Exhibit 99.2
================================================================================
AURORA LOAN SERVICES LLC,
as Servicer
XXXXXX BROTHERS HOLDINGS INC.,
as Seller
and
AURORA LOAN SERVICES LLC
as Master Servicer
_____________________________
Structured Asset Securities Corporation
Mortgage Pass-Through Certificates, Series 2006-3H
SERVICING AGREEMENT
Dated as of March 1, 2006
_____________________________
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS
ARTICLE II.
SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files..........13
Section 2.02 Books and Records..............................................13
ARTICLE III.
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service............................................14
Section 3.02 Collection of Mortgage Loan Payments...........................16
Section 3.03 Establishment of and Deposits to Custodial Account.............16
Section 3.04 Permitted Withdrawals From Custodial Account...................18
Section 3.05 Establishment of and Deposits to Escrow Account................19
Section 3.06 Permitted Withdrawals From Escrow Account......................20
Section 3.07 Maintenance of PMI Policy and/or LPMI Policy; Claims...........20
Section 3.08 Fidelity Bond and Errors and Omissions Insurance...............22
Section 3.09 Notification of Adjustments....................................22
Section 3.10 Completion and Recordation of Assignments of Mortgage..........22
Section 3.11 Protection of Accounts.........................................22
Section 3.12 Payment of Taxes, Insurance and Other Charges..................23
Section 3.13 Maintenance of Hazard Insurance................................24
Section 3.14 Maintenance of Mortgage Blanket Insurance......................24
Section 3.15 Restoration of Mortgaged Property..............................25
Section 3.16 Title, Management and Disposition of REO Property..............25
Section 3.17 Real Estate Owned Reports......................................27
Section 3.18 MERS...........................................................28
Section 3.19 Waiver of Prepayment Penalty Amounts...........................28
ARTICLE IV.
PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances....................................................29
Section 4.02 Statements to Master Servicer..................................30
Section 4.03 Monthly Advances by Servicer...................................31
-i-
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.........................................32
Section 5.02 Report on Attestation of Compliance with
Applicable Servicing Criteria..................................32
Section 5.03 Annual Officer's Certificate...................................33
Section 5.04 Report on Assessment of Compliance with Applicable
Servicing Criteria.............................................34
Section 5.05 Transfers of Mortgaged Property................................34
ARTICLE VI.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer.....35
Section 6.02 Remedies for Breach of Representations and
Warranties of the Servicer.....................................37
Section 6.03 Additional Indemnification by the Servicer;
Third Party Claims.............................................38
Section 6.04 Indemnification with Respect to Certain Taxes
and Loss of REMIC Status.......................................39
Section 6.05 Reporting Requirements of the Commission
and Indemnification............................................39
ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer........................40
Section 7.02 Limitation on Liability of the Servicer and Others.............41
Section 7.03 Limitation on Resignation and Assignment by the Servicer.......41
Section 7.04 Subservicing Agreements and Successor Subservicer..............42
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause..........................................44
Section 8.02 Termination Without Cause......................................46
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer......................................46
Section 9.02 Costs..........................................................48
Section 9.03 Notices........................................................48
Section 9.04 Severability Clause............................................50
-ii-
Section 9.05 No Personal Solicitation.......................................50
Section 9.06 Counterparts...................................................51
Section 9.07 Place of Delivery and Governing Law............................51
Section 9.08 Further Agreements.............................................51
Section 9.09 Intention of the Parties.......................................51
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement......52
Section 9.11 Assignment by the Seller.......................................52
Section 9.12 Amendment......................................................52
Section 9.13 Waivers........................................................52
Section 9.14 Exhibits.......................................................53
Section 9.15 General Interpretive Principles................................53
Section 9.16 Reproduction of Documents......................................53
Section 9.17 Protection of Confidential Information.........................53
EXHIBITS & SCHEDULES
EXHIBIT A Mortgage Loan Schedule
EXHIBIT B Custodial Account Certification Notice
EXHIBIT C Escrow Account Certification Notice
EXHIBIT D-1 Form of Monthly Remittance Advice
EXHIBIT D-2 Standard Layout for Monthly Defaulted Loan Report
EXHIBIT E Form of Certification to be Provided to the Depositor,
the Trustee And the Master Servicer by the Servicer
EXHIBIT F Form of Annual Certification
EXHIBIT G Xxxxxx Mae Guide No. 95-19
EXHIBIT H Servicing Criteria to be Addressed in Report on Assessment
of Compliance
EXHIBIT I Transaction Parties
EXHIBIT J Form of Annual Officer's Certificate
-iii-
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of March, 2006, by and between XXXXXX BROTHERS HOLDINGS INC., a Delaware
corporation (the "Seller"), AURORA LOAN SERVICES LLC, a Delaware limited
liability company (the "Servicer"), and AURORA LOAN SERVICES LLC, as Master
Servicer under the Trust Agreement (as defined herein) recites and provides as
follows:
RECITALS
WHEREAS, the Servicer and Xxxxxx Brothers Bank, FSB (the "Bank") are
parties to a Flow Servicing Agreement, dated as of August 31, 1999 (the "Bank
Flow Servicing Agreement"), pursuant to which the Servicer services certain of
the residential fixed and adjustable rate mortgage loans identified on Exhibit A
hereto (the "Bank Mortgage Loans");
WHEREAS, pursuant to an Assignment and Assumption Agreement, dated August
1, 2003 (the "Assignment Agreement"), the Seller acquired from the Bank all of
the Bank's right, title and interest in and to the mortgage loans currently
serviced under the Bank Flow Servicing Agreement and assumed for the benefit of
the Servicer and the Bank the rights and obligations of the Bank as owner of
such mortgage loans pursuant to the Bank Flow Servicing Agreement;
WHEREAS, the Servicer and the Seller are parties to a Flow Servicing
Agreement, dated as of February 15, 2000 (the "Holdings Flow Servicing
Agreement"), pursuant to which the Servicer services certain of the mortgage
loans identified on Exhibit A hereto (the "Holdings Mortgage Loans," and
together with the Bank Mortgage Loans, the "Mortgage Loans");
WHEREAS, the Seller has conveyed such Mortgage Loans on a
servicing-retained basis to Structured Asset Securities Corporation (the
"Depositor"), which in turn has conveyed the Mortgage Loans to Citibank, N.A.,
as trustee (the "Trustee"), under a trust agreement dated as of March 1, 2006
(the "Trust Agreement"), among the Trustee, Aurora Loan Services LLC, as master
servicer (together with any successor Master Servicer appointed pursuant to the
provisions of the Trust Agreement, the "Master Servicer") and the Depositor;
WHEREAS, from time to time certain other of the mortgage loans conveyed by
the Depositor to the Trustee under the Trust Agreement on the Closing Date and
serviced by other servicers may subsequent to the Closing Date be transferred to
the Servicer for servicing under this Agreement and Exhibit A hereto will be
amended to include such mortgage loans which will then be "Mortgage Loans" under
this Agreement;
WHEREAS, the Seller desires that the Servicer service the Mortgage Loans
pursuant to this Agreement, and the Servicer has agreed to do so, subject to the
right of the Seller and of the Master Servicer to terminate the rights and
obligations of the Servicer hereunder at any time and to the other conditions
set forth herein;
WHEREAS, the Master Servicer shall be obligated under the Trust Agreement,
among other things, to supervise the servicing of the Mortgage Loans on behalf
of the Trustee, and shall have the right, under certain circumstances, to
terminate the rights and obligations of the Servicer under this Servicing
Agreement;
WHEREAS, the Seller and the Servicer agree that the provisions of the Bank
Flow Servicing Agreement and the Holdings Flow Servicing Agreement shall not
apply to the related Mortgage Loans for so long as such Mortgage Loans remain
subject to the provisions of the Trust Agreement;
WHEREAS, the Seller and the Servicer acknowledge and agree that the Seller
will assign all of its rights and delegate all of its obligations hereunder
(excluding the Seller's rights and obligations as owner of the servicing rights
relating to the Mortgage Loans) to the Trustee, and that each reference herein
to the Seller is intended, unless otherwise specified, to mean the Seller or the
Trustee, as assignee, whichever is the owner of the Mortgage Loans from time to
time;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Seller, the Servicer and the Master 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 (i) prudent mortgage lending institutions that
service mortgage loans of the same type as such Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located and (ii) in
accordance with applicable state, local and federal laws, rules and regulations;
provided, further, that, unless otherwise specified in this Agreement, such
mortgage servicing practices shall be undertaken in accordance with the
provisions of the Xxxxxx Xxx Guides.
