this Agreement and becomes
part
of Exhibit A hereof on the related Transfer Date to reflect the addition of
such
Mortgage Loans to the terms of this Agreement.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property securing repayment of the debt evidenced by a Mortgage
Note.
-8-
Mortgagor:
The
obligor on a Mortgage Note.
Net
Sale Proceeds:
The
proceeds from the sale of REO Property, net of all expenses incurred by the
Servicer in connection with such sale, including, without limitation, legal
fees
and expenses, referral fees, brokerage commissions, conveyance taxes and any
other related expense.
Non-MERS
Eligible Mortgage Loan:
Any
Mortgage Loan other than a MERS Eligible Mortgage Loan.
Non-MERS
Mortgage Loan:
Any
Mortgage Loan other than a MERS Mortgage Loan.
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 Owner, and delivered to the Servicer as required by this
Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Servicer, reasonably
acceptable to the Owner.
Owner:
Xxxxxx
Brothers Bank, FSB, or its successors in interest and assigns.
Pass-Through
Transfer:
The
sale or transfer of some or all of the Mortgage Loans to a trust to be formed
as
part of a publicly-issued and/or privately placed, rated or unrated, mortgage
pass-through transaction, retaining the Servicer as “servicer” (with or without
a master servicer) thereunder.
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
PMI
Policy:
A
policy of primary mortgage guaranty insurance issued by a Qualified Insurer,
as
required by this Agreement with respect to certain Mortgage Loans.
Prepayment
Interest Shortfall Amount:
With
respect to any Mortgage Loan that was subject to a Principal Prepayment in
full
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 Reconstituted 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 Wall Street Journal Northeast Edition,
and if
on a given day such rate is not so published, the prime rate shall be the
average of the prime rates published on such day by three leading commercial
banks in New York City.
-9-
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.
Prior
Servicer:
Any
prior servicer (other than the Servicer) of any or all of the Mortgage
Loans.
Qualified
Depository:
A
depository shall be deemed to be a Qualified Depository under this Agreement
so
long as it meets the Applicable Agency requirements.
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 FNMA, FHLMC and GNMA.
Reconstitution
Agreements:
The
agreement or agreements entered into by the Owner, the Servicer, FNMA, FHLMC
or
GNMA or certain third parties on the Reconstitution Date(s) with respect to
any
or all of the Mortgage Loans serviced hereunder, in connection with a Whole
Loan
Transfer, a Pass-Through Transfer or an Agency Transfer as set forth in Section
7.01, including, but not limited to, (i) a FNMA Mortgage Selling and Servicing
Contract, a Pool Purchase Contract, and any and all servicing agreements and
tri-party agreements reasonably required by FNMA with respect to a FNMA
Transfer, (ii) a Purchase Contract and all purchase documents associated
therewith as set forth in the Xxxxxxx Xxx Xxxxxxx’ & Servicers’ Guide, and
any and all servicing agreements and tri-party agreements reasonably required
by
FHLMC with respect to a FHLMC Transfer, (iii) any and all documents as set
forth
in the GNMA Mortgage-Backed Securities Guide, and any and all servicing
agreements and tri-party agreements reasonably required by GNMA with respect
to
a GNMA Transfer, (iv) a pooling and servicing agreement and/or a
subservicing/master servicing agreement and related custodial/trust agreement
and related documents with respect to a Pass-Through Transfer and (iv) a
seller’s warranties and servicing agreement or a sale and servicing agreement
and related custodial agreement and closing documents with respect to a Whole
Loan Transfer. Such agreement or agreements shall prescribe the rights and
obligations of the Servicer in servicing the related Mortgage Loans and shall
provide for a Reconstituted Servicing Fee to the Servicer, net of any guarantee
fees due FNMA, FHLMC or GNMA, if applicable, at least equal to the Servicing
Fee
due the Servicer in accordance with this Agreement or the Reconstituted
Servicing Fee required pursuant to the Reconstitution Agreement, whichever
is
greater. The Reconstituted Servicing Fee and the form of relevant Reconstitution
Agreement to be entered into by the Owner and/or master servicer or trustee
and
the Servicer with respect to Pass-Through Transfers and/or Whole Loan Transfers
shall be reasonably satisfactory in form and substance to the Owner and the
Servicer (giving due regard to any rating or master servicing requirements
and
the provisions of Section 9.02 hereof) and the representations and warranties
and servicing provisions contained therein shall be substantially similar to
those contained in this Agreement, unless otherwise mutually agreed by the
parties.
-10-
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
an
Agency Transfer, a Pass-Through Transfer or a Whole Loan Transfer pursuant
to
Section 7.01 hereof. On such date or dates, the Mortgage Loans transferred
shall
cease to be covered by this Agreement and the Servicer’s servicing
responsibilities shall cease under this Agreement with respect to the related
transferred Mortgage Loans, other than the obligation to remit the Additional
Remittance in accordance with the provisions set forth in Section 7.07 hereof
and the right of the Owner to cause a transfer of the servicing responsibilities
to the Mortgage Loans and/or REO Properties in accordance with Section 7.08
hereof.
Reconstituted
Servicing Fee:
With
respect to each reconstituted Mortgage Loan that is subject to a Reconstitution
Agreement, the monthly fee to which the Servicer thereunder is entitled, which
shall be equal to the servicing fee specified in the applicable Reconstitution
Agreement.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
Remittance
Date:
The
10th day (or if such 10th day is not a Business Day, the first Business Day
immediately following) of any month, following the First Remittance
Date.
REO
Disposition:
The
final sale by the Servicer of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
3.11.
REO
Property:
A
Mortgaged Property acquired by the Servicer on behalf of the Owner through
foreclosure or by deed in lieu of foreclosure, pursuant to Section
3.11.
Servicer:
Aurora
Loan Services Inc. or its successor in interest or assigns or any successor
to
the Servicer under this Agreement as herein provided.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred in the
performance by the Servicer 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 administrative or judicial
proceedings, including foreclosures, (c) the management and liquidation of
the
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of
the
Mortgage, (d) taxes, assessments, water rates, sewer rents and other charges
which are or may become a lien upon the Mortgaged Property, and PMI Policy
premiums and fire and hazard insurance coverage, (e) any losses sustained by
the
Servicer with respect to the liquidation of the Mortgaged Property and (f)
compliance with the obligations pursuant to the provisions of the FNMA
Guides.
-11-
Servicing
Fee:
With
respect to each Mortgage Loan that has not been removed from this Agreement
as
part of an Agency Transfer, a Pass-Through Transfer or a Whole Loan Transfer,
and with respect to each Mortgage Loan that has been removed from this Agreement
as part of an Agency Transfer, a Pass-Through Transfer or Whole Loan Transfer
and subsequently repurchased by the Owner pursuant to Section 7.05 hereof and
again becoming subject to this Agreement, the servicing fee shall be set forth
in Exhibit I hereto.
Servicing
File:
The
items pertaining to a particular Mortgage Loan including, but not limited to,
the computer files, data disks, books, records, data tapes, notes, and all
additional documents generated as a result of or utilized in originating and/or
servicing each Mortgage Loan, which are held in trust for the Owner by the
Servicer.
Servicing
Officer: Any
officer of the Servicer 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 Servicer to the Owner 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 Servicer for servicing the Mortgage
Loans; (c) any late fees, penalties or similar payments with respect to the
Mortgage Loans; (d) all agreements or documents creating, defining or evidencing
any such servicing rights to the extent they relate to such servicing rights
and
all rights of the Servicer thereunder; (e) Escrow Payments or other similar
payments with respect to the Mortgage Loans and any amounts actually collected
by the Servicer 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.
Set-Up
Fee:
The
set-up fee indicated on the applicable Acknowledgment Agreement, which fee
shall
be payable within 30 days following the later to occur of (i) the completion
of
the transfer of all of the applicable Mortgage Loan information onto the
Servicer’s computer system or (ii) the receipt by the Owner of an invoice from
the Servicer for the Set-Up Fee.
Subprime
Mortgage Loan:
Any
Mortgage Loan made to a Mortgagor with less than an A credit history as
identified by the Owner to the Servicer.
Transfer
Date:
The
date or dates upon which the Servicer commences the servicing responsibilities
with respect to Mortgage Loans in accordance with the terms set forth herein
which dates shall be as set forth in the related Confirmation Agreement and
Acknowledgment Agreement.
-12-
VA:
The
Veterans Administration, an agency of the United States of America, or any
successor thereto including the Administrator of Veterans Affairs.
VA
Approved Lender:
Those
lenders which are approved by the VA to act as a lender in connection with
the
origination of VA Loans.
VA
Loan:
A
Mortgage Loan which is the subject of a VA Loan Guaranty Agreement as evidenced
by a Loan Guaranty Certificate, or a Mortgage Loan which is a vendee loan sold
by the VA.
VA
Loan Guaranty Agreement:
The
obligation of the United States to pay a specific percentage of a Mortgage
Loan
(subject to a maximum amount) upon default of the Mortgagor pursuant to the
Servicemen’s Readjustment Act, as amended.
VA
Loan Guaranty Certificate:
The
certificate evidencing a VA Loan Guaranty Agreement.
VA
Regulations:
Regulations promulgated by the Veteran’s Administration pursuant to the
Servicemen’s Readjustment Act, as amended, codified in 38 Code of Federal
Regulations, and other VA issuances relating to VA Loans, including related
Handbooks, Circulars and Notices.
Whole
Loan Transfer:
The
sale or transfer of some or all of the Mortgage Loans to a third party purchaser
in a whole loan transaction pursuant to a seller’s warranties and servicing
agreement or a participation and servicing agreement, retaining the Servicer
as
“servicer” thereunder.
-13-
ARTICLE
II
OWNER’S
ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES
Section
2.01. Contract
for Servicing; Possession of Servicing Files.
The
Owner, by execution and delivery of this Agreement (and the related
Acknowledgment Agreement and Confirmation Agreement), does hereby contract
with
the Servicer, subject to the terms of this Agreement, for the servicing of
the
Mortgage Loans. On or before each Transfer Date, the Owner shall cause to be
delivered or will use its Best Efforts to cause to be delivered the Servicing
Files with respect to the Mortgage Loans listed on the related Mortgage Loan
Schedule to the Servicer to be held in trust for the Owner pursuant to this
Agreement. On or before each Transfer Date, the Owner shall, with respect to
the
Mortgage Loans on the related Mortgage Loan Schedule, execute and deliver an
Acknowledgment Agreement in the form attached hereto as Exhibit B-1, which
Acknowledgment Agreement shall be executed and delivered simultaneously by
the
Servicer to the Owner. Each Servicing File delivered to the Servicer shall
be
held by the Servicer in order to service the Mortgage Loans pursuant to this
Agreement and are and shall be held in trust by the Servicer for the benefit
of
the Owner as the owner thereof. The Servicer’s possession of any portion of the
Mortgage Loan documents shall be at the will of the Owner for the sole purpose
of facilitating servicing of the related Mortgage Loan pursuant to this
Agreement, and such retention and possession by the Servicer shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and
the
contents of the Servicing File shall be vested in the Owner 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 Servicer shall immediately vest in
the
Owner and shall be retained and maintained, in trust, by the Servicer at the
will of the Owner in such custodial capacity only. The portion of each Servicing
File retained by the Servicer pursuant to this Agreement shall be segregated
from the other books and records of the Servicer and shall be appropriately
marked to clearly reflect the ownership of the related Mortgage Loan by the
Owner. The Servicer shall release from its custody the contents of any Servicing
File retained by it only in accordance with this Agreement.
Section
2.02. Books
and Records.
Record
title to each Mortgage and the related Mortgage Note shall, at the Owner’s
option, remain in the name of (i) the Servicer or (ii) in the name as the Owner
shall designate. Subject to Section 3.01(a) hereof, the Owner, its designee
or
the Servicer shall prepare or cause to be prepared and (A) record or cause
to be
recorded any Assignments of Mortgage (A) with respect to each MERS Eligible
Mortgage Loan, in the name of MERS, or shall ascertain that such has previously
been so recorded or (B) with respect to each Non-MERS Mortgage Loan, in the
name
as the Owner shall designate, unless instructions to the contrary are delivered
to the Servicer and shall pay all necessary fees associated with the preparation
and recording of the Assignments of Mortgage. Notwithstanding the foregoing,
the
Servicer shall cooperate with the Owner in the Owner’s preparation and recording
of any and all Assignments of Mortgage. Additionally, the Servicer shall prepare
and execute, at the direction of the Owner, any note endorsements in connection
with any and all Reconstitution Agreements. All rights arising out of the
Mortgage Loans shall be vested in the Owner. All funds received on or in
connection with a Mortgage Loan shall be received and held by the Servicer
in
trust for the benefit of the Owner as the owner of the Mortgage Loans pursuant
to the terms of this Agreement.
-14-
Section
2.03. Commencement
of Servicing Responsibilities.
On
each
Transfer Date, the Owner shall appoint the Servicer to perform, and the Servicer
shall assume and accept such appointment for, all servicing responsibilities
for
the related Mortgage Loans on the related Mortgage Loan Schedule. The engagement
of the Servicer to perform the servicing responsibilities hereunder is not
mandatory and is expressly conditioned upon the acquisition of the related
Mortgage Loans by the Owner, the election of the Owner respecting the engagement
of the Servicer to perform the related servicing responsibilities and the
election, in the manner hereinafter set forth, of the Servicer to accept such
transfer.