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 related Mortgage Note.
Aggregate Loan Balance: At any date of determination, the outstanding
principal balance of the Mortgage Loans serviced hereunder.
Agreement: This 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
-2-
administrative fees and all other incidental fees and charges. Ancillary Income
shall not include any Prepayment Penalty Amount.
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.
Bank: Xxxxxx Brothers Bank, FSB or any successor thereto.
Best Efforts: Efforts determined to be reasonably diligent by the Seller
or the Servicer, as the case may be, in its sole discretion. Such efforts do not
require the Seller or the Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Seller or the 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 a Sunday or (ii) a day
on which banking institutions in Colorado, Nebraska, New York or the state in
which the corporate trust office of the Trustee is located are authorized or
obliged by executive order to be closed.
Certificates: Any or all of the Certificates issued pursuant to the Trust
Agreement.
Closing Date: March 31, 2006.
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.
Commission: The United States Securities and Exchange Commission.
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.
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 custodial agreements relating to custody of
certain of the Mortgage Loans, between the Custodian and the Trustee, each dated
March 1, 2006.
-3-
Custodian: U.S. Bank National Association and Xxxxx Fargo Bank, N.A. and
their respective successors.
Cut-off Date: March 1, 2006.
Depositor: Structured Asset Securities Corporation, or any successor in
interest.
Determination Date: With respect to each Remittance Date, the 15th day of
the month in which such Remittance Date occurs, or, if such 15th day is not a
Business Day, the next succeeding Business Day.
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 immediately succeeding month.
Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month immediately preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.
Eligible Deposit Account: An account that is maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution.
Eligible Institution: Any of the following:
(i) an institution whose:
(A) commercial paper, short-term debt obligations, or other
short-term deposits are rated at least "A-1+" or long-term unsecured debt
obligations are rated at least "AA-" by S&P, if the amounts on deposit are
to be held in the account for no more than 365 days; or
(B) commercial paper, short-term debt obligations, demand deposits,
or other short-term deposits are rated at least "A-2" by S&P, if the
amounts on deposit are to be held in the account for no more than 30 days
and are not intended to be used as credit enhancement. Upon the loss of
the required rating set forth in this clause (ii), the accounts shall be
transferred immediately to accounts which have the required rating.
Furthermore, commingling by the Servicer is acceptable at the A-2 rating
level if the Servicer is a bank, thrift or depository and provided the
Servicer has the capability to immediately segregate funds and commence
remittance to an Eligible Deposit Account upon a downgrade;
(ii) the corporate trust department of a federal depository
institution or state-chartered depository institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the U.S. Code of
Federal Regulation Section 9.10(b), which, in either case, has corporate trust
powers and is acting in its fiduciary capacity; or
-4-
(iii) the Bank.
Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest 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
("Direct Obligations");
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution or
trust company (including U.S. subsidiaries of foreign depositories, the Trustee
or any agent of the Trustee, acting in its respective commercial capacity)
incorporated or organized under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal or state
banking authorities, so long as at the time of investment or the contractual
commitment providing for such investment the commercial paper or other
short-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 commercial paper or other short-term debt
or deposit obligations of such holding company or deposit institution, as the
case may be) have been rated by each Rating Agency in its highest short-term
rating category or one of its two highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by Xxxxxx Xxx, Xxxxxx Xxx or Xxxxxxx Mac with any
registered broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer
or bank has an uninsured, unsecured and unguaranteed obligation rated by each
Rating Agency in its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which have a credit rating from each Rating Agency, at the time of
investment or the contractual commitment providing for such investment, at least
equal to one of the two highest long-term credit rating categories of each
Rating Agency; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that investment
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as part of the Trust Fund to exceed 20% of the sum of
the Aggregate Loan Balance and the aggregate principal amount of all Eligible
Investments in the Certificate Account; provided, further, that such securities
will not be Eligible Investments if they are published as being under review
with negative implications from any Rating Agency;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than 180 days after the date of issuance thereof) rated by each
Rating Agency in its highest short-term rating category;
-5-
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the United
States of America or its agencies or instrumentalities (which obligations are
backed by the full faith and credit of the United States of America) held by a
custodian in safekeeping on behalf of the holders of such receipts; and
(viii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or investment, (A)
rated in the highest rating category by each Rating Agency or (B) that would not
adversely affect the then current rating by any Rating Agency of any of the
Certificates. Such investments in this subsection (viii) may include money
market mutual funds or common trust funds, including any fund for which the
Trustee, the Securities Administrator, the Master Servicer or an affiliate
thereof serves as an investment advisor, administrator, shareholder servicing
agent, and/or custodian or subcustodian, notwithstanding that (x) the Trustee,
the Master Servicer, the Securities Administrator or an affiliate thereof
charges and collects fees and expenses from such funds for services rendered,
(y) the Trustee, the Master Servicer, the Securities Administrator or an
affiliate thereof charges and collects fees and expenses for services rendered
pursuant to this Agreement, and (z) services performed for such funds and
pursuant to this Agreement may converge at any time.
provided, however, that no such instrument shall be an Eligible Investment
if such instrument evidences either (i) a right to receive only interest
payments with respect to the obligations underlying such instrument, or (ii)
both principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with the Xxxxxx Mae 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 related
document.