Upon
the
Owner’s determination in its sole discretion to engage the Servicer to perform
the servicing responsibilities with respect to Conventional Loans, FHA Loans
and/or VA Loans pursuant to the terms of this Agreement, the Owner shall execute
a Confirmation Agreement in the form attached as Exhibit B-2 hereto, and deliver
the same to the Servicer. The Owner shall notify the Servicer by telephone
of
its determination to transfer such servicing responsibilities to the Servicer
and shall deliver the Confirmation Agreement to the Servicer within 2 Business
Days of such verbal notification. The Servicer may elect to accept or reject
on
an all or nothing basis such engagement to perform the servicing
responsibilities with respect to the additional Conventional Loans, FHA Loans
and/or VA Loans by either (i) in the case of an acceptance, executing the
Confirmation Agreement and delivering the same to the Owner in accordance with
Section 10.06 within 5 Business Days of receipt of such Confirmation Agreement,
or (ii) in the case of a rejection, by written notification thereof delivered
to
the Owner in accordance with Section 10.06 within 5 Business Days of receipt
of
such Confirmation Agreement.
Section
2.04. Owner
Covenants Regarding Transfer of Servicing.
On
or
before each Transfer Date the Owner shall use its Best Efforts to cause the
Prior Servicer to effectuate and evidence the transfer of the servicing of
the
related Mortgage Loans from the Prior Servicer to the Servicer including the
following:
(a)
Notice
to Mortgagors.
The
Owner shall use its Best Efforts to cause the Prior Servicer to mail to the
Mortgagor of each Mortgage a letter advising the Mortgagor of the transfer
of
the servicing thereof to the Servicer, in accordance with the relevant
provisions of the Xxxxxxxx-Xxxxxxxx National Affordable Housing Act of 1990,
as
the same may be amended from time to time, and the regulations provided in
accordance with the Real Estate Settlement Procedures Act. The Owner shall
use
its Best Efforts to cause the Prior Servicer to promptly provide the Servicer
with copies of all such notices.
-15-
(b)
Notice
to Taxing Authorities and Insurance Companies and HUD (if
applicable).
The
Owner shall use its Best Efforts to cause the Prior Servicer to transmit to
the
applicable taxing authorities and insurance companies (including PMI Policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Servicer and instructions to deliver all notices, tax bills
and
insurance statements, as the case may be, to the Servicer from and after the
related Transfer Date. The Owner shall use its Best Efforts to cause the Prior
Servicer to promptly provide the Servicer with copies of all such notices.
With
respect to FHA Loans, in addition to the requirements set forth above, the
Owner
shall use its Best Efforts to cause the Prior Servicer to provide notice to
HUD
on HUD Form 92080 or such other form prescribed by HUD.
(c)
Delivery
of Servicing Records.
The
Owner shall use its Best Efforts to cause the Prior Servicer to forward to
the
Servicer all Servicing Files and any other Mortgage Loan documents in the Prior
Servicer’s possession relating to each Mortgage Loan.
(d)
Escrow
Payments.
The
Owner shall use its Best Efforts to cause the Prior Servicer to provide the
Servicer with immediately available funds by wire transfer in the amount of
the
net Escrow Payments and suspense balances and all loss draft balances associated
with the Mortgage Loans. The Owner shall use its Best Efforts to cause the
Prior
Servicer to provide the Servicer with an accounting statement of Escrow Payments
and suspense balances and loss draft balances sufficient to enable the Servicer
to reconcile the amount of such payment with the accounts of the Mortgage Loans.
Additionally, the Owner shall use its Best Efforts to cause the Prior Servicer
to wire the Servicer the amount of any agency or trustee Mortgage Loan payments,
any prepaid Mortgage Loan payments and all other similar amounts held by the
Prior Servicer.
(e)
Payoffs
and Assumptions.
The
Owner shall use its Best Efforts to cause the Prior Servicer to provide to
the
Servicer copies of all assumption and payoff statements generated by the Prior
Servicer on the Mortgage Loans.
(f)
Mortgage
Payments Received Prior to Transfer Date.
The
Owner shall use its Best Efforts to cause the Prior Servicer to apply all
payments received by the Prior Servicer on each Mortgage Loan prior to the
related Transfer Date to the account of the particular Mortgagor.
(g)
Mortgage
Payments Received After Transfer Date.
The
Owner shall use its Best Efforts to cause the Prior Servicer to forward the
amount of any Monthly Payments received by the Prior Servicer after the related
Transfer Date to the Servicer by overnight mail on the date of receipt. The
Owner shall use its Best Efforts to cause the Prior Servicer to notify the
Servicer of the particulars of the payment, which notification requirement
shall
be satisfied if the Prior Servicer forwards with its payment sufficient
information to permit appropriate processing of the payment by the Servicer.
The
Owner shall use its Best Efforts to cause the Prior Servicer to assume full
responsibility for the necessary and appropriate legal application of Monthly
Payments received by the Prior Servicer after the related Transfer Date with
respect to 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 Servicer with the particulars of the payment such as the account
number, dollar amount, date received and any special Mortgagor application
instructions.
-16-
(h)
Reconciliation.
The
Owner shall use its Best Efforts to cause the Prior Servicer to, on or before
the related Transfer Date, reconcile principal balances and make any monetary
adjustments required by the Servicer. Any such monetary adjustments will be
transferred between the Prior Servicer and the Servicer as
appropriate.
(i) IRS
Forms.
The
Owner shall use its Best Efforts to cause the Prior Servicer to file all IRS
forms 1098, 1099, 1099A or 1041 and K-1, or any successor forms thereto, which
are required to be filed on or before the related Transfer Date in relation
to
the servicing and ownership of the Mortgage Loans for the current calendar
year.
The Owner shall use its Best Efforts to cause the Prior Servicer to provide
copies of such forms to the Servicer or the Mortgagors upon request and shall
use its Best Efforts to cause the Prior Servicer to reimburse the Servicer
for
any costs or penalties incurred by the Servicer due to the Prior Servicer’s
failure to comply with this paragraph.
(j) Tax
Service Contract or Flood Tracking Contract.
At the
time of the transfer of servicing by the Owner to the Servicer hereunder, the
Owner will insure that either: (i) the Prior Servicer transfers to the Servicer,
at the expense of the Owner or the Prior Servicer, any existing life of loan
tax
service contracts or flood tracking contracts; or (ii) in the event no such
contracts exist, then the Servicer shall cause such contracts to be put in
place. In the event of (ii) above, the Owner shall reimburse the Servicer for
the out-of-pocket expenses incurred by the Servicer in putting these tax service
contracts and flood tracking contracts in place.
Section
2.05. Custodial
Agreement.
With
respect to all Mortgage Loans which become subject to this Agreement, pursuant
to the related Custodial Agreement as identified in the related Confirmation
Agreement and related Acknowledgment Agreement, the Owner shall deliver and
release to the related Custodian on or prior to each Transfer Date those
Mortgage Loan documents required by the Custodial Agreement with respect to
each
Mortgage Loan, a list of which is set forth in Section 2 of the Custodial
Agreement. In the event of any conflict, inconsistency or discrepancy
between any of the provisions of this Agreement and any of the provisions of
the
Custodial Agreement, the provisions of this Agreement shall control and be
binding upon the Owner and the Servicer.
On
or
prior to each Transfer Date, the related Custodian shall have certified its
receipt of all Mortgage Loan documents required to be delivered pursuant to
the
Custodial Agreement, as evidenced by the trust receipt and initial certification
of the related Custodian in the form annexed to the Custodial Agreement. The
Owner shall be responsible for, as and when due, any and all initial document
review fees, initial and final certification fees and recertification fees
and
any costs associated with correcting any deficiencies identified in connection
with such review(s). The Owner shall be responsible for maintaining the
Custodial Agreement and shall pay all other fees and expenses of the related
Custodian including but not limited to, (i) any and all annual and warehousing
fees, (ii) any and all termination fees in the event the related Custodian
is
terminated by the Owner, except that the Servicer shall pay such termination
fees in the event the related Custodian is terminated pursuant to the Servicer’s
request and (iii) any and all fees due in connection with the deposit or
retrieval of a Mortgage Loan document or documents (collectively, the
“Custodial
Fees”).
With
respect to any Mortgage Loans which become subject to an Agency Transfer, upon
the request of the Servicer the Owner shall terminate the related Custodian
and
be responsible for any related termination fees; provided, however, that the
Servicer shall (A) appoint a successor custodian that meets the requirements
of
the related Reconstitution Agreement (such successor custodian may be the
Servicer if permitted under such Reconstitution Agreement) and (B) from and
after the date of such termination be responsible for any and all fees and
expenses of the successor custodian. Notwithstanding the foregoing, in the
event
that the Servicer acquires the Servicing Rights to any or all the Mortgage
Loans
pursuant to Section 7.01, all Custodial Fees associated with such Mortgage
Loans
shall be paid by the Servicer.
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The
Servicer shall forward to the related Custodian original documents evidencing
an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within one week of their
execution, provided, however, that the Servicer shall provide the related
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. If such copy
has
not been returned by the applicable recording office within sixty days of its
submission, the Servicer shall notify the Owner and the related Custodian of
such delinquency, demonstrating that the Servicer has used its Best Efforts
to
obtain such copy (the “Delinquent
Document”).
Upon
adequate demonstration of a Best Efforts attempt by the Servicer to obtain
the
Delinquent Document, the Owner shall, in its sole discretion, extend the time
period for the receipt of the Delinquent Document for a reasonable time period
by which it is reasonably expected that the Delinquent Document will be
received.
-18-
ARTICLE
III
SERVICING
OF THE MORTGAGE LOANS
Section
3.01 Servicer
to Service.
The
Servicer, as an independent contractor, shall service and administer the
Mortgage Loans from and after the related Transfer Date and shall have full
power and authority, acting alone, to do any and all things in connection with
such servicing and administration which the Servicer may deem necessary or
desirable, consistent with the terms of this Agreement and with Accepted
Servicing Practices, including taking all actions that a mortgagee is permitted
or required to take by the FHA or VA, with respect to FHA Loans and VA Loans,
as
the case may be. Except as set forth in this Agreement, the Servicer shall
service the Mortgage Loans in strict compliance with the servicing provisions
related to the FNMA MBS Program (Special Servicing Option) of the FNMA Guides,
which include, but are not limited to, provisions regarding the liquidation
of
Mortgage Loans, the collection of Mortgage Loan payments, the payment of taxes,
insurance and other charges, the maintenance of hazard insurance, the
maintenance of mortgage impairment insurance, the maintenance of a Fidelity
Bond
and Errors and Omissions Insurance, inspections, the restoration of Mortgaged
Property, the maintenance of PMI Policies, insurance claims, the title,
management and disposition of REO Property, permitted withdrawals with respect
to REO Property, REO reports, liquidation reports, and reports of foreclosures
and abandonments of Mortgaged Property, the transfer of Mortgaged Property,
the
release of Mortgage Loan documents, annual statements, and examination of
records and facilities. In the event of any conflict, inconsistency or
discrepancy between any of the servicing provisions of this Agreement and any of
the servicing provisions of the FNMA Guides, the provisions of this Agreement
shall control and be binding upon the Owner and the Servicer.
It
is
understood and agreed that the Owner shall approve all foreclosures for which
approval would be necessary by the Applicable Agency prior to the commencement
of any foreclosure proceedings and that the Owner must approve any and all
advances with respect to foreclosures made by the Servicer in excess of 20%
of
the outstanding principal balance of the applicable Mortgage Loan. In the event
that Owner does not disapprove of any such advance or foreclosure within three
(3) days of receipt of notice of such advance or foreclosure, then the Owner
is
deemed to have approved such advance or foreclosure.
Notwithstanding
the foregoing paragraph, the Owner and the Servicer hereby agree as
follows:
(a) As
per
the terms of the applicable Acknowledgment Agreement, either (i) the Owner
or
the Owner’s designee or (ii) the Servicer, for an Assignment Fee, shall (A)
prepare or cause to be prepared all Assignments of Mortgage, (B) record or
cause
to be recorded all Assignments of Mortgage, (C) shall pay the recording costs
associated with the Mortgage Loans associated with this Acknowledgment Agreement
and/or (D) shall track such Assignments of Mortgage to ensure they have been
recorded for the Assignment Fee set forth on the applicable Acknowledgment
Agreement.
-19-
(b) The
Servicer shall, in accordance with the relevant provisions of the
Xxxxxxxx-Xxxxxxxx National Affordable Housing Act of 1990, as the same may
be
amended from time to time, and the regulations provided in accordance with
the
Real Estate Settlement Procedures Act, provide notice to the Mortgagor of each
Mortgage of the transfer of the servicing thereto to the Servicer.
(c) The
Servicer shall be responsible for the preparation and costs associated with
notifications to Mortgagors of the assumption of servicing by the
Servicer.
(d) The
Owner
shall retain all Ancillary Income.
Prior
to
a Mortgage Loan becoming subject to a Reconstitution Agreement and consistent
with the terms of this Agreement, the Servicer may (i) waive, modify or vary
any
term of any Mortgage Loan or (ii) consent to the postponement of strict
compliance with any such term or (iii) in any manner grant indulgence to any
Mortgagor, if such modification would not require the notification to and/or
consent by the Applicable Agency, without the prior consent of the Owner. Where
such notification to and/or consent by the Applicable Agency is required for
any
such modification, the Servicer must first obtain the prior written consent
of
the Owner before making such modification. In the event that the Owner does
not
disapprove of any such modification within three (3) days of receipt of a
request for consent to such modification, then the Owner is deemed to have
consented to such modification. Notwithstanding the foregoing, once a Mortgage
Loan becomes subject to a Reconstitution Agreement, the Servicer may not (i)
waive, modify or vary any term of any Mortgage Loan or (ii) consent to the
postponement of strict compliance with any such term or (iii) in any manner
grant indulgence to any Mortgagor without first obtaining the prior written
consent of the applicable Persons required thereunder.
Without
limiting the generality of the foregoing, the Servicer shall continue, and
is
hereby authorized and empowered, to execute and deliver on behalf of itself
and
the Owner, 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 Servicer, the Owner shall furnish the Servicer with any powers
of attorney and other documents necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this
Agreement.
In
servicing and administering the FHA Loans and VA Loans, the Servicer shall
comply strictly with the National Housing Act and the FHA Regulations, the
Servicemen’s Readjustment Act, the VA Regulations and administrative guidelines
issued thereunder or pursuant thereto, and, to the extent permitted hereunder,
promptly discharge all of the obligations of the mortgagee thereunder and under
each Mortgage including the payment of any fees, premiums and charges and the
timely giving of notices.
-20-
In
servicing and administering the Mortgage Loans, the Servicer shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
the FNMA Guides, the FHA Regulations and the VA Regulations, and the Owner’s
reliance on the Servicer.
Section
3.02 Collection
of Mortgage Loan Payments.
Continuously
from the related Transfer Date until the date each Mortgage Loan ceases to
be
subject to this Agreement, the Servicer 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 and payable with respect
to
the Mortgage Loans and each related 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
3.03 Establishment
of and Deposits to Custodial Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to
the Mortgage Loans separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts, at
the
direction of the Owner in the form of time deposit or demand accounts, titled
“Aurora Loan Services Inc., in trust for Xxxxxx Brothers Bank, FSB, owner of
Residential Mortgage Loans, Group No. _____________, and various Mortgagors”.
The Custodial Account shall be established with a Qualified Depository. Any
funds deposited in the Custodial Account shall be invested at the direction
of
the Owner or if no direction is given at the discretion of the Servicer in
Eligible Investments subject to the provisions of Section 3.10 hereof. Funds
deposited in the Custodial Account may be drawn on by the Servicer in accordance
with Section 3.04. The creation of any Custodial Account shall be evidenced
by a
letter agreement substantially in the form of Exhibit C. A copy of such
certification or letter agreement shall be furnished to the Owner and, upon
request, to any subsequent owner of the Mortgage Loans.
The
Servicer shall deposit in the Custodial Account on a daily basis, and retain
therein, the following collections received by the Servicer and payments made
by
the Servicer after the related Transfer Date:
(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;
-21-
(iv)
all
Insurance Proceeds;
(v)
all
Ancillary Income;
(vi)
all
Condemnation Proceeds that are not applied to the restoration or repair of
the
Mortgaged Property or released to the Mortgagor;
(vii)
any
amount required to be deposited in the Custodial Account;
(viii)
any
amounts required to be deposited by the Servicer in connection with the
deductible clause in any blanket hazard insurance policy; and
(ix)
any
amounts received with respect to or related to any REO Property or REO
Disposition Proceeds.
Any
interest paid on funds deposited in the Custodial Account by the depository
institution shall accrue to the benefit of the Owner and the Servicer shall
be
entitled to withdraw such interest from the Custodial Account and remit such
interest to the Owner pursuant to Section 3.04. Additionally, any other benefit
derived from the Custodial Account associated with the receipt, disbursement
and
accumulation of principal, interest, taxes, hazard insurance, mortgage
insurance, etc. shall accrue to the Servicer.
Section
3.04 Permitted
Withdrawals From Custodial Account.
The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(i)
to
make
payments to the Owner in the amounts and in the manner provided for in Section
4.01;
(ii)
in
the
event the Servicer has elected not to retain the Servicing Fee out of any
Mortgagor payments on account of interest or other recovery of interest with
respect to a particular Mortgage Loan (including late collections of interest
on
such Mortgage Loan, or interest portions of Insurance Proceeds or Liquidation
Proceeds) prior to the deposit of such Mortgagor payment or recovery in the
Custodial Account, to pay to itself the related Servicing Fee from all such
Mortgagor payments on account of interest or other such recovery for interest
with respect to that Mortgage Loan;
(iii)
to
pay to
the Owner accrued interest on funds deposited in the Custodial
Account;
(iv)
to
clear
and terminate the Custodial Account upon the termination of this Agreement;
(v)
to
transfer funds to another Qualified Depository in accordance with Section 3.10
hereof;
-22-
(vi)
to
invest
funds in certain Eligible Investments in accordance with Section 3.10 hereof;
and
(vii)
to
reimburse itself for any interest paid on escrowed funds to the Mortgagor
pursuant to Section 3.05 hereof.
(viii)
to
reimburse itself for the purpose of correcting any deposit of funds made in
error.
Section
3.05 Establishment
of and Deposits to Escrow Account.
The
Servicer 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 at the direction
of the Owner one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled, “Aurora Loan Services Inc., in trust for Xxxxxx Brothers Bank,
FSB, owner of Residential Mortgage Loans, Group No. _________, and various
Mortgagors”. The Escrow Accounts shall be established with a Qualified
Depository in a manner that shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Account may be drawn on by the
Servicer in accordance with Section 3.06. The creation of any Escrow Account
shall be evidenced by a letter agreement in the form of Exhibit D. A copy of
such certification or letter agreement shall be furnished to the Owner and,
upon
request, to any subsequent owner of the Mortgage Loans.
The
Servicer 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
Servicer shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 3.06.
The
Servicer shall 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. Additionally, any other benefit derived from
the Escrow Account associated with the receipt, disbursement and accumulation
of
principal, interest, taxes, hazard insurance, mortgage insurance, etc. shall
accrue to the Servicer. To the extent required by law, the Servicer 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.
-23-
Section
3.06 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Servicer
only:
(i)
to
effect
timely payments of ground rents, taxes, assessments, water rates, sewer rents,
mortgage insurance premiums, condominium charges, fire and hazard insurance
premiums or other items constituting Escrow Payments for the related
Mortgage;
(ii)
to
refund
to any Mortgagor any funds found to be in excess of the amounts required under
the terms of the related Mortgage Loan;
(iii)
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;
(iv)
for
application to restoration or repair of the Mortgaged Property in accordance
with the FNMA Guides;
(v)
for
transfer to the Custodial Account of fire and hazard insurance proceeds and
Escrow Payments with respect to any FHA Loan or VA Loan, where the FHA or the
VA, respectively, has directed application of funds as a credit against the
proceeds of the FHA Insurance Contract or VA Loan Guaranty Agreement;
(vi)
to
pay to
the Servicer, or any Mortgagor to the extent required by law, any interest
paid
on the funds deposited in the Escrow Account; and
(vii)
to
clear
and terminate the Escrow Account on the termination of this
Agreement.
(viii)
to
reimburse itself for the purpose of correcting any deposit of funds made in
error.
Section
3.07 Maintenance
of FHA Mortgage Insurance and VA Guaranty.
With
respect to FHA Loans and VA Loans, the Servicer shall maintain and keep the
FHA
Mortgage Insurance and the VA Guaranty, respectively, in full force and effect
throughout the term of this Agreement and discharge its obligations arising
out
of FHA Mortgage Insurance and the VA Guaranty Certificate. The Servicer hereby
agrees that it shall be liable to the Owner for any loss, liability or expense
incurred by the Owner by reason of any FHA Mortgage Insurance or VA Guaranty
being voided, reduced, released or adversely affected by reason of the
negligence or willful misconduct of the Servicer. The Servicer will service
and
administer the Mortgage Loans in accordance with the obligations of mortgagees
under the Act and the applicable regulations thereunder and under the
Servicemen’s Readjustment Act and VA Regulations and will discharge all
obligations of the mortgagee under each Mortgage Loan including, with respect
to
FHA Loans and VA Loans, paying all FHA and VA insurance premiums, fees or
charges, as required, and, subject to the right to assign the Mortgage Loan
to
the FHA or VA, as the case may be, will take all action reasonably necessary
to
preserve the lien of such Mortgage, including, the defense of actions to
challenge or foreclose such lien.
-24-
Section
3.08 Notification
of Adjustments.
With
respect to each Adjustable Rate Mortgage Loan, the Servicer shall adjust the
Mortgage Interest Rate on the related interest rate adjustment date and shall
adjust the Monthly Payment on the related mortgage payment adjustment date,
if
applicable, in compliance with the requirements of applicable law and the
related Mortgage and Mortgage Note. The Servicer shall execute and deliver
any
and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
Monthly Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Owner such notifications and any additional applicable
data regarding such adjustments and the methods used to calculate and implement
such adjustments. Upon the discovery by the Servicer or the receipt of notice
from the Owner that the Servicer has failed to adjust a Mortgage Interest Rate
or Monthly Payment in accordance with the terms of the related Mortgage Note,
the Servicer shall immediately deposit in the Custodial Account from its own
funds the amount of any interest loss or deferral caused the Owner
thereby.
Section
3.09 Completion
and Recordation of Assignments of Mortgage and FHA
and VA Change Notices.
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 (subject
to Section 3.01(a)) at either the Servicer’s, Owner’s or its designee’s expense.
At the Owner’s direction, the Servicer shall cause the endorsements on the
Mortgage Note, the Assignments of Mortgage (subject to Section 3.01(a)), the
assignment of security agreement and the HUD form 92080 Mortgage Record Change
with respect to all FHA Loans to be completed, and shall give notice to the
VA
of a transfer of insurance credits, if applicable, with respect to VA Loans
on
the form prescribed by the VA.
Section
3.10 Protection
of Accounts.
The
Servicer 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 Owner, which consent shall not be withheld
unreasonably.
The
Servicer shall bear any expenses, losses or damages sustained by the Owner
if
the Custodial Account and/or the Escrow Account are not demand deposit
accounts.
-25-
Amounts
on deposit in the Custodial Account and the Escrow Account may at the option
of
the Servicer 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
Servicer shall be obligated to invest the excess amount over the Insured Amount
in Eligible Investments as directed by the Owner or if no direction is given
as
selected by the Servicer in its discretion 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 one day prior to the
Remittance 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 Servicer) that maintains the Custodial Account or
the
Escrow Account, then such Eligible Investment may mature on such Remittance
Date. Any such Eligible Investment shall be made in the name of the Servicer
in
trust for the benefit of the Owner. All income on or gain realized from any
such
Eligible Investment shall be for the benefit of the Owner and may be withdrawn
at any time by the Owner. Any losses incurred in respect of any such investment
shall be deposited in the Custodial Account or the Escrow Account, by the
Servicer out of its own funds immediately as realized.
Section
3.11 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 such
name as the Owner may designate, or in the event the Owner 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 Servicer 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 Owner shall acknowledge in writing
that such title is being held as nominee for the Owner.
The
Servicer shall manage, conserve, protect and operate each REO Property for
the
Owner solely for the purpose of its prompt disposition and sale. The Servicer,
either itself or through an agent selected by the Servicer, shall manage,
conserve, protect and operate the REO Property in the same manner that it
manages, conserves, protects and operates other foreclosed property for its
own
account, and in the same manner that similar property in the same locality
as
the REO Property is managed. The Servicer shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except
as
otherwise provided below) on such terms and conditions as the Servicer deems
to
be in the best interest of the Owner.
The
Servicer 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 three years after
title has been taken to such REO Property, unless (a) a REMIC election has
not
been made with respect to the arrangement under which the Mortgage Loans and
the
REO Property are held, and (b) the Servicer determines, and gives an appropriate
notice to the Owner to such effect, that a longer period is necessary for the
orderly liquidation of such REO Property. If a period longer than two years
is
permitted under the foregoing sentence and is necessary to sell any REO
Property, (i) the Servicer shall report monthly to the Owner as to the progress
being made in selling such REO Property and (ii) if, with the written consent
of
the Owner, a purchase money mortgage is taken in connection with such sale,
such
purchase money mortgage shall name the Servicer as mortgagee, and such purchase
money mortgage shall not be held pursuant to this Agreement, but instead a
separate participation agreement among the Servicer and Owner shall be entered
into with respect to such purchase money mortgage. Notwithstanding anything
herein to the contrary, the Servicer shall not be required to provide financing
for the sale of any REO Property.
-26-
The
Servicer 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.
Subject
to the approval of the Owner as described in this paragraph, the disposition
of
REO Property shall be carried out by the Servicer at such price, and upon such
terms and conditions, as the Servicer deems to be in the best interests of
the
Owner. Prior to acceptance by the Servicer of an offer to sell any REO Property,
the Servicer shall notify the Owner of such offer in writing which notification
shall set forth all material terms of said offer (each a “Notice of Sale”). The
Owner shall be deemed to have approved the sale of any REO Property unless
the
Owner notifies the Servicer in writing, within 1 Business Day after its receipt
of the related Notice of Sale, that it disapproves of the related sale. With
respect to any REO Property, upon a REO Disposition, the Servicer shall be
entitled to retain from REO Disposition Proceeds a disposition fee as may be
set
forth in a separate letter agreement substantially in the form of Exhibit J
hereto. The proceeds of sale of the REO Property shall be promptly deposited
in
the Custodial Account. After the expenses of such disposition shall have been
paid, the Servicer shall submit a reasonably detailed invoice for reimbursement
of Servicing Advances it incurred thereunder. Such invoice shall be submitted
in
accordance with Section 5.02 hereof.
The
Servicer 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 the FNMA Guides. The Servicer
shall
make monthly distributions on each Remittance Date to the Owner of the net
cash
flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in this Section 3.11 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section
3.12 Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 4.02, the Servicer shall
furnish to the Owner 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 Servicer’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 Owner shall reasonably request.