Event of Default: Any event set forth in Section 8.01.
Xxxxxx Xxx: Xxxxxx Xxx, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
-6-
Fidelity Bond: A fidelity bond to be maintained by the Servicer in
accordance with the Xxxxxx Xxx Guides.
Fitch: Fitch, Inc., or any successor in interest.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Xxxxxx Mae: The Government National Mortgage Association, or any successor
thereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property
including proceeds of any hazard or flood insurance policy, PMI Policy or LPMI
Policy.
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.
LPMI Fee: With respect to each LPMI Loan, the portion of the Mortgage
Interest Rate as set forth on the related Mortgage Loan Schedule (which shall be
payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds), which, during such
period prior to the required cancellation of the LPMI Policy, shall be used to
pay the premium due on the related LPMI Policy.
LPMI Insurer: None.
LPMI Loan: A Mortgage Loan covered by an LPMI Policy, as set forth in the
Mortgage Loan Schedule or otherwise identified to the Servicer in writing.
LPMI Policy: A policy of primary mortgage guaranty insurance issued by a
LPMI Insurer pursuant to which the related premium is to be paid from payments
of interest made by the Mortgagor.
Master Servicer: Aurora Loan Services LLC, or any successor in interest,
or if any successor master servicer shall be appointed as provided in the Trust
Agreement, then such successor master servicer.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
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.
-7-
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) that was due on
the Mortgage Loan on the Due Date in the related Due Period, and that (i) was
delinquent at the close of business on the related Determination Date and (ii)
was not the subject of a previous Monthly Advance, but only to the extent that
such amount is expected, in the reasonable judgment of the Servicer, to be
recoverable from collections or other recoveries in respect of such Mortgage
Loan. To the extent that the Servicer determines that any such amount is not
recoverable from collections or other recoveries in respect of such Mortgage
Loan, such determination shall be evidenced by a certificate of a Servicing
Officer delivered to the Master Servicer setting forth such determination and
the procedures and considerations of the Servicer forming the basis of such
determination.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., or any successor in interest.
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 Interest Rate: The annual rate of interest borne on a Mortgage
Note, after giving effect to any applicable Relief Act Reduction.
Mortgage Loan: An individual Mortgage Loan that 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 Master Servicer, which shall be equal to
the Mortgage Interest Rate minus the applicable Servicing Fee.
Mortgage Loan Schedule: A schedule of the Mortgage Loans setting forth
information with respect to such Mortgage Loans (including any MERS
identification number (if available) with respect to each MERS Mortgage Loan or
MERS Eligible Mortgage Loan and a Prepayment Penalty Schedule), attached hereto
as Exhibit A, which may be amended from time to time to include additional
mortgage loans which are transferred to the Servicer by a Prior Servicer in a
Servicing Transfer.
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.
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.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Servicer, reasonably acceptable to the Seller, the Master Servicer and
the Trustee, but which must be independent outside counsel with respect to any
such opinion of counsel concerning (i) the non-recordation of Mortgage Loans
pursuant to Section 2.02 hereof and (ii) federal income tax matters.
Participating Entity: As defined in Section 5.02 hereof.
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 Excess Amount: With respect to any Principal
Prepayment in full which is applied to the related Mortgage Loan from the first
day of the month of any Remittance Date through the sixteenth day of the month
of such Remittance Date, all amounts paid in respect of interest on such
Principal Prepayment in full. A Prepayment Interest Excess Amount cannot result
from a Principal Prepayment in part, but only from a Principal Prepayment in
full.
Prepayment Interest Shortfall Amount: With respect to any Remittance Date
and any Principal Prepayment in full which is applied to the related Mortgage
Loan from the seventeenth day of the month immediately preceding the month of
such Remittance Date through the last day of the month immediately preceding the
month of such Remittance Date, the amount of interest (net the related Servicing
Fee) that would have accrued on the amount of such Principal Prepayment in full
from the date on which such Principal Prepayment was applied to such Mortgage
Loan until the last day of the month immediately preceding the month of such
Remittance Date, inclusive. With respect to any Remittance Date and any
Principal Prepayment in part (other than a Principal Prepayment in part received
on the first day of the month) which is applied to the related Mortgage Loan
during the related Prepayment Period, the amount of interest that would have
accrued on the amount of such Principal Prepayment in part from the date on
which such Principal Prepayment in part was applied to such Mortgage Loan until
the end of the Prepayment Period, inclusive.
Prepayment Penalty Amount: With respect to any Remittance Date, all
premiums or charges paid by the obligors under the Mortgage Notes due to
Principal Prepayments collected by the Servicer during the immediately preceding
Prepayment Period.
Prepayment Penalty Schedule: A data field in the Mortgage Loan Schedule
attached hereto as Exhibit A which sets forth the amount or method of
calculation of the Prepayment
-9-
Penalty Amount and the term during which such Prepayment Penalty Amount is
imposed with respect to a Mortgage Loan.
Prepayment Period: With respect to any Remittance Date and a Principal
Prepayment in full, the period from the seventeenth day of the month immediately
preceding the month of such Remittance Date to the sixteenth day of the month of
such Remittance Date. With respect to any Remittance Date and any Principal
Prepayment in part, the calendar month immediately preceding the month of such
Remittance Date.
Prime Rate: The prime rate published from time to time, as published as
the average rate in The Wall Street Journal Northeast Edition.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date 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 of the
Mortgage Loans.
Qualified GIC: A guaranteed investment contract or surety bond providing
for the investment of funds in the Custodial Account and insuring a minimum,
fixed or floating rate of return on investments of such funds, which contract or
surety bond shall:
(i) be an obligation of an insurance company or other corporation
whose long-term debt is rated by each Rating Agency in one of its two highest
rating categories or, if such insurance company has no long-term debt, whose
claims paying ability is rated by each Rating Agency in one of its two highest
rating categories, and whose short-term debt is rated by each Rating Agency in
its highest rating category;
(ii) provide that the Servicer may exercise all of the rights under
such contract or surety bond without the necessity of taking any action by any
other Person;
(iii) provide that the Trustee's interest therein shall be
transferable to any successor trustee hereunder; and
provide that the funds reinvested thereunder and accrued interest thereon
be returnable to the Custodial Account not later than the Business Day prior to
any Remittance Date.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Rating Agency: Each of Xxxxx'x and Fitch.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release
-10-
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg.