-27-
ARTICLE
IV
PAYMENTS
TO OWNER
Section
4.01 Remittances.
On
each
Remittance Date the Servicer shall remit by wire transfer of immediately
available funds to the Owner 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 3.04).
With
respect to any remittance received by the Owner after the Business Day on which
such payment was due, the Servicer shall pay to the Owner interest on any such
late payment at an annual rate equal to the Prime Rate, adjusted as of the
date
of each change, plus two 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 Servicer on the date such late payment is made
and
shall cover the period commencing with the day following such 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 Servicer of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event
of
Default by the Servicer.
Section
4.02 Statements
to Owner.
Not
later
than the Remittance Date, the Servicer shall furnish to the Owner (a) a monthly
remittance advice containing such information in the form as shall be required
by the Owner as to the accompanying remittance and the period ending on the
preceding Determination Date and (b) all such information required pursuant
to
clause (a) above on a magnetic tape or other similar media reasonably acceptable
to Owner. Additionally, the Servicer will only be required to provide to the
Owner, or any other party which may have an interest in or require information
on Mortgage Loans being serviced pursuant to the Agreement, such information
as
is reasonably available to the Servicer or which is considered to be reasonable
in the context of Accepted Servicing Practices.
In
addition, not more than 60 days after the end of each calendar year, commencing
December 31, 1999, the Servicer shall furnish to each Person who was an Owner
of
the Mortgage Loans at any time during such calendar year as required by
applicable law or if not required by applicable law, at the request of the
Owner
as to the aggregate of remittances for the applicable portion of such
year.
Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Servicer
pursuant to any requirements of the Internal Revenue Code as from time to time
are in force.
Beginning
with calendar year 2000, the Servicer shall prepare and file any and all tax
returns, information statements or other filings for the portion of the tax
year
1999 and the portion of subsequent tax years for which the Servicer has serviced
some or all of the Mortgage Loans hereunder as such returns, information
statements or other filings are required to be delivered to any governmental
taxing authority or to the Owner pursuant to any applicable law with respect
to
the Mortgage Loans and the transactions contemplated hereby. In addition, the
Servicer shall provide the Owner with such information concerning the Mortgage
Loans as is necessary for the Owner to prepare its federal income tax return
as
the Owner may reasonably request from time to time.
-28-
Section
4.03 Monthly
Advances by Servicer.
Subject
to Section 7.03, the Servicer shall have no obligation to advance any amounts
constituting delinquent principal and interest payments with respect to the
Mortgage Loans.
-29-
ARTICLE
V
GENERAL
SERVICING PROCEDURES
Section
5.01 Servicing
Compensation.
As
consideration for servicing the Mortgage Loans subject to this Agreement, the
Servicer shall retain the relevant Servicing Fee for each Mortgage Loan
remaining subject to this Agreement during any month. Such Servicing Fee shall
be payable monthly.
The
Servicer 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.
In
addition to the servicing compensation that the Servicer shall receive pursuant
to this Section 5.01, the Owner reserves the right, but not the obligation,
to
pay to the Servicer, in the Owner’s sole discretion, an incentive fee based upon
the quality level at which the Servicer performs its obligations pursuant to
this Agreement. Such incentive fee shall be payable, if any, in an amount and
at
a time specified by the Owner in its sole discretion.
Section
5.02 Reimbursement
of Servicing Advances.
The
Owner
shall reimburse the Servicer for Servicing Advances on a daily basis on demand
provided that the Servicer shall provide within 10 Business Days thereof
reasonably detailed written invoices for any such Servicing Advances along
with
reasonably detailed supporting documentation in connection therewith. The
Servicer may deliver such invoices and documentation, upon the request of the
Owner, at the time it delivers statements to the Owner in accordance with
Section 4.02 hereof.
-30-
ARTICLE
VI
REPRESENTATIONS,
WARRANTIES
AND
AGREEMENTS
Section
6.01. Representations,
Warranties and Agreements of the Servicer.
The
Servicer, as a condition to the consummation of the transactions contemplated
hereby, hereby makes the following representations and warranties to the Owner
as of each Transfer Date:
(a) Due
Organization and Authority.
The
Servicer is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and has all licenses necessary to carry
on its business as now being conducted and is licensed, qualified and in good
standing in each state 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 Servicer, and in any event the Servicer is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the terms of this Agreement; the Servicer has the full power
and authority 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
Servicer 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 Servicer and all requisite action has been taken
by the Servicer to make this Agreement valid and binding upon the Servicer
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 Servicer;
(c) No
Conflicts.
Neither
the execution and delivery of this Agreement, the acquisition of the servicing
responsibilities by the Servicer 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 Servicer’s organizational documents or any legal
restriction or any agreement or instrument to which the Servicer 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 Servicer or its property
is
subject, or impair the ability of the Servicer to service the Mortgage Loans,
or
impair the value of the Mortgage Loans;
(d) Ability
to Perform.
The
Servicer 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;
-31-
(e) No
Litigation Pending.
There
is no action, suit, proceeding or investigation pending or, to the Servicer's
knowledge, threatened against the Servicer which, either in any one instance
or
in the aggregate would be reasonably likely to impair materially the ability
of
the Servicer to carry on its business substantially as now conducted or to
perform under the terms of this Agreement;
(f) 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 Servicer
of
or compliance by the Servicer with this Agreement which has not been obtained;
(g) Ability
to Service.
The
Servicer is an FHA Approved Mortgagee, a VA Approved Lender and an approved
seller/servicer of conventional residential mortgage loans for FNMA, FHLMC
or
GNMA, with the facilities, procedures, and experienced personnel necessary
for
the sound servicing of mortgage loans of the same type as the Mortgage Loans.
The Servicer is in good standing to service mortgage loans for the FHA and
the
VA and either FNMA, FHLMC or GNMA;
(h) No
Commissions to Third Parties.
The
Servicer has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other than
the Owner.
Section
6.02. Remedies
for Breach of Representations and Warranties of the Servicer.
It
is
understood and agreed that the representations and warranties set forth in
Section 6.01 shall survive the engagement of the Servicer to perform the
servicing responsibilities as of each Transfer Date hereunder and the delivery
of the Servicing Files to the Servicer and shall inure to the benefit of the
Owner. Upon discovery by either the Servicer or the Owner of a breach of any
of
the foregoing representations and warranties which materially and adversely
affects the ability of the Servicer to perform its duties and obligations under
this Agreement or otherwise materially and adversely affects the value of the
Mortgage Loans, the Mortgaged Property or the priority of the security interest
on such Mortgaged Property or the interest of the Owner, the party discovering
such breach shall give prompt written notice to the other.
Within
60
days of the earlier of either discovery by or notice to the Servicer of any
breach of a representation or warranty set forth in Section 6.01 which
materially and adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Mortgage Loans, the Mortgaged Property or
the
priority of the security interest on such Mortgaged Property, the Servicer
shall
use its Best Efforts promptly to cure such breach in all material respects
and,
if such breach cannot be cured, the Servicer shall, at the Owner’s option,
assign the Servicer’s rights and obligations under this Agreement (or respecting
the affected Mortgage Loans) to a successor servicer, subject to the approval
of
the Owner, which approval shall be in the Owner’s sole discretion. Such
assignment shall be made in accordance with Sections 10.01 and
10.02.
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In
addition, the Servicer shall indemnify the Owner and hold it harmless against
any Costs resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Servicer representations
and
warranties contained in this Agreement. It is understood and agreed that the
remedies set forth in this Section 6.02 constitute the sole remedies of the
Owner respecting a breach of the foregoing representations and
warranties.
Any
cause
of action against the Servicer relating to or arising out of the breach of
any
representations and warranties made in Section 6.01 shall accrue upon (i)
discovery of such breach by the Servicer or notice thereof by the Owner to
the
Servicer, (ii) failure by the Servicer to cure such breach within the applicable
cure period, and (iii) demand upon the Servicer by the Owner for compliance
with
this Agreement.
Section
6.03. Representations
and Warranties of the Owner.
The
Owner, as a condition to the consummation of the transactions contemplated
hereby, makes the following representations and warranties to the Servicer
as of
each Transfer Date:
(a)
Due
Organization and Authority.
The
Owner is a federal savings bank duly organized, validly existing and in good
standing under the laws of the United States and has all licenses necessary
to
carry on its business as now being conducted; the Owner has the full corporate
power and authority to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this Agreement
by the Owner 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 Owner; and all requisite corporate action
has
been taken by the Owner to make this Agreement valid and binding upon the Owner
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 Owner;
(c)
No
Conflicts.
Neither
the execution and delivery of this Agreement, the conveyance of the servicing
responsibilities to the Servicer 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 Owner’s charter or by-laws or any legal
restriction or any agreement or instrument to which the Owner 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 Owner or its property is subject, or
impair the value of the servicing contract consummated hereby;
(d) Ability
to Perform.
The
Owner 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;
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(e) No
Litigation Pending.
There
is no action, suit, proceeding or investigation pending or, to the Owner's
knowledge, threatened against the Owner which, either in any one instance or
in
the aggregate, would be reasonably likely to impair materially the ability
of
the Owner to carry on its business substantially as now conducted or to perform
under the terms of this Agreement;
(f) 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 Owner of
or
compliance by the Owner with this Agreement, or if required, such approval
has
been obtained prior to each Transfer Date;
(g) Ownership.
The
Owner is the sole owner and holder of the Mortgage Loans. With respect to each
Mortgage Loan which becomes subject to this Agreement on a Transfer Date, the
servicing responsibilities contracted for as of the relevant Transfer Date
have
not been assigned or pledged, and, the Owner has good and marketable interest
therein, and has full right to transfer the servicing responsibilities to the
Servicer free and clear of any encumbrance, equity, interest, lien, pledge,
charge, claim or security interest, and has full right and authority subject
to
no interest, or agreement with, any other party, (other than any notice required
by law, regulation or otherwise, to be delivered to the Mortgagors) to assign
the servicing responsibilities pursuant to this Agreement; and
(h) No
Commissions to Third Parties.
The
Owner has not dealt with any broker or agent or anyone else who might be
entitled to a fee or commission in connection with this transaction other than
the Servicer.
Section
6.04. Remedies
for Breach of Representations and Warranties of the Owner.
It
is
understood and agreed that the representations and warranties set forth in
Section 6.03 shall survive the engagement of the Servicer to perform the
servicing responsibilities as of each Transfer Date and the delivery of the
Servicing Files to the Servicer and shall inure to the benefit of the Servicer.
Upon discovery by either the Servicer or the Owner of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the value of the servicing contract established herein or the interest of the
Servicer, the party discovering such breach shall give prompt written notice
to
the other.
Within
60
days of the earlier of either discovery by or notice to the Owner of any breach
of a representation or warranty set forth in Section 6.03 which materially
and
adversely affects the value of the servicing contract, the Owner shall use
its
Best Efforts promptly to cure such breach in all material respects.
The
Owner
shall indemnify the Servicer and hold it harmless against any Costs resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, (i) a breach of the Owner representations and warranties
contained in this Agreement; (ii) actions or omissions of a Prior Servicer;
and
(iii) the failure of the Owner to cause any event to occur which requires its
“Best Efforts” under this Agreement. It is understood and agreed that the
obligation of the Owner to indemnify the Servicer pursuant to this Section
6.04
constitutes the sole remedy of the Servicer respecting a breach of the foregoing
representation and warranties.
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Any
cause
of action against the Owner relating to or arising out of the breach of any
representations and warranties made in Section 6.03 shall accrue upon (i)
discovery of such breach by the Owner or notice thereof by the Servicer to
the
Owner, (ii) failure by the Owner to cure such breach within the applicable
cure
period, and (iii) demand upon the Owner by the Servicer for compliance with
this
Agreement.
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ARTICLE
VII
AGENCY
TRANSFER; WHOLE LOAN TRANSFER; PASS-THROUGH TRANSFER
Section
7.01. Removal
of Mortgage Loans from Inclusion Under this Agreement Upon an Agency Transfer,
a
Pass-Through Transfer or a Whole Loan Transfer on One or More Reconstitution
Dates.
The
Owner
and the Servicer agree that with respect to some or all of the Mortgage Loans,
from time to time the Owner may, in its sole discretion choose to reconstitute
a
portion or all of the Mortgage Loans effecting any of the
following:
|
(1)
|
An
Agency Transfer, and/or
|
|
(2)
|
A
Whole Loan Transfer, and/or
|
|
(3)
|
A
Pass-Through Transfer.
|
Subject
to Section 10.01, on the related Reconstitution Date, the Mortgage Loans
transferred shall cease to be covered by this Agreement, except with respect
to
the obligation to remit the Additional Remittance in accordance with the
provisions set forth herein and the right of the Owner to cause a transfer
of
the servicing responsibilities with respect to the Mortgage Loans and/or REO
Properties in accordance with Sections 7.07 and 7.08, respectively.
The
Servicer shall cooperate with the Owner in connection with any Agency Transfer,
Pass-Through Transfer or Whole Loan Transfer contemplated by the Owner pursuant
to this Section 7.01. In that connection, the Servicer shall (a) execute any
Reconstitution Agreement within a reasonable period of time after receipt
thereof which time shall be sufficient for the Servicer and Servicer’s counsel
to review such Reconstitution Agreement, but such time shall not exceed ten
(10)
Business Days after such receipt, and (b) provide to FNMA, FHLMC, GNMA, the
trustee or a third party purchaser, as the case may be, subject to any
Reconstitution Agreement and/or the Owner: (i) any and all information and
appropriate verification of information which may be reasonably available to
the
Servicer, whether through letters of its auditors and counsel or otherwise,
as
the Owner shall reasonably request; and (ii) such additional representations,
warranties, covenants, opinions of counsel, letters from auditors, and
certificates of public officials or officers of the Servicer as are reasonably
believed necessary by FNMA, FHLMC, GNMA, the trustee, such third party
purchaser, any master servicer, any rating agency or the Owner, as the case
may
be, in connection with such transactions. Prior to incurring any out-of-pocket
expenses pursuant to this paragraph, the Servicer shall notify the Owner in
writing of the estimated amount of such expense. The Owner shall reimburse
the
Servicer for any such expense following its receipt of appropriate details
thereof.
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In
accordance with Section 3.01(a) hereof, as per the terms of the applicable
Acknowledgment Agreement, either (i) the Owner or the Owner’s designee or (ii)
the Servicer, for an Assignment Fee, shall (A) prepare or cause to be prepared
and record or cause to be recorded all Assignments of Mortgage in blank from
the
then mortgagee of record, acceptable to FNMA, FHLMC, GNMA, the trustee or such
third party, as the case may be, for each Mortgage Loan that is part of an
Agency Transfer, Whole Loan Transfer or Pass-Through Transfer and shall pay
the
recording costs associated therewith and/or (B) shall track such Assignments
of
Mortgage to ensure they have been recorded and deliver them as required by
FNMA,
FHLMC, GNMA, the trustee or such third party, as the case may be, upon the
Servicer’s receipt thereof. Additionally, the Servicer shall prepare and
execute, at the direction of the Owner, any note endorsements in connection
with
any and all Reconstitution Agreements.
With
respect to FHA Loans, prior to the related Reconstitution Date, the Servicer
shall prepare a HUD form 92080 Mortgage Record Change for each FHA Loan. With
respect to each VA Loan, prior to the related Reconstitution Date, if
applicable, the Servicer shall give notice to the VA of a transfer of insurance
credits with respect thereto.
All
Mortgage Loans not sold or transferred pursuant to an Agency Transfer,
Pass-Through Transfer or Whole Loan Transfer 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.
Section
7.02. Additional
Indemnification by the Servicer; Third Party Claims.
The
Servicer shall indemnify the Owner and hold it harmless against any and all
Costs that the Owner may sustain in any way related to (i) the failure of the
Servicer to perform its duties and service the Mortgage Loans in material
compliance with the terms of this Agreement or any Reconstitution Agreement
entered into pursuant to Section 7.01 or (ii) the failure of the Servicer to
cause any event to occur which requires its “Best Efforts” under this Agreement.
The Servicer shall immediately notify the Owner 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 FNMA, FHLMC, GNMA, the trustee or other
relevant third party with respect to any claim made by a third party with
respect to any Reconstitution Agreement, assume (with the prior written consent
of the Owner) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Owner in respect
of
such claim and follow any written instructions received from the Owner in
connection with such claim. The Owner promptly shall reimburse the Servicer
for
all amounts advanced by it pursuant to the preceding sentence except when the
claim is in any way related to the Servicer’s indemnification pursuant to
Section 6.02, or the failure of the Servicer to service and administer the
Mortgage Loans in material compliance with the terms of this Agreement or any
Reconstitution Agreement. In the event a dispute arises between the Servicer
and
the Owner with respect to any of the rights and obligations of the parties
pursuant to this Agreement, and such dispute is adjudicated in a court of law,
by an arbitration panel or any other judicial process, then the losing party
shall indemnify and reimburse the winning party for all attorney’s fees and
other costs and expenses related to the adjudication of said
dispute.
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Section
7.03 Monthly
Advances, Compensating Interest and Servicing Fees after
Reconstitution.
Notwithstanding
anything contained herein to the contrary, in connection with (a) a Pass-Through
Transfer, the Servicer shall make Monthly Advances through the Remittance Date
immediately preceding the distribution of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the related Mortgage Loans or such earlier time period as set
forth in the related Reconstitution Agreement, (b) an Agency Transfer, the
Servicer shall make Monthly Advances as required by FNMA, FHLMC or GNMA, as
applicable, and (c) a Whole Loan Transfer, the Servicer shall make Monthly
Advances through the Remittance Date immediately preceding the date that such
Mortgage Loan becomes REO Property, or through such other period of time as
may
be set forth in the Servicing Agreement governing such Whole Loan Transfer.
Notwithstanding
anything contained herein to the contrary, in connection with a Reconstitution
Agreement, the Servicing Fee as set forth on the applicable Acknowledgment
Agreement and/or Confirmation Agreement of each reconstituted Mortgage Loan
shall be changed upon reconstitution to the Reconstituted Servicing
Fee.
Notwithstanding
anything contained herein to the contrary, following a Reconstitution Agreement,
with respect to each Principal Prepayment of reconstituted Mortgage Loans,
the
Servicer shall deposit in the Custodial Account on a daily basis, and retain
therein the Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Servicer’s own funds, without
reimbursement therefor;
Section
7.04 Maintenance
of Custodial and Escrow Accounts after Reconstitution.
Notwithstanding
anything herein to the contrary, in connection with (a) a Pass-Through Transfer,
the Servicer shall maintain Custodial Accounts and Escrow Accounts in accordance
with the related master servicer’s requirements, and pursuant to the related
Reconstitution Agreement, (b) an Agency Transfer, the Servicer shall maintain
Custodial Accounts and Escrow Accounts in accordance with the requirements
of
FNMA, FHLMC or GNMA, as applicable, and (c) a Whole Loan Transfer, the Servicer
shall maintain Custodial Accounts and Escrow Accounts in accordance with terms
that are substantially similar to the terms of this Agreement. For purposes
of
this paragraph, the obligation to maintain Custodial Accounts and Escrow
Accounts includes the obligation of the Servicer to remove amounts from such
accounts that exceed the amount fully insured by the FDIC, if required by the
applicable investor. In connection with any Pass-Through Transfer, Agency
Transfer, or Whole Loan Transfer the Servicer shall be obligated to maintain
the
related Custodial Accounts and Escrow Accounts with such institutions required
by the applicable investor, which institutions might not include the
Servicer.
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Section
7.05. Owner’s
Repurchase and Indemnification Obligations.
Upon
receipt by the Servicer of notice from FNMA, FHLMC, GNMA or other such third
party purchaser of a breach of any Owner representation or warranty contained
in
any Reconstitution Agreement or a request by FNMA, FHLMC, GNMA, the trustee
or
such third party purchaser, as the case may be, for the repurchase of any
Mortgage Loan transferred to FNMA, FHLMC or GNMA pursuant to an Agency Transfer
or to a trustee pursuant to a Pass-Through Transfer or to a third party
purchaser pursuant to a Whole Loan Transfer, the Servicer shall promptly notify
the Owner of same and shall, at the direction of the Owner, use its Best Efforts
to cure and correct any such breach and to satisfy the requests or concerns
of
FNMA, FHLMC, GNMA, the trustee or the third party purchaser related to such
deficiencies of the related Mortgage Loans transferred to FNMA, FHLMC, GNMA,
the
trustee or other such third party purchaser.
The
Owner
shall repurchase from the Servicer any Mortgage Loan transferred to FNMA, FHLMC
or GNMA pursuant to an Agency Transfer or to a trustee pursuant to a
Pass-Through Transfer or to a third party purchaser pursuant to a Whole Loan
Transfer with respect to which the Servicer has been required by FNMA, FHLMC,
GNMA, the trustee or such third party purchaser to repurchase due to a breach
of
a representation or warranty made by the Owner with respect to the Mortgage
Loans, or the servicing thereof prior to the related Transfer Date to FNMA,
FHLMC, GNMA, the trustee or any third party purchaser in any Reconstitution
Agreement and not due to a breach of the Servicer’s obligations thereunder or
pursuant to this Agreement. The repurchase price to be paid by the Owner to
the
Servicer shall equal that repurchase price paid by the Servicer to FNMA, FHLMC,
GNMA, the trustee or the third party purchaser plus all reasonable costs and
expenses borne by the Servicer in connection with the cure of said breach of
a
representation or warranty made by the Owner and in connection with the
repurchase of such Mortgage Loan from FNMA, FHLMC, GNMA, the trustee or the
third party purchaser, including, but not limited to, reasonable and necessary
attorneys’ fees.
At
the
time of repurchase, the Custodian and the Servicer shall arrange for the
reassignment of the repurchased Mortgage Loan to the Owner according to the
Owner’s instructions and the delivery to the Custodian of any documents held by
FNMA, FHLMC, GNMA, the trustee or other relevant third party purchaser with
respect to the repurchased Mortgage Loan pursuant to the related Reconstitution
Agreement. In the event of a repurchase, the Servicer shall, simultaneously
with
such reassignment, give written notice to the Owner that such repurchase has
taken place, and amend the Mortgage Loan Schedule to reflect the addition of
the
repurchased Mortgage Loan to this Agreement. In connection with any such
addition, the Servicer and the Owner shall be deemed to have made as to such
repurchased 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 repurchase.
Section
7.06. Termination
Fees after Reconstitution.
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The
Servicer and the Owner hereby agree and acknowledge that the Owner is the sole
owner of the Servicing Rights. In the event that any Reconstitution Agreement
provides for a payment of a termination fee (a “Reconstituted
Termination Fee”)
to the
Servicer upon the termination of the Servicer as the servicer or as the
applicable “seller/servicer” thereunder, the Servicer shall (a) notify the
Owner, in writing, upon receipt of notice that the Servicer will be terminated
as servicer or “seller/servicer” under such Reconstitution Agreement, and (b)
promptly remit to the Owner by wire transfer of immediately available funds
the
amount of the related Reconstituted Termination Fee if it is received by the
Servicer. Upon receipt by the Owner of the Reconstituted Termination Fee, the
Owner shall remit to the Servicer, within 10 Business Days, the applicable
Termination Fee due to the Servicer, if any, pursuant to Section 9.02 hereof.
In
addition, the Servicer shall not modify, amend or waive the right to receive
a
Reconstituted Termination Fee under any Reconstitution Agreement without first
obtaining the written consent of the Owner which consent may be withheld by
the
Owner in its sole discretion. The provisions of this Section 7.06 shall survive
the termination of this Agreement.
Section
7.07. Additional
Remittance.
From
the
applicable Reconstituted Servicing Fee, the Servicer shall retain an amount
equal to the Servicing Fee and shall remit the Additional Remittance to the
Owner on the Additional Remittance Date. In connection therewith, the Owner
and
the Servicer shall agree upon a mutually acceptable monthly report to be sent
to
the Owner or its assigns thereof on or prior to the related Additional
Remittance Date. The right to receive the Additional Remittance shall be freely
transferable by the Owner and shall be secured by a collateral pledge of the
servicing rights associated with the Mortgage Loans being
reconstituted.
On
each
Reconstitution Date, the Owner and the Servicer hereby agree to execute a
Collateral Pledge and Security Agreement in form and substance reasonably
acceptable to both the Owner and the Servicer and such other agreements and
UCC-1’s as shall reasonably be required to perfect the Owner’s security interest
with respect to the servicing rights related to the Mortgage Loans being
reconstituted.
With
respect to the Mortgage Loans subject to one or more Agency Transfers, Whole
Loan Transfers or Pass-Through Transfers, in the event that any party to the
Reconstitution Agreement other than the Owner disapproves or terminates the
Servicer and selects another servicer to replace the Servicer, then from and
after the date of substitution, neither the Servicer nor any successor servicer
hereunder shall be under any obligation to remit to the Owner or its assigns
any
Additional Remittance accruing after the date of substitution. Notwithstanding
the foregoing, in the event that the Servicer is terminated without cause under
any Reconstitution Agreement, the Owner shall be entitled to receive the sum
of
all fees, amounts or compensation received by the Servicer under the applicable
Reconstitution Agreement in connection with a termination without cause.
Additionally, in the event that the Servicer is terminated as a consequence
of a
breach under any applicable Reconstitution Agreement, the Servicer shall be
liable to the Owner for any actual and consequential damages which the Owner
may
sustain as a consequence of any such termination; provided, however, that the
Servicer shall not be obligated to pay such damages to the Owner if the
Servicer’s termination is directly related to the quality or suitability of the
Mortgage Loans subject to any Reconstitution Agreement. In the event that the
Servicer judicially contests any termination under a Reconstitution Agreement
as
a wrongful termination thereunder, the Servicer shall not be obligated to pay
damages to the Owner until such time as a judicial determination on such claim
is made, provided that the Servicer shall diligently pursue such claim. In
the
event that the Servicer continues to receive its Servicing Fee under a
Reconstitution Agreement during the time in which it is contesting a termination
as wrongful, the Servicer shall continue to be obligated to pay the Additional
Remittance to the Owner. Notwithstanding the fact that the Servicer’s obligation
to pay damages if it contests a termination under a Reconstitution Agreement
as
wrongful shall be delayed until a judicial determination is made, such damages
will nevertheless accrue as of the date of termination.
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Section
7.08. Transfer
of Servicing Following Reconstitution.