1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be
provided by the Commission or its staff from time to time.
Relief Act Reduction: With respect to any Mortgage Loan as to which there
has been a reduction in the amount of the interest collectible thereon as a
result of the application of the Servicemembers Civil Relief Act, as amended,
any amount by which interest collectible on such Mortgage Loan for the Due Date
in the related Due Period is less than the interest accrued thereon for the
applicable one month period at the Mortgage Interest Rate without giving effect
to such reduction.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month.
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 3.16.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of
the Trustee through foreclosure or by deed in lieu of foreclosure, pursuant to
Section 3.16.
Retained Interest: The meaning set forth in the Trust Agreement.
Retained Interest Holder: The meaning set forth in the Trust Agreement.
Securities Administrator: None.
Servicer: Aurora Loan Services LLC 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 (i) the preservation,
inspection, restoration and protection of the Mortgaged Property, (ii) any
enforcement or administrative or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage, (iv) 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, (v) any losses sustained by the Servicer with respect to the
liquidation of the Mortgaged Property and (vi) compliance with the obligations
pursuant to the provisions of the Xxxxxx Xxx Guides.
Servicing Fee: An amount equal to (a) one-twelfth the product of (i) a
rate per annum equal to either 0.250% for fixed rate Mortgage Loans and 0.375%
for Adjustable Rate Mortgage
-11-
Loans and (ii) the outstanding principal balance of such Mortgage Loan and (b)
any Prepayment Interest Excess Amount. The obligation of the Trustee to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from the
interest portion (including recoveries with respect to interest from Liquidation
Proceeds to the extent permitted by this Agreement) of such Monthly Payment
collected by the Servicer or as otherwise provided under this Agreement.
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 Trustee 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 Master Servicer
or the Seller upon request, as such list may from time to time be amended.
Servicing Transfer: Any transfer of the servicing by a Prior Servicer of
Mortgage Loans to the Servicer under this Agreement.
Servicing Transfer Date: The date on which a Servicing Transfer occurs.
Subcontractor: Any vendor, subcontractor or other Person (determined
solely by the Servicer) that is not responsible for the overall servicing (as
"servicing" is commonly understood by participants in the mortgage-backed
securities market) of the Mortgage Loans but performs one or more discrete
functions identified in Item 1122(d) of Regulation AB with respect to the
Mortgage Loans under the direction or authority of the Servicer or a related
Subservicer.
Subservicer: Any Person (determined solely by the Servicer) that services
Mortgage Loans on behalf of the Servicer or any Subservicer and is responsible
for the performance (whether directly or through Subservicers or Subcontractors)
of a substantial portion of the material servicing functions required to be
performed by the Servicer under this Agreement that are identified in Item
1122(d) of Regulation AB.
S&P: Standard and Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
or any successor in interest.
Trust Agreement: The Trust Agreement dated as of March 1, 2006, among the
Trustee, the Master Servicer and the Depositor.
Trust Fund: The trust fund established by the Trust Agreement, the assets
of which consist of the Mortgage Loans and any related assets.
Trustee: Citibank, N.A., or any successor in interest, or if any successor
trustee or co-trustee shall be appointed as provided in the Trust Agreement,
then such successor trustee or such co-trustee, as the case may be.
Any capitalized terms used and not defined in this Agreement shall have
the meanings ascribed to such terms in the Trust Agreement.
-12-
ARTICLE II.
SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files.
The Seller, by execution and delivery of this Agreement, does hereby
contract with the Servicer, subject to the terms of this Agreement, for the
servicing of the Mortgage Loans. On or before the Closing Date or Servicing
Transfer Date, as applicable, the Seller shall cause to be delivered the
Servicing Files with respect to the Mortgage Loans listed on the Mortgage Loan
Schedule to the Servicer. Each Servicing File delivered to a Servicer shall be
held in trust by such Servicer for the benefit of the Trustee; provided,
however, that the Servicer shall have no liability for any Servicing Files (or
portions thereof) not delivered by the Seller. The Servicer's possession of any
portion of the Mortgage Loan documents shall be at the will of the Trustee 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 Trustee 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 Trustee and shall be retained and maintained, in trust, by the
Servicer at the will of the Trustee 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 Trustee. 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.
(a) Subject to Section 3.01(a) hereof, as soon as practicable after the
Closing Date, the Servicing Transfer Date or the date on which a Qualifying
Substitute Mortgage Loan is delivered pursuant to Section 2.05 of the Trust
Agreement, as applicable (but in no event more than 90 days thereafter except to
the extent delays are caused by the applicable recording office), the Servicer,
at the expense of the Depositor, shall cause the Mortgage or Assignment of
Mortgage, as applicable, with respect to each MERS Eligible Mortgage Loan, to be
properly recorded in the name of MERS in the public recording office in the
applicable jurisdiction, or shall ascertain that such have previously been so
recorded and, with the cooperation of the Trustee, shall take such actions as
are necessary to cause the Trustee to be clearly identified as the owner of each
MERS Mortgage Loan and each MERS Eligible Mortgage Loan on the records of MERS
for purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
(b) Subject to Section 3.01(a) hereof, an Assignment of Mortgage in favor
of the Trustee shall be recorded as to each Non-MERS Mortgage Loan unless
instructions to the contrary are delivered to the Servicer, in writing, by the
Depositor. Subject to the preceding sentence, as soon as practicable after the
Closing Date or Servicing Transfer Date, as applicable (but in no event more
than 90 days thereafter except to the extent delays are caused by the applicable
recording office), the Servicer, at the expense of the Depositor, shall cause to
be properly recorded in each
-13-
public recording office where such Non-MERS Eligible Mortgage Loans are recorded
each Assignment of Mortgage.
(c) Additionally, the Servicer shall prepare and execute, any note
endorsements relating to any of the Non-MERS Mortgage Loans.
(d) All rights arising out of the Mortgage Loans shall be vested in the
Trustee, subject to the Servicer's right to service and administer the Mortgage
Loans hereunder in accordance with the terms of this Agreement. All funds
received on or in connection with a Mortgage Loan, other than the Servicing Fee
and other compensation to which the Servicer is entitled as set forth herein,
including but not limited to any and all servicing compensation pursuant to
Section 5.01 below, shall be received and held by the Servicer in trust for the
benefit of the Trustee pursuant to the terms of this Agreement.
(e) Any out-of-pocket costs incurred by the Servicer pursuant to this
Section 2.02 and Section 3.01(a), including any recording or other fees in
connection with the Servicer's obtaining the necessary powers of attorney (and
which are specified herein to be an expense of the Seller), shall be reimbursed
to the Servicer by the Seller within five (5) Business Days of receipt by the
Seller of an invoice for reimbursement. The Trust Fund shall not reimburse the
Seller for any such reimbursement to the Servicer.