Following
a reconstitution of Mortgage Loans or REO Properties, the Owner shall have
the
right, in its sole discretion, to cause the Servicer at any time under any
Reconstitution Agreement to transfer the servicing responsibilities and duties
associated therewith to the Owner or any designee of the Owner; provided,
however, that (i) the Owner shall provide the Servicer with 30 days prior
written notice, (ii) such transfer shall be subject to the approval of the
Applicable Agency, trustee, master servicer or rating agency with respect to
Agency Transfers, Pass-Through Transfers or any relevant third party purchaser
with respect to Whole Loan Transfers, (iii) the costs associated with the
transfer of servicing pursuant to this Section 7.08 shall not be borne by the
Servicer and (iv) the Servicer shall be entitled to the Reconstituted
Termination Fee. The Servicer agrees to cooperate with the Owner in such
transfer of servicing responsibilities and shall comply with the termination
procedures set forth in Sections 9.01 and 10.01 hereof.
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ARTICLE
VIII
THE
SERVICER
Section
8.01. Merger
or Consolidation of the Servicer.
The
Servicer 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 entity 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 Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer,
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, provided, however, that the
successor or surviving Person shall be an institution (i) having a net worth
of
not less than $1,500,000, and (ii) which is a FNMA-, FHLMC-, and GNMA-approved
servicer in good standing and an FHA approved Mortgagee and a VA Approved
Lender.
Section
8.02 Limitation
on Liability of the Servicer and Others.
Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Owner 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 Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in 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. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of
any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Servicer 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 Servicer may, with the consent of the Owner, undertake any such action
which it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto. In such event, the Servicer shall
be
entitled to reimbursement from the Owner for the reasonable legal expenses
and
costs of such action.
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Section
8.03 Limitation
on Resignation and Assignment by the Servicer.
The
Owner
has entered into this Agreement with the Servicer and subsequent transferees
of
the Owner will purchase the Mortgage Loans in reliance upon the independent
status of the Servicer, 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
Servicer shall not assign this Agreement or the servicing responsibilities
hereunder or delegate its rights or duties hereunder or any portion hereof
or
sell or otherwise dispose of all or substantially all of its property or assets
without the prior written consent of the Owner, which consent shall be granted
or withheld in the sole discretion of the Owner.
The
Servicer shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Servicer and the Owner or upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion
of
Counsel to such effect delivered to the Owner which Opinion of Counsel shall
be
in form and substance acceptable to the Owner. No such resignation shall become
effective until a successor shall have assumed the Servicer’s responsibilities
and obligations hereunder in the manner provided in Section 10.01.
Without
in any way limiting the generality of this Section 8.03, in the event that
the
Servicer either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its duties hereunder or any portion thereof or sell or
otherwise dispose of all or substantially all of its property or assets, without
the prior written consent of the Owner, then the Owner shall have the right
to
terminate this Agreement upon notice given as set forth in Section 9.01, without
any payment of any penalty or damages and without any liability whatsoever
to
the Servicer or any third party.
-43-
ARTICLE
IX
TERMINATION
Section
9.01. Termination
for Cause.
(a) This
Agreement shall be terminable at the sole option of the Owner, if any of the
following events of default exist on the part of the Servicer:
(i) any
failure by the Servicer to remit to the Owner any payment required to be made
under the terms of this Agreement which continues unremedied for a period of
two
Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the
Owner; or
(ii) failure
by the Servicer duly to observe or perform in any material respect any other
of
the covenants or agreements on the part of the Servicer set forth in this
Agreement which continues unremedied for a period of 30 days; or
(iii) failure
by the Servicer to maintain its license to do business or service residential
mortgage loans in any jurisdiction where the Mortgaged Properties are 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 Servicer and such decree or order shall
have
remained in force undischarged or unstayed for a period of 60 days;
or
(v) the
Servicer 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 Servicer or of or
relating to all or substantially all of its property; or
(vi) the
Servicer shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency,
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
Servicer ceases to meet the qualifications of a FNMA, FHLMC or GNMA
lender/servicer or ceases to be an FHA Approved Mortgagee or ceases to be a
VA
Approved Lender; or
-44-
(viii) the
Servicer attempts, without the consent of the Owner, to assign the servicing
of
the Mortgage Loans or its right to servicing compensation hereunder or the
Servicer attempts, without the consent of the Owner, to sell or 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; or
(ix) the
Servicer fails to maintain a minimum net worth of $1,500,000.
In
each
and every such case, so long as an event of default shall not have been
remedied, in addition to whatever rights the Owner may have at law or equity
to
damages, including injunctive relief and specific performance, the Owner, by
notice in writing to the Servicer, may terminate all the rights and obligations
of the Servicer under this Agreement and in and to the servicing contract
established hereby and the proceeds thereof.
Upon
receipt by the Servicer of such written notice, all authority and power of
the
Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in a successor servicer appointed by
the
Owner. Upon written request from the Owner, the Servicer shall prepare, execute
and deliver to the successor entity designated by the Owner any and all
documents and other instruments, place in such successor’s possession all
Servicing 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 Servicer’s sole expense. The Servicer shall
cooperate with the Owner and such successor in effecting the termination of
the
Servicer’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 Servicer to the Custodial Account
or
Escrow Account or thereafter received with respect to the Mortgage
Loans.
By
a
written notice, the Owner may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
Section
9.02. Termination
Without Cause.
This
Agreement shall terminate upon: (i) the later of (a) the distribution of the
final payment or liquidation proceeds on the last Mortgage Loan to the Owner
(or
advances by the Servicer for the same), and (b) the disposition of all REO
Property acquired upon foreclosure of the last Mortgage Loan and the remittance
of all funds due hereunder, and (c) May 29, 2001 (the “Termination
Date”);
provided, however, that such Termination Date will be extended automatically
for
a period of one year, every year following the Termination Date unless 180
days
prior written notice is given by either party. Any such notice of termination
shall be in writing and delivered to the Servicer by registered mail to the
address set forth at the beginning of this Agreement. The Owner and the Servicer
shall comply with the termination procedures set forth in Sections 9.01 and
10.01 hereof. In the event that Servicer is terminated as servicer pursuant
Sections 7.06 (and otherwise not entitled to the Reconstituted Termination
Fee),
or 9.02(ii), it shall be entitled to a termination fee (the “Termination
Fee”)
equal
to the amount as set forth in Exhibit I.
-45-
ARTICLE
X
MISCELLANEOUS
PROVISIONS
Section
10.01 Successor
to the Servicer.
Simultaneously
with the termination of the Servicer’s responsibilities and duties under this
Agreement pursuant to Sections 6.02, 8.03, 9.01 or 9.02, the Owner shall (i)
succeed to and assume all of the Servicer’s responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in clauses (i) and (ii) of Section 8.01 and which
shall succeed to all rights and assume all of the responsibilities, duties
and
liabilities of the Servicer under this Agreement simultaneously with the
termination of the Servicer’s responsibilities, duties and liabilities under
this Agreement. Any successor to the Servicer shall be an FHA Approved Mortgagee
and a VA Approved Lender. In addition, with respect to all FHA Loans serviced
hereunder, the Servicer shall provide notice of such change in servicers to
HUD
on HUD form 92080 or such other form as prescribed by HUD, at least 10 days
after such transfer of servicing. In connection with such appointment and
assumption, the Owner may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree, provided, however, that no such compensation shall be in excess of that
permitted the Servicer under this Agreement without the consent of the Owner.
In
the event that the Servicer’s duties, responsibilities and liabilities under
this Agreement should be terminated pursuant to the aforementioned sections,
the
Servicer 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 Servicer pursuant to the aforementioned sections
shall not become effective until a successor shall be appointed pursuant to
this
Section 10.01 and shall in no event relieve the Servicer of the representations
and warranties made pursuant to Sections 6.01 and the remedies available to
the
Owner under Section 6.02 and 7.02, it being understood and agreed that the
provisions of such Sections 6.01, 6.02 and 7.02 shall be applicable to the
Servicer notwithstanding any such resignation or termination of the Servicer,
or
the termination of this Agreement.
Within
a
reasonable period of time, but in no event longer than 30 days of the
appointment of a successor entity by the Owner, the Servicer shall prepare,
execute and deliver to the successor entity any and all documents and other
instruments, place in such successor’s possession all Servicing 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 of the Mortgage Notes and related documents, and the
preparation and recordation of Assignments of Mortgage, at the discretion of
the
Owner and, at the Owner’s sole expense. The Servicer shall cooperate with the
Owner and such successor in effecting the termination of the Servicer’s
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor 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 Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Mortgage Loans.
-46-
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Servicer and to the Owner an instrument accepting such appointment, wherein
the successor shall make the representations and warranties set forth in Section
6.01, whereupon such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Servicer or termination of this Agreement
pursuant to Sections 6.02, 8.03, 9.01 or 9.02 shall not affect any claims that
the Owner may have against the Servicer arising out of the Servicer’s actions or
failure to act prior to any such termination or resignation.
The
Servicer shall deliver promptly to the successor servicer the funds in the
Custodial Account and Escrow Account and all Servicing Files, Mortgage Loan
documents and related documents and statements held by it hereunder and the
Servicer 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 Servicer.
Upon
a
successor’s acceptance of appointment as such, the Servicer shall notify by mail
the Owner of such appointment in accordance with the procedures set forth in
Section 10.06.
Section
10.02. Closing.
Each
closing for the engagement of the Servicer to perform the servicing
responsibilities respecting Mortgage Loans shall take place on the related
Transfer Date. At the Owner’s option, the closing shall be either: by telephone,
confirmed by letter or wire as the parties shall agree; or conducted in person,
at such place as the parties shall agree.
Each
closing shall be subject to each of the following conditions:
|
a)
|
all
of the representations and warranties of the Servicer and the Owner
under
this Agreement shall be true and correct as of each Transfer Date
and no
event shall have occurred which, with notice or the passage of time,
would
constitute a default under this
Agreement;
|
-47-
|
b)
|
the
Owner and Servicer each shall have received, or the Owner’s attorneys
shall have received in escrow, (i) with respect to the Initial
Transfer Date, all Closing Documents as specified in Section 10.03
hereof,
and (ii) with respect to all Transfer Dates, the Closing Documents
specified in (b), (c) and (i) of Section 10.03 hereof, in such forms
as
are agreed upon and acceptable to the Servicer and the Owner, duly
executed by all signatories as required pursuant to the respective
terms
thereof; and
|
|
c)
|
all
other terms and conditions of this Agreement shall have been complied
with
and no default or Event of Default under this Agreement shall have
occurred and be continuing for a period of 30 days or more prior
to the
related Transfer Date.
|
Section
10.03. Closing
Documents.
The
Closing Documents shall consist of fully executed originals of the following
documents:
|
a)
|
with
respect to the Initial Transfer Date, this
Agreement;
|
|
b)
|
with
respect to the Initial Transfer Date, the Mortgage Loan Schedule,
with one
copy to be attached to each counterpart of this Agreement as Exhibit
A,
and with respect to each subsequent Transfer Date, a Mortgage Loan
Schedule reflecting the additional Mortgage Loans to be serviced
by the
Servicer and a cumulative Mortgage Loan Schedule, reflecting all
Mortgage
Loans being serviced by the Servicer from the Initial Transfer Date
up to,
and including, the related subsequent Transfer
Date;
|
|
c)
|
with
respect to each subsequent Transfer Date, an Acknowledgment Agreement
in
the form of Exhibit B-1 hereto, and a Confirmation Agreement in the
form
of Exhibit B-2 hereto;
|
|
d)
|
with
respect to the Initial Transfer Date, a Custodial Account Letter
Agreement
in the form of Exhibit C hereto;
|
|
e)
|
with
respect to the Initial Transfer Date, an Escrow Account Letter Agreement
in the form of Exhibit D hereto;
|
|
f)
|
with
respect to the Initial Transfer Date, an Officer’s Certificate of the
Servicer, in the form of Exhibit E-1 hereto, including all attachments
thereto, and with respect to subsequent Transfer Dates, in the event
that
any item contained in the most recent Officer’s Certificate becomes untrue
or at the request of the Owner, an Officer’s Certificate in the form of
Exhibit E-2 hereto, including all attachments
thereto;
|
-48-
|
g)
|
an
Opinion of Counsel delivered following the Initial Transfer Date
upon the
request of the Owner, in the form of Exhibit G
hereto;
|
|
h)
|
with
respect to the Initial Transfer Date, a Custodial Agreement;
and
|
|
i)
|
with
respect to each Transfer Date, a trust receipt and initial certification
of the related Custodian, as required under the Custodial
Agreement.
|
Section
10.04. Costs.
The
Owner
shall pay any commissions due its salesmen and the legal fees and expenses
of
its attorneys. Costs and expenses incurred in connection with the transfer
of
the servicing responsibilities, including fees for delivering Servicing Files,
shall be paid by the Owner. Subject to Section 3.01(a) the Owner, its designee
or the Servicer shall pay the costs associated with the preparation, delivery
and recording of Assignments of Mortgages required on each Reconstitution
Date.
Section
10.05. Protection
of Confidential Information.
The
Servicer shall keep confidential and shall not divulge to any party, without
the
Owner’s prior written consent, the purchase price paid by the Owner for the
Mortgage Loans and any information pertaining to the Mortgage Loans or any
borrower thereunder, except to the extent that it is appropriate for the
Servicer to do so in working with legal counsel, auditors, taxing authorities
or
other governmental agencies.
Section
10.06. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if sent by facsimile or mailed by overnight
courier, addressed as follows (or such other address as may hereafter be
furnished to the other party by like notice):
(i) if
to the
Owner:
Xxxxxx
Brothers Bank, FSB
Contract
Finance Department
Three
World Financial Xxxxxx 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
-49-
Attention:
Manager, Contract Finance
Telecopier
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
(ii) if
to the
Servicer:
Aurora
Loan Services Inc.