(f) The Master Servicer and the Trustee shall have the right to examine
the books, records and other information of the Servicer, with respect to or
concerning this Agreement or the Mortgage Loans, during business hours or at
such other times as may be reasonable under applicable circumstances, upon
reasonable advance written notice to the Servicer.
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 Closing Date or Servicing Transfer Date,
as applicable, 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.
The Seller and the Servicer additionally agree as follows:
(a) The Servicer shall (i) record or cause to be recorded the Mortgage or
the Assignment of Mortgage, as applicable, with respect to all MERS Eligible
Mortgage Loans, in the name of MERS, or shall ascertain that such have
previously been so recorded; (ii) with the cooperation of the Trustee, take such
actions as are necessary to cause the Trustee to be clearly identified as the
owner of each MERS Mortgage Loan and each MERS Eligible Mortgage Loan on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS; (iii) prepare or cause to be prepared
all Assignments of Mortgage with respect to all Non-MERS Eligible Mortgage
Loans; (iv) record or cause to be recorded, subject to Section 2.02(b) hereof,
all Assignments of Mortgage with respect to Non-MERS Mortgage
-14-
Loans in the name of the Trustee; (v) pay the recording costs pursuant to
Section 2.02 hereof; and/or (vi) track such Mortgages and Assignments of
Mortgage to ensure they have been recorded. The Servicer shall be entitled to be
paid by the Seller fees for the preparation and recordation of the Mortgages and
Assignments of Mortgage. After the expenses of such recording costs pursuant to
Section 2.02 hereof shall have been paid by the Servicer, the Servicer shall
submit to the Seller a reasonably detailed invoice for reimbursement of
recording costs and fees it incurred hereunder.
(b) If applicable, 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 Loan of the transfer of the servicing thereto to the
Servicer.
(c) The Servicer shall be responsible for the preparation of and costs
associated with notifications to Mortgagors of the assumption of servicing by
the Servicer.
Consistent with the terms of this Agreement and except as provided in
Section 3.19, the Servicer may waive any late payment charge, assumption fee or
other fee that may be collected in the ordinary course of servicing the Mortgage
Loans. The Servicer shall not make any future advances to any obligor under any
Mortgage Loan, and (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable) the Servicer shall not permit any modification of any material term
of any Mortgage Loan, including any modification that would change the Mortgage
Interest Rate, defer or forgive the payment of principal or interest, reduce or
increase the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan. In the event
of any such modification which permits the deferral of interest or principal
payments on any Mortgage Loan, the Servicer shall, on the Business Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, make a Monthly Advance in
accordance with Section 4.03, in an amount equal to the difference between (i)
such month's principal and one month's interest at the Mortgage Loan Remittance
Rate on the unpaid principal balance of such Mortgage Loan and (ii) the amount
paid by the Mortgagor. The Servicer shall be entitled to reimbursement for such
advances to the same extent as for all other advances made pursuant to Section
4.03. 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 Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge or note endorsements and
all other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties; provided, further, that upon the full
release or discharge, the Servicer shall notify the related Custodian of the
related Mortgage Loan of such full release or discharge. Upon the request of the
Servicer, the Trustee shall execute and deliver to the Servicer any powers of
attorney and other documents, furnished to it by the Servicer and reasonably
satisfactory to the Trustee, necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties under this Agreement.
Notwithstanding anything contained herein to the contrary, the Servicer shall
not, without the Trustee's written consent: (i) initiate any action, suit or
proceeding solely under the Trustee's name without indicating the Servicer's
representative capacity; or (ii) take any action with the intent to cause, and
that actually causes the Trustee to be
-15-
registered to do business in any state. Promptly after the execution of any
assumption, modification, consolidation or extension of any Mortgage Loan, the
Servicer shall forward to the Master Servicer copies of any documents evidencing
such assumption, modification, consolidation or extension. Notwithstanding
anything to the contrary contained in this Servicing Agreement, the Servicer
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan that would cause any REMIC created under the Trust Agreement
to fail to qualify as a REMIC or result in the imposition of any tax under
Section 860F(a) or Section 860G(d) of the Code.
Notwithstanding anything to the contrary in this Agreement, the Servicer
shall not (unless the Servicer determines, in its own discretion, that there
exists a situation of extreme hardship to the Mortgagor), waive any premium or
penalty in connection with a prepayment of principal of any Mortgage Loan, and
shall not consent to the modification of any Mortgage Note to the extent that
such modification relates to payment of a prepayment premium or penalty.
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 Xxxxxx Xxx Guides, and the Master Servicer's and Seller's
reliance on the Servicer.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the Closing Date or Servicing Transfer Date, as
applicable, 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,
in the form of time deposit or demand accounts, titled as directed by the Master
Servicer. The Custodial Account shall be an Eligible Deposit Account established
with an Eligible Institution. Any funds deposited in the Custodial Account may
be invested in Eligible Investments subject to the provisions of Section 3.11
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 in the form of Exhibit B. A copy of such
certification or letter agreement shall be furnished to the Master Servicer not
later than 30 calendar days after the Closing Date, and, upon request, to any
subsequent owner of the Mortgage Loans.
-16-
The Servicer shall deposit in the Custodial Account within two Business
Days of receipt, and retain therein, the following collections received by the
Servicer and payments made by the Servicer after the Cut-off Date (other than
scheduled payments of principal and interest due on or before the Cut-off Date
or received by the Servicer prior to the Cut-off Date but allocable to the
period subsequent thereto or Servicing Transfer Date), as applicable:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds (other than amounts applied to the
restoration or repair of the Mortgaged Property or immediately released to the
Mortgagor in accordance with Accepted Servicing Practices);
(v) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor;
(vi) with respect to each Principal Prepayment in full or in part,
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 up to a maximum amount per month of the Servicing Fee actually received
for such month for the Mortgage Loans;
(vii) all Monthly Advances made by the Servicer pursuant to Section
4.03;
(viii) any amounts required to be deposited by the Servicer in
connection with the deductible clause in any blanket hazard insurance policy;
(ix) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds;
(x) any Prepayment Penalty Amount; and
(xi) any other amount required hereunder to be deposited by the
Servicer in the Custodial Account.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of the Servicing Fee and Ancillary
Income need not be deposited by the Servicer into the Custodial Account.
Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Additionally,
-17-
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 Master Servicer in the amounts and in
the manner provided for in Section 4.01;
(ii) with respect to each LPMI Loan, in the amount of the related
LPMI Fee, to make payments with respect to premiums for LPMI Policies in
accordance with Section 3.07;
(iii) 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, Condemnation 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;
(iv) to pay itself investment earnings on funds deposited in the
Custodial Account;
(v) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(vi) to transfer funds to another Eligible Institution in accordance
with Section 3.11 hereof;
(vii) to invest funds in certain Eligible Investments in accordance
with Section 3.11 hereof;
(viii) to reimburse itself to the extent of funds in the Custodial
Account for Monthly Advances of the Servicer's funds made pursuant to Section
4.03, the Servicer's right to reimburse itself pursuant to this subclause (viii)
with respect to any Mortgage Loan being limited to amounts received on or in
respect of the related Mortgage Loan which represent late recoveries of payments
of principal or interest with respect to which a Monthly Advance was made, it
being understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Trust Fund, provided, however,
that following the final liquidation of a Mortgage Loan, the Servicer may
reimburse itself for previously unreimbursed Monthly Advances in excess of
Liquidation Proceeds or Insurance Proceeds with respect to such Mortgage Loan
from any funds in the Custodial Account, it being understood, in the case of any
such reimbursement, that the Servicer's right thereto shall be prior to the
rights of the Trust Fund. The Servicer may recover at any time from amounts on
deposit in the Custodial Account the amount of any Monthly Advances that the
Servicer deems nonrecoverable or that remain
-18-
unreimbursed to the Servicer from related Liquidation Proceeds after the final
liquidation of the Mortgage Loan;
(ix) to reimburse itself for unreimbursed Servicing Advances, and
for any unpaid Servicing Fees, the Servicer's right to reimburse itself pursuant
to this subclause (ix) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds and other amounts received in respect of the related REO
Property, and such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to the Mortgage Loan, it being understood that,
in the case of any such reimbursement, the Servicer's right thereto shall be
prior to the rights of the Trust Fund;
(x) to reimburse itself for remaining unreimbursed Servicing
Advances with respect to any defaulted Mortgage Loan as to which the Servicer
has determined that all amounts that it expects to recover on behalf of the
Trust Fund from or on account of such Mortgage Loan have been recovered;
(xi) to reimburse itself for expenses incurred or reimbursable to
the Servicer pursuant to Sections 3.07, 3.12, 3.13, 3.14 and 6.03 to the extent
not previously reimbursed under clause (ix) of this Section 3.04; and
(xii) to withdraw funds deposited 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 one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled as
directed by the Master Servicer. Each Escrow Account shall be an Eligible
Deposit Account established with an Eligible Institution 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 C. A copy of such certification or letter agreement shall be
furnished to the Master Servicer not later than 30 calendar days after the
Closing Date, 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 that are to be applied to the restoration or repair of any Mortgaged
Property.
-19-
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.
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) to reimburse the Servicer for any Servicing Advance made by the
Servicer with respect to a related Mortgage Loan, but only from amounts received
on the related Mortgage Loan which represent late collections of Escrow
Payments.
(v) for application to restoration or repair of the Mortgaged
Property in accordance with the Xxxxxx Xxx Guides;
(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
(vii) to remove funds inadvertently placed in the Escrow Account by
the Servicer; and
(viii) to clear and terminate the Escrow Account on the termination
of this Agreement.
Section 3.07 Maintenance of PMI Policy and/or LPMI Policy; Claims.
The Servicer shall comply with all provisions of applicable state and
federal law relating to the cancellation of, or collection of premiums with
respect to, PMI Policies, including, but not limited to, the provisions of the
Homeowners Protection Act of 1998, and all regulations promulgated thereunder,
as amended from time to time.
-20-
With respect to each Mortgage Loan (other than LPMI Loans) with a loan to
value ratio at origination in excess of 80%, the Servicer shall maintain or
cause the Mortgagor to maintain (to the extent that the Mortgage Loan requires
the Mortgagor to maintain such insurance) in full force and effect a PMI Policy,
and shall pay or shall cause the Mortgagor to pay the premium thereon on a
timely basis, until the LTV of such Mortgage Loan is reduced to 80%. In the
event that such PMI Policy shall be terminated, the Servicer shall obtain from
another Qualified Insurer a comparable replacement policy, with a total coverage
equal to the remaining coverage of such terminated PMI Policy, at substantially
the same fee level. The Servicer shall not take any action which would result in
noncoverage under any applicable PMI Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder. In connection with
any assumption or substitution agreements entered into or to be entered into
with respect to a Mortgage Loan, the Servicer shall promptly notify the insurer
under the related PMI Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such PMI Policy and shall take all
actions which may be required by such insurer as a condition to the continuation
of coverage under such PMI Policy. If such PMI Policy is terminated as a result
of such assumption or substitution of liability, the Servicer shall obtain a
replacement PMI Policy as provided above.
The Servicer shall take all such actions as are necessary to service,
maintain and administer the LPMI Loans in accordance with the LPMI Policy and to
perform and enforce the rights of the insured under such LPMI Policy. Except as
expressly set forth herein, the Servicer shall have full authority on behalf of
the Trust Fund to do anything it reasonably deems appropriate or desirable in
connection with the servicing, maintenance and administration of the LPMI
Policy. The Servicer shall not modify or assume a Mortgage Loan covered by the
LPMI Policy or take any other action with respect to such Mortgage Loan which
would result in non-coverage under the LPMI Policy of any loss which, but for
the actions of the Servicer, would have been covered thereunder. If the LPMI
Insurer fails to pay a claim under the LPMI Policy as a result of breach by the
Servicer of its obligations hereunder or under the LPMI Policy, the Servicer
shall be required to deposit in the Custodial Account on or prior to the next
succeeding Remittance Date an amount equal to such unpaid claim from its own
funds without any right to reimbursement from the Trust Fund. The Servicer shall
cooperate with the LPMI Insurer and the Master Servicer and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Servicer to which the Servicer has access with respect to any
LPMI Loan; provided, however, notwithstanding anything to the contrary contained
in any LPMI Policy, the Servicer shall not be required to submit any reports to
the LPMI Insurer until a reporting date that is at least 15 days after the
Servicer has received sufficient loan level information from each Seller, the
Master Servicer or the LPMI Insurer to appropriately code its servicing system
in accordance with the LPMI Insurer's requirements.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Trustee, claims to the insurer
under any PMI Policy or LPMI Policy in a timely fashion in accordance with the
terms of such PMI Policy or LPMI Policy and, in this regard, to take such action
as shall be necessary to permit recovery under any PMI Policy or LPMI Policy
respecting a defaulted Mortgage Loan. Any amounts collected by the Servicer
under any PMI Policy or LPMI Policy shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 3.04.