0000
Xxxxx Xxxxxx Xxxx
Xxxxxx,
Xxxxxxxx 00000
Telecopier
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
Attention:
Xxxx Xxxxx
with
a
copy to:
Aurora
Loan Services Inc.
000
0xx
Xxxxxx
Xxxxxxxxxxx,
XX 00000
Telecopier
No: (000) 000-0000
Telephone
No: (000) 000-0000
Attention:
Servicing Manager
Any
such
demand, notice or communication hereunder shall be deemed to have been received
on the date delivered to or received at the premises of the addressee.
Section
10.07. Severability
Clause.
Any
part,
provision, representation or warranty of this Agreement which is prohibited
or
which is held to be void or unenforceable shall be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of
any
part, provision, representation or warranty of this Agreement shall deprive
any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this Agreement
without regard to such invalidity.
-50-
Section
10.08. No
Personal Solicitation.
From
and
after each related Transfer Date, the Servicer 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 Servicer’s behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan (on a targeted basis) for any purposes of prepayment, refinancing
or modification of the related Mortgage Loan, provided, however, that this
limitation shall not prohibit Servicer from soliciting such Mortgagor for
purposes of prepayment, refinance or modification of any loan owned or serviced
by Servicer other than a Mortgage Loan. It is understood and agreed that, among
other marketing activities, promotions undertaken by Servicer which are directed
to the general public at large or which are directed generally to a segment
of
the then existing customers of Servicer or any of its direct or indirect
subsidiaries (including, without limitation, the mailing of promotional
materials to Servicer’s deposit customers by inserting such materials into
customer account statements, mass mailings based on commercially acquired
mailing lists and newspaper, radio and television advertisements) shall not
constitute solicitation under this section. In the event the Servicer does
refinance any Mortgage Loan as a result of a violation of the requirements
set
forth in this Section 10.08, Servicer hereby agrees to pay to Owner an amount
equal to the difference, if any, between the amount that the Owner would have
received if it had sold the Mortgage Loan to a third party, and the proceeds
received by the Owner as result of such refinancing.
Section
10.09. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
Section
10.10. Place
of Delivery and Governing Law.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Owner in the State of New York and shall be deemed to have
been
made in the State of New York. The Agreement shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with the laws of
the
State of New York, except to the extent preempted by Federal law.
Section
10.11. Further
Agreements.
The
Owner
and the Servicer each agree to execute and deliver to the other such reasonable
and appropriate additional documents, instruments or agreements as may be
necessary or appropriate to effectuate the purposes of this
Agreement.
-51-
Section
10.12. Intention
of the Parties.
It
is the
intention of the parties that the Owner is conveying, and the Servicer is
receiving only a contract for servicing the Mortgage Loans. Accordingly, the
parties hereby acknowledge that the Owner remains the sole and absolute owner
of
the Mortgage Loans and all rights related thereto.
Section
10.13. Successors
and Assigns; Assignment of Servicing Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Servicer and the Owner and the respective successors and assigns of the Servicer
and the Owner. This Agreement shall not be assigned, pledged or hypothecated
by
the Servicer to a third party without the prior written consent of the Owner,
which consent shall be given at the sole discretion of the Owner.
Section
10.14. Waivers.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
Section
10.15. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
Section
10.16. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
-52-
(d) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the
words
“herein”, “hereof”, “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean by reason of enumeration.
Section
10.17. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section
10.18. Regulatory
Authorities.
The
Servicer will provide access, in accordance with applicable law, to any
documents or records generated or maintained by it in providing services to
the
Owner hereunder to any governmental authority having jurisdiction over the
Owner.
-53-
IN
WITNESS WHEREOF, the Servicer and the Owner have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first above written.
XXXXXX
BROTHERS BANK, FSB
(Owner)
By:
Name: Xxxx X. Xxxxxx
Title: Vice President
AURORA
LOAN SERVICES INC.
(Servicer)
By:
Name: Xxxxx X. Xxxxxx
Title:
-54-
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
(to
be
provided)
EXHIBIT
B-1
ACKNOWLEDGMENT
AGREEMENT
On
this
___ day of __________, 1999, Xxxxxx Brothers Bank, FSB (the “Owner”) as the
Owner under that certain Flow Servicing Agreement dated as of August 31, 1999,
(the “Agreement”), does hereby transfer to Aurora Loan Services Inc. (the
“Servicer”) as Servicer under the Agreement, the servicing responsibilities
related to the Mortgage Loans listed on the Mortgage Loan Schedule attached
hereto as Exhibit
A.
The
Servicer hereby accepts the servicing responsibilities transferred hereby and
on
the date hereof assumes all servicing responsibilities related to the Mortgage
Loans identified on the attached Mortgage Loan Schedule all in accordance with
the Agreement. The contents of each Servicing File required to be delivered
to
service the Mortgage Loans pursuant to the Agreement have been or shall be
delivered to the Servicer by the Owner in accordance with the terms of the
Agreement.
With
respect to the Mortgage Loans made subject to the Agreement hereby, the Transfer
Date shall be ___________________.
The
Custodial Files shall be held by LaSalle National Bank (“LaSalle”) pursuant to
that certain Custodial Agreement dated as of , 1999, among the Owner, the
Servicer and LaSalle.
All
other
terms and conditions of this transaction shall be governed by the
Agreement.
The
Set-Up Fee per Mortgage Loan shall be: $________
The
Termination Fee per Mortgage Loan shall be: $________
The
Servicer shall, as indicated below, (i) prepare or cause to be prepared all
Assignments of Mortgage, (ii) record or cause to be recorded all Assignments
of
Mortgage, (iii) shall pay the recording costs associated with the Mortgage
Loans
associated with this Acknowledgment Agreement and (iv) shall track such
Assignments of Mortgage to ensure they have been recorded for the Assignment
Fee
per Mortgage Loan indicated below:
Check
the appropriate box:
(Check
only one box)
| o |
All
items (i) through (iv) above
|
$_____
plus recording costs.
|
|
| o |
All
items (i) through (iv) above
|
$_____
(which fee includes recording costs).
|
|
| o |
Only
item (iv) above
|
$_____.
|
|
| o |
None
of the above.
|
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
This
Acknowledgment 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.
-2-
IN
WITNESS WHEREOF, the Owner and the Servicer have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day
and
year first above written.
OWNER:
XXXXXX
BROTHERS BANK, FSB
By:
Name:
Xxxx X. Xxxxxx
Title:
Vice President
SERVICER:
AURORA
LOAN SERVICES INC.
By:
Name:
Xxxxx X. Xxxxxx
Title:
Vice President
-3-
EXHIBIT
B-2
CONFIRMATION
AGREEMENT
On
this
____ day of ____________, 199_, Xxxxxx Brothers Bank, FSB (the “Owner”) as the
Owner under that certain Flow Servicing Agreement dated as of August 31, 1999,
(the “Agreement”), does hereby express its intention to transfer to Aurora Loan
Services Inc. (the “Servicer”) as Servicer under the Agreement, the servicing
responsibilities related to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto on ___________ (the “Transfer Date”).
The
Servicer hereby agrees to accept on the Transfer Date the servicing
responsibilities related to the Mortgage Loans identified on the attached
Mortgage Loan Schedule and shall begin to service such Mortgage Loans on the
Transfer Date in accordance with the provisions of the Agreement.
The
Custodial Files shall be held by __________________ (“_____________”) pursuant
to that certain Custodial Agreement dated as of _________ __, 199_, among the
Owner, the Servicer and ________________.
All
other
terms and conditions of this transaction shall be governed by the
Agreement.
The
Set-Up Fee per Mortgage Loan shall be: $________
The
Termination Fee per Mortgage Loan shall be: $________
The
Servicer shall, as indicated below, (i) prepare or cause to be prepared all
Assignments of Mortgage, (ii) record or cause to be recorded all Assignments
of
Mortgage, (iii) shall pay the recording costs associated with the Mortgage
Loans
associated with this Acknowledgment Agreement and (iv) shall track such
Assignments of Mortgage to ensure they have been recorded for the Assignment
Fee
per Mortgage Loan indicated below:
Check
the appropriate box:
(Check
only one box)
| o |
All
items (i) through (iv) above
|
$_____
plus recording costs.
|
|
| o |
All
items (i) through (iv) above
|
$_____
(which fee includes recording costs).
|
|
| o |
Only
item (iv) above
|
$_____.
|
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
This
Confirmation 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.
IN
WITNESS WHEREOF, the Owner and the Servicer have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day
and
year first above written.
OWNER:
XXXXXX
BROTHERS BANK, FSB
By:
Name:
Title:
SERVICER:
AURORA
LOAN SERVICES INC.
By:
Name:
Title:
-2-
EXHIBIT
C
CUSTODIAL
ACCOUNT LETTER AGREEMENT
_______
__, 199_
To: ___________________________
___________________________
___________________________
(the “Depository”)
As
Servicer under the Flow Servicing Agreement, dated as of ________________,
1999
(the “Agreement”), we hereby authorize and request you to establish an account,
as a Custodial Account pursuant to Section 3.03 of the Agreement, to be
designated as “Aurora Loan Services Inc., in trust for Xxxxxx Brothers Bank,
FSB, owner of Residential Mortgage Loans, Group No. ________, and various
Mortgagors.” All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. This letter is submitted to you
in
duplicate. Please execute and return one original to us.
AURORA
LOAN SERVICES INC.
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.
_____________________________
Depository
By:
Name:
Title:
Date:
-2-
EXHIBIT
D
ESCROW
ACCOUNT LETTER AGREEMENT
_______
___, 199_
To: ___________________________
___________________________
___________________________
(the “Depository”)
As
servicer under the Flow Servicing Agreement, dated as of ______________, 1999
(the “Agreement”), we hereby authorize and request you to establish an account,
as an Escrow Account pursuant to Section 3.05 of the Agreement, to be designated
as “Aurora Loan Services Inc., in trust for Xxxxxx Brothers Bank, FSB, owner of
Residential Mortgage Loans, Group No. _________, and various Mortgagors.” All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Servicer. This letter is submitted to you in duplicate. Please execute
and return one original to us.
AURORA
LOAN SERVICES INC.
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.
_____________________________
Depository
By:
Name:
Title:
Date:
-2-
EXHIBIT
E-1
OFFICER’S
CERTIFICATE
I,
____________________, hereby certify that I am the duly elected [Vice] President
of Aurora Loan Services Inc., a corporation organized under the laws of the
State of Delaware, (the “Company”) and further as follows:
1. Attached
hereto as Exhibit 1 is a true, correct and complete copy of the Certificate
of
Incorporation of the Company which is in full force and effect on the date
hereof and which has been in effect without amendment, waiver, rescission or
modification since ____________.
2. Attached
hereto as Exhibit 2 is a true, correct and complete copy of the bylaws of the
Company which are in effect on the date hereof and which have been in effect
without amendment, waiver, rescission or modification.
3. Attached
hereto as Exhibit 3 is an original certificate of good standing of the Company,
issued within ____ days of the date hereof, and no event has occurred since
the
date thereof which would impair such standing.
4. Attached
hereto as Exhibit 4 is a true, correct and complete copy of a Certificate of
an
Assistant Secretary of the Company setting forth the Officers of the Company
authorized to execute and deliver the Flow Servicing Agreement, dated as of
___________________, 1999 (the “Agreement”), by and between the Company and
Xxxxxx Brothers Bank, FSB (the “Owner”), and such authorities are in effect on
the date hereof and have been in effect without amendment, waiver rescission
or
modification.
5. To
the
best of my knowledge, either (i) no consent, approval, authorization or order
of
any court or governmental agency or body is required for the execution, delivery
and performance by the Company of or compliance by the Company with the
Agreement or the consummation of the transactions contemplated by the Agreement;
or (ii) any required consent, approval, authorization or order has been obtained
by the Company.
6. To
the
best of my knowledge, neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Agreement, conflicts or will
conflict with or results or will result in a breach of or constitutes or will
constitute a default under the charter or by-laws of the Company, the terms
of
any indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which it
is
bound.
7. To
the
best of my knowledge, there is no action, suit, proceeding or investigation
pending or threatened against the Company which, in my judgment, either in
any
one instance or in the aggregate, would be reasonable likely to impair
materially the ability of the Company to carry on its business or to perform
under the terms of the Agreement.
8. Each
person listed on Exhibit 5 attached hereto who, as an officer or representative
of the Company, signed the Agreement and any other document delivered prior
hereto or on the date hereof in connection with the Agreement, was, at the
respective times of such signing and delivery, and is now, a duly elected or
appointed, qualified and acting officer or representative of the Company, who
holds the office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their genuine
signatures.
9. Attached
are resolutions of the board of directors of the Company which authorize the
Company to engage in the transactions described and contemplated in the
Agreement.
-2-
IN
WITNESS WHEREOF, I have hereunto signed my name.
Dated:
_____________, 1999
AURORA
LOAN SERVICES INC.
By:
Name:
Title:
-3-
EXHIBIT
4
to
Company’s
Officer’s Certificate
Name Title Signatur
e
____________________
____________________
____________________
____________________
____________________
____________________
-4-
EXHIBIT
E-2
COMPANY’S
OFFICER’S CERTIFICATE
I,
____________________, hereby certify that I am the duly elected [Vice] President
of Aurora Loan Services Inc., a corporation organized under the laws of the
State of Delaware, (the “Company”) and further as follows:
1. The
charter of the Company in the form attached to that certain Company’s Officer’s
Certificate dated _____________, 1999 by ____________ is in full force and
effect on the date hereof and has been in effect without amendment, waiver,
rescission or modification.