-21-
Section 3.08 Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall keep in force during the term of this Agreement a
Fidelity Bond and Errors and Omissions Insurance Policy. Such Fidelity Bond and
Errors and Omissions Insurance shall be maintained with recognized insurers and
shall be in such form and amount as would permit the Servicer to be qualified as
a Xxxxxx Mae or Xxxxxxx Mac seller-servicer. The Servicer shall be deemed to
have complied with this provision if an affiliate of the Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Servicer. The Servicer shall furnish to the Master Servicer a copy of each
such bond and insurance policy if (i) the Master Servicer so requests and (ii)
the Servicer is not an affiliate of Xxxxxx Brothers Inc. at the time of such
request.
Section 3.09 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 Master Servicer such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Servicer or the receipt of
notice from the Master Servicer 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
thereby.
Section 3.10 Completion and Recordation of Assignments of Mortgage.
As soon as practicable after the Closing Date, the Servicing Transfer Date
or the date on which a Qualifying Substitute Mortgage Loan is delivered pursuant
to Section 2.05 of the Trust Agreement, as applicable (but in no event more than
90 days thereafter except to the extent delays are caused by the applicable
public recording office), the Servicer shall cause the endorsements on the
Mortgage Note (if applicable), and the Assignments of Mortgage (subject to
Section 3.01(a)) to be completed in the name of the Trustee (or MERS, as
applicable).
Section 3.11 Protection of Accounts.
The Servicer may transfer any Custodial Account or any Escrow Account to a
different Eligible Institution from time to time; provided that in the event the
Custodial Account or any Escrow Account is held in a depository institution or
trust company that ceases to be an Eligible Institution, the Servicer shall
transfer such Custodial Account or Escrow Account, as the case may be, to an
Eligible Institution. The Servicer shall give notice to the Master Servicer of
any change in the location of the Custodial Account and deliver to the Master
Servicer a certification
-22-
notice in the form of Exhibit B or Exhibit C, as applicable, with respect to
such Eligible Institution.
The Servicer shall bear any expenses, losses or damages sustained by the
Master Servicer or the Trustee if the Custodial Account and/or the Escrow
Account are not demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may at
the option of the Servicer be invested in Eligible Investments. Any such
Eligible Investment shall mature no later than the Business Day immediately
preceding the related Remittance Date; provided, however, that if such Eligible
Investment is an obligation of an Eligible Institution (other than the Servicer)
that maintains the Custodial Account or the Escrow Account, then such Eligible
Investment may mature on the related Remittance Date. Any such Eligible
Investment shall be made in the name of the Servicer in trust for the benefit of
the Trustee. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Servicer and may be withdrawn at any time by the
Servicer. 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 3.12 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy and LPMI Policy (if any) premiums and fire
and hazard insurance coverage and shall obtain, from time to time, all bills for
the payment of such charges (including renewal premiums) and shall effect
payment thereof prior to the applicable penalty or termination date, employing
for such purpose deposits of the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Servicer in amounts sufficient for
such purposes, as allowed under the terms of the Mortgage. The Servicer shall
not be required to maintain records with respect to the payment of LPMI Premiums
unless the Servicer shall be required to make payment of such premiums and such
requirement shall be indicated on the Mortgage Loan Schedule with respect to
each applicable Mortgage Loan. The Servicer assumes full responsibility for the
timely payment of all such bills, shall effect timely payment of all such
charges irrespective of each Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments, and shall make advances from its own
funds to effect such payments. With regard to any Mortgage Loans for which the
Mortgagor is not required to escrow Escrow Payments with the Servicer, the
Servicer shall use reasonable efforts consistent with Accepted Servicing
Practices to determine that any such payments are made by the Mortgagor at the
time they first became due and shall insure that the Mortgaged Property is not
lost to a tax lien as a result of nonpayment and that such Mortgage is not left
uninsured and shall make advances from its own funds to effect any such
delinquent payments to avoid the lapse of insurance coverage on the Mortgaged
Property or to avoid the imposition of a tax lien.
-23-
Section 3.13 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, in an amount which is at least equal to the greater of (i) the then
outstanding principal balance of the Mortgage Loan and (ii) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor or the loss
payee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect with a
generally acceptable insurance carrier in an amount representing coverage equal
to the lesser of (i) the minimum amount required, under the terms of coverage,
to compensate for any damage or loss on a replacement cost basis (or the unpaid
balance of the mortgage if replacement cost coverage is not available for the
type of building insured) and (ii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973, as amended. If at any
time during the term of the Mortgage Loan, the Servicer determines in accordance
with applicable law and pursuant to the Xxxxxx Xxx Guides that a Mortgaged
Property is located in a special flood hazard area and is not covered by flood
insurance or is covered in an amount less than the amount required by the Flood
Disaster Protection Act of 1973, as amended, the Servicer shall notify the
related Mortgagor that the Mortgagor must obtain such flood insurance coverage,
and if said Mortgagor fails to obtain the required flood insurance coverage
within forty-five (45) days after such notification, the Servicer shall force
place the required flood insurance on the Mortgagor's behalf.
Section 3.14 Maintenance of Mortgage Blanket Insurance.
The Servicer shall obtain and maintain a blanket policy insuring against
losses arising from fire and hazards covered under extended coverage on all of
the Mortgage Loans. To the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 3.13 and otherwise complies
with all other requirements of Section 3.13, it shall conclusively be deemed to
have satisfied its obligations as set forth in Section 3.13. Any amounts
collected by the Servicer under any such policy relating to a Mortgage Loan
shall be deposited in the Custodial Account or Escrow Account subject to
withdrawal pursuant to Sections 3.04 or 3.06. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
3.13, and there shall have been a loss which would have been covered by such
policy, the Servicer shall deposit in the Custodial Account at the time of such
loss the amount not otherwise payable under the blanket policy because of such
deductible clause, such amount to be deposited from the Servicer's funds,
without reimbursement therefor.
-24-
Section 3.15 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Trustee or the Master
Servicer prior to releasing any Insurance Proceeds or Condemnation Proceeds to
the Mortgagor to be applied to the restoration or repair of the Mortgaged
Property if such release is in accordance with Accepted Servicing Practices. At
a minimum, with respect to claims greater than $10,000, the Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens; and
(iii) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
Section 3.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Trustee or its nominee (or MERS, as
applicable, provided however that if the Servicer deems it to be in the best
interest of the Trustee, the Servicer may take title in the name of a person or
persons other than MERS), or in the event the Trustee 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 (with a copy delivered to the
Trustee) 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
Trustee shall acknowledge in writing that such title is being held as nominee
for the Trustee.
The Servicer shall manage, conserve, protect and operate each REO Property
for the Trustee 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 Trustee and the Trust Fund. If the Servicer
determines that it is in the best interest of the Trustee and the Trust Fund to
not proceed with foreclosure or accept a deed in lieu of foreclosure, the
Servicer shall have the right to do so, whereupon the related Mortgage Loan
shall be deemed to be finally liquidated and the Servicer shall have the right
to release the lien of the Mortgage on the related Mortgage Property and the
Servicer shall be entitled to reimbursement for all outstanding unreimbursed
-25-
Servicing Advances and Monthly Advances from the Custodial Account in accordance
with Section 3.04(viii).