2. The
bylaws of the Company in the form attached to that certain Company’s Officer’s
Certificate dated ____________ by ____________ are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or
modification.
3. Since
the
last date of issuance of a certificate of good standing of the Company in the
form attached to that certain Company’s Officer’s Certificate dated ____________
by ____________, no event has occurred since the date thereof which would impair
such standing.
4. The
resolutions of the Board of Directors of the Company in the form attached to
that certain Company’s Officer’s Certificate dated ____________ by ____________
are in effect on the date hereof and have been in effect without amendment,
waiver, rescission or modification.
5. To
the
best of my knowledge, neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Flow Servicing Agreement dated
as of
_________________, 1999, by and between Xxxxxx Brothers Bank, FSB and the
Company, conflicts or will conflict with or results or will result in a breach
of or constitutes or will constitute a default under the charter or by-laws
of
the Company, the terms of any indenture or other agreement or instrument to
which the Company is a party or by which it is bound or to which it is subject,
or any statute or order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the Company is subject
or by which it is bound.
6. To
the
best of my knowledge, there is no action, suit, proceeding or investigation
pending or threatened against the Company which, in my judgment, either in
any
one instance or in the aggregate, would be reasonably likely to impair
materially the ability of the Company to carry on its business substantially
as
now conducted or to perform under the terms of the Agreement.
7. The
Company is not currently in material breach of any representation or warranty,
or in material default under any provision of the Agreement.
IN
WITNESS WHEREOF, I have hereunto signed my name.
Dated:
[Seal]
AURORA
LOAN SERVICES INC.
By:
Name:
Title:
-2-
EXHIBIT
F
FORM
OF CUSTODIAL AGREEMENT
(Intentionally
omitted)
EXHIBIT
G
FORM
OF OPINION OF COUNSEL TO THE SERVICER
(date)
Xxxxxx
Brothers Bank, FSB
000
Xxxxx
Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx
Ladies
and Gentlemen:
You
have
requested my opinion, as Legal Counsel to Aurora Loan Services Inc. (the
“Servicer”), with respect to certain matters in connection with the servicing by
the Servicer of the Mortgage Loans pursuant to that certain Flow Servicing
Agreement, by and between the Servicer and Xxxxxx Brothers Bank, FSB (the
“Owner”), dated as of ____________, 1999, (the “Flow Servicing Agreement”).
Capitalized terms not otherwise defined herein have the meanings set forth
in
the Flow Servicing Agreement.
I
have
examined the following documents:
1.the
Flow
Servicing Agreement; and
2.
such
other documents, records and papers as I have deemed necessary and relevant
as a
basis for this opinion.
Based
upon the foregoing, and upon a review of such other documents, certificates
and
matters of law as I have deemed necessary, but subject to the assumptions,
exceptions, qualifications and limitations hereinafter expressed, I am of the
opinion that:
1. The
Servicer has all legal capacity, power and authority necessary to execute,
deliver and perform its obligations under the Flow Servicing Agreement, and
such
agreement has been duly and validly authorized, executed and delivered by the
Servicer and is enforceable against it in accordance with its
terms.
2. There
is
no litigation or governmental proceeding pending orthreatened against or
involving the Servicer or questioning or seeking to restrain execution, delivery
or performance by the Servicer of its duties under the Flow Servicing Agreement,
or in which an adverse outcome is reasonably likely to be adversely determined
and if adversely determined would have a materially adverse impact on the
ability of the Servicer to perform under the Flow Servicing
Agreement.
A. My
opinion in paragraph 1 above is subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium, arrangement or similar laws affecting
the enforcement of creditors’ rights generally (including, without limitation,
the effect of statutory or other laws regarding fraudulent or other similar
transfers) and general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law.
-2-
B. I
am a
member of the Bar of the State of _______ and render no opinion on the laws
of
any jurisdiction other than the State of _______ and the United States of
America.
C. My
opinions are limited to the present laws and to the facts as they presently
exist. I assume no obligation to revise or supplement this opinion should the
present laws of the jurisdictions referred to in paragraph B above be changed
by
legislative action, judicial decision or otherwise.
D. This
letter is rendered to you in connection with the Flow Servicing Agreement and
the transactions related thereto and may not be relied upon by any other person
or by you in any other context or for any other purpose. This letter may not
be
quoted in whole or in part, nor may copies thereof be furnished or delivered
to
any other person, without the prior written consent of the servicer, as
applicable, except that you may furnish copies hereof (i) to your independent
auditors and attorneys, (ii) to any United States, state or local authority
having jurisdiction or any governmental agency, (iii) in connection with any
legal action arising out of the Flow Servicing Agreement and (iv) to a purchaser
or purchasers to which you resell the Mortgage Loans which may rely on this
opinion as if it were addressed to them as of its date, provided that the
Servicer remains the servicer of the Mortgage Loans under the Flow Servicing
Agreement.
E. I
have
assumed with your permission (i) the genuineness of all signatures by each
party
other than the Servicer, (ii) the authenticity of documents submitted to me
as
originals and the conformity with the original documents of all documents
submitted to me as copies, and (iii) the due execution and delivery, pursuant
to
due authorization of the Flow Servicing Agreement by each party other than
the
Servicer.
Very
truly yours,
_________________________
Name
Legal
Counsel
-3-
EXHIBIT
H
FORM
OF COLLATERAL PLEDGE AND SECURITY AGREEMENT
COLLATERAL
PLEDGE AND SECURITY AGREEMENT,
dated
as of _________ __, 199_, by and between Aurora Loan Services Inc. (“Pledgor”)
and Xxxxxx Brothers Bank, FSB (“Pledgee”).
WHEREAS,
heretofore Pledgor and Pledgee executed that certain Flow Servicing Agreement,
dated as of ________________, 1999 (the “Servicing Agreement”);
WHEREAS,
heretofore Pledgee sold certain of the mortgage loans which had been subject
to
the Servicing Agreement to the [Third Party Purchaser] (“Purchaser”) pursuant to
that certain [Purchase Agreement] (the “Purchase Agreement”), dated as of
_________ __, 199_, by and between Pledgee and Purchaser, which mortgage loans
are listed on Exhibit A attached hereto (the “Mortgage Loans”);
WHEREAS,
pursuant to the Purchase Agreement, Pledgor has been retained to service the
Mortgage Loans sold to Purchaser;
WHEREAS,
Section
7.07 of the Servicing Agreement obligates Pledgor to remit to Pledgee the amount
of the monthly servicing fee received by Pledgor with respect to each Mortgage
Loan under the Purchase Agreement in excess of the monthly servicing fee which
had been received by Pledgor from Pledgee with respect to each Mortgage Loan
previously subject to the Servicing Agreement and sold to Purchaser (the
“Additional Remittance”), and in connection therewith, obligates Pledgor to send
to Pledgee a monthly report;
WHEREAS,
Section
7.08 of the Servicing Agreement permits Pledgee to cause Pledgor at any time
under any Reconstitution Agreement to transfer the servicing responsibilities
and duties associated therewith to Pledgee or any designee of Pledgee, and
in
connection therewith, obligates Pledgor to cooperate with Pledgee in such
transfer;
WHEREAS,
Pledgor’s obligations to (i) remit to Pledgee the Additional Remittance, (ii)
deliver a monthly report in connection with the Additional Remittance and (iii)
cooperate with Pledgor in connection with any transfer of servicing
responsibilities and duties;
WHEREAS,
Pledgor
desires to pledge to Pledgee all its right, title and interest in and to the
Servicing Rights (as defined below) with respect to each Mortgage Loan.
NOW,
THEREFORE,
for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Pledgee agree as follows:
1. Pledgor
hereby grants, pledges, conveys, transfers and assigns to Pledgee a first
priority security interest in and pledge of all its right title and interest
in
and to any and all of the following: (i) all rights to service the Mortgage
Loans; (ii) any payments to or monies received by Pledgor for servicing the
Mortgage Loans; (iii) all Ancillary Income or similar payments retained by
Pledgor with respect to the Mortgage Loans; (iv) all agreements or documents
creating, defining or evidencing any of the servicing rights related to the
Mortgage Loans; (v) Escrow Payments or other similar payments with respect
to
the Mortgage Loans and any amounts actually collected by Pledgor with respect
thereto; (vi) all accounts and other rights to payments related to any of the
property described in this paragraph; and (vii) possession and use of any and
all Servicing Files pertaining to the Mortgage Loans or pertaining to the past,
present or prospective servicing of the Mortgage Loans (items (a) through (g)
are collectively referred to herein as the “Servicing Rights”).
-4-
|
2.
|
Pledgor
covenants and agrees that:
|
|
(a)
|
No
sale, transfer, assignment, hypothecation or pledge of the Servicing
Rights shall be made by Pledgor except in full compliance with all
applicable laws, rules, regulations and orders, and then only after
Pledgor has first received the prior written consent of Pledgee to
such
sale; and
|
|
(b)
|
The
Pledgee’s counsel will, deliver, file, record and prepare for execution by
the Pledgor such UCC-1 financing statements, further agreements,
instruments and documents as Pledgee may require to impose, perfect
and
protect the security interest created and granted by this Collateral
Pledge and Security Agreement.
|
|
3.
|
Each
of the following shall constitute an event of default
hereunder:
|
(i) failure
by Pledgor to remit to Pledgee the Additional Remittance in accordance with
Section 7.07 of the Servicing Agreement, which failure continues for a period
of
five (5) Business Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to Pledgor by
Pledgee;
(ii) failure
by Pledgor to provide Pledgee with a monthly report in connection with the
Additional Remittance in accordance with Section 7.07 of the Servicing
Agreement, which failure continues unremedied for a period of thirty (30) days
after the date on which written notice of such failure, requiring the same
to be
remedied, shall have been given to Pledgor by Pledgee; and
|
(iii)
failure by Pledgor to cooperate with Pledgee in the transfer of servicing
responsibilities and duties to Pledgee or any designee of Pledgee
in
accordance with Section 7.08 of the Servicing Agreement, which failure
continues unremedied for a period of thirty (30) days after the date
on
which written notice of such failure, requiring the same to be remedied,
shall have been given to Pledgor by
Pledgee.
|
-5-
4. Upon
the
occurrence of an event of default as hereinabove set forth, (i) Pledgee may,
at
its option, notify Pledgor that the assignment herein has become effective
and,
upon the sending of such notice, the Servicing Rights shall be deemed absolutely
assigned to Pledgee without the need for any further documentation; (ii) Pledgee
shall have all rights and remedies of a secured party under the Uniform
Commercial Code; (iii) Pledgee shall have the right to sell and transfer the
Servicing Rights by any means and upon any terms Pledgee deems necessary or
desirable; (iv) Pledgee shall be entitled to such injunctive relief as may
be
granted by any court having equitable jurisdiction over the Servicing Rights;
and (v) Pledgor hereby appoints Pledgee its attorney-in-fact to endorse any
other document or instrument necessary to permit Pledgee to realize upon the
Servicing Rights.
5. Each
remedy granted in Paragraph 4 above shall not be deemed exclusive of any other
such remedy.
6. This
Collateral Pledge and Security Agreement shall terminate upon the termination
of
the obligation of Pledgee to remit the Additional Remittance in accordance
with
Section 7.07 of the Servicing Agreement.
7. This
Collateral Pledge and Security Agreement contains the full understanding of
the
parties in respect of the subject matter hereof, and may not be amended,
altered, discharged or terminated, except by another agreement in writing,
signed by the party sought to be charged therewith.
8. This
Collateral Pledge and Security Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
9. Capitalized
terms used herein but not otherwise defined shall have the meanings set forth
in
the Servicing Agreement.
10. This
Collateral Pledge and Security Agreement shall be construed in accordance with
the laws of the State of New York.
-6-
IN
WITNESS WHEREOF,
the
parties have caused this Collateral Pledge and Security Agreement to be executed
by their duly authorized officers as of the date first above
written.
|
XXXXXX
BROTHERS BANK, FSB
|
Pledgee
By:___________________________
Name:_________________________
Title:________________________
AURORA
LOAN SERVICES INC.
Pledgor
By:___________________________
Name:_________________________
Title:________________________
-7-
EXHIBIT
I
FEE
SCHEDULE
-8-
EXHIBIT
J
FORM
OF
REO DISPOSITION FEE LETTER AGREEMENT
(date)
Xxxxxx
Brothers Bank, FSB
000
Xxxxx
Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx
Ladies
and Gentlemen:
We
refer
to that certain Flow Servicing Agreement, by and between Aurora Loan Services
Inc. (the “Servicer”) and Xxxxxx Brothers Bank, FSB (the “Owner”) dated as of
,
1999,
(the “Agreement”). With respect to the Agreement the Owner hereby agrees to
pay
the
Servicer a REO Disposition Fee as set forth below.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement. All other terms and conditions of this transaction shall be
governed by the Agreement.
With
respect to any REO Property, upon a REO Disposition, the Servicer shall be
entitled to retain from REO Disposition Proceeds a disposition fee equal to
the
lesser of (A)[ ]% of the Net Sale Proceeds or (B) $[ ]; provided, however,
that
(1) in the event that the REO Disposition Proceeds exceed $25,000, such
disposition fee shall not be less than $[ ] and (2) in the event that the REO
Disposition Proceeds are $25,000 or less, such disposition fee shall be equal
to
$[ ].
This
REO
Disposition Fee 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.
Very
truly yours,
AGREED
AND ACKNOWLEDGED:
XXXXXX
BROTHERS BANK, FSB
Owner
By:
Name:
Title:
-9-