The Servicer may permit an obligor to pay off a non-performing Mortgage
Loan at less than its unpaid principal balance or charge-off all or a portion of
such non-performing Mortgage Loan if such discounted payoff or charge-off is in
accordance with Accepted Servicing Practices and the Servicer believes that such
discounted payoff or charge-off is in the best interest of the Trust Fund;
provided that in the case of any proposed discounted payoff or proposed
charge-off, the Servicer shall notify the Master Servicer, by telecopy and
telephone, of the proposed discounted payoff or charge-off; provided further
that any such discounted payoff or charge-off is incident to the default or
imminent default of such non-performing Mortgage Loan within the meaning of
Section 860F(a) of the Code. The Master Servicer shall be deemed to have
approved the discounted payoff or charge-off of any Mortgage Loan unless the
Master Servicer notifies the Servicer in writing, within five (5) Business Days
after its receipt of the related notice, that it disapproves of the discounted
payoff or charge-off, in which case the Servicer shall not proceed with such
discounted payoff or charge-off.
Notwithstanding anything to the contrary contained in this Section 3.16,
in connection with a foreclosure or acceptance of a deed in lieu of foreclosure,
in the event the Servicer has reasonable cause to believe that a Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, or if the
Trustee or the Master Servicer otherwise requests, an environmental inspection
or review of such Mortgaged Property to be conducted by a qualified inspector
shall be arranged by the Servicer. Upon completion of the inspection, the
Servicer shall provide the Trustee and the Master Servicer with a written report
of such environmental inspection. In the event that the environmental inspection
report indicates that the Mortgaged Property is contaminated by hazardous or
toxic substances or wastes, the Servicer shall not proceed with foreclosure or
acceptance of a deed in lieu of foreclosure. In the event that the environmental
inspection report is inconclusive as to whether or not the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, the Servicer shall not,
without the prior approval of the Master Servicer, proceed with foreclosure or
acceptance of a deed in lieu of foreclosure. In such instance, the Master
Servicer shall be deemed to have approved such foreclosure or acceptance of a
deed in lieu of foreclosure unless the Master Servicer notifies the Servicer in
writing, within two (2) Business Days after its receipt of written notice of the
proposed foreclosure or deed in lieu of foreclosure from the Servicer, that it
disapproves of the related foreclosure or acceptance of a deed in lieu of
foreclosure. The Servicer shall be reimbursed for all Servicing Advances made
pursuant to this paragraph with respect to the related Mortgaged Property from
the Custodial Account.
Prior to acceptance by the Servicer of an offer to sell any REO Property,
the Servicer shall notify the Master Servicer of such offer in writing which
notification shall set forth all material terms of said offer (each a "Notice of
Sale"). The Master Servicer shall be deemed to have approved the sale of any REO
Property unless the Master Servicer notifies the Servicer in writing, within two
(2) Business Days after its receipt of the related Notice of Sale, that it
disapproves of the related sale, in which case the Servicer shall not proceed
with the 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 equal to $1,500.
-26-
In the event that the Trust Fund acquires any REO Property in connection
with a default or imminent default on a Mortgage Loan, the Servicer shall
dispose of such REO Property not later than the end of the third taxable year
after the year of its acquisition by the Trust Fund unless the Servicer has
applied for and received a grant of extension from the Internal Revenue Service
to the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, the applicable Trust REMIC may hold
REO Property for a longer period without adversely affecting the REMIC status of
such REMIC or causing the imposition of a federal or state tax upon such REMIC.
If the Servicer has received such an extension, then the Servicer shall continue
to attempt to sell the REO Property for its fair market value for such period
longer than three years as such extension permits (the "Extended Period"). If
the Servicer has not received such an extension and the Servicer is unable to
sell the REO Property within the period ending 3 months before the end of such
third taxable year after its acquisition by the Trust Fund or if the Servicer
has received such an extension, and the Servicer is unable to sell the REO
Property within the period ending three months before the close of the Extended
Period, the Servicer shall, before the end of the three-year period or the
Extended Period, as applicable, (i) purchase such REO Property at a price equal
to the REO Property's fair market value or (ii) auction the REO Property to the
highest bidder (which may be the Servicer) in an auction reasonably designed to
produce a fair price prior to the expiration of the three-year period or the
Extended Period, as the case may be. The Trustee shall sign any document or take
any other action reasonably requested by the Servicer which would enable the
Servicer, on behalf of the Trust Fund, to request such grant of extension.
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.
Notwithstanding any other provisions of this Agreement, no REO Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used or held by or on behalf of the Trust Fund in such a manner, or
pursuant to any terms or for a period that would: (i) cause such REO Property to
fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code or (ii) result in the imposition of any tax upon any
REMIC included in the Trust Fund. Subject to the approval of the Master Servicer
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 Trust Fund.
The Servicer shall withdraw from 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 Xxxxxx Xxx Guides.
The Servicer shall make monthly distributions on each Remittance Date to the
Master Servicer 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 3.16 and of any reserves reasonably required from time to time to be
maintained to satisfy anticipated liabilities for such expenses).
Section 3.17 Real Estate Owned Reports.
-27-
Together with the statement furnished pursuant to Section 4.02, the
Servicer shall furnish to the Master Servicer 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 Master Servicer shall
reasonably request.
Section 3.18 MERS.
(a) The Servicer shall use its Best Efforts to cause the Trustee to be
identified as the owner of each MERS Mortgage Loan on the records of MERS for
purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
(b) The Servicer shall maintain in good standing its membership in MERS.
In addition, the Servicer shall comply with all rules, policies and procedures
of MERS, including the Rules of Membership, as amended, and the MERS Procedures
Manual, as amended.
(c) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall promptly notify MERS as to any transfer of beneficial ownership
of such Mortgage Loans of which the Servicer has notice.
(d) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall notify MERS as to any transfer of servicing pursuant to Section
9.01 within 10 Business Days of such transfer of servicing. The Servicer shall
cooperate with the Trustee, the Master Servicer and any successor servicer to
the extent necessary to ensure that such transfer of servicing is appropriately
reflected on the MERS system.
Section 3.19 Waiver of Prepayment Penalty Amounts.
Except as provided below, the Servicer or any designee of the Servicer
shall not waive any Prepayment Penalty Amount with respect to any Mortgage Loan.
If the Servicer or its designee fails to collect a Prepayment Penalty Amount at
the time of the related prepayment of any Mortgage Loan subject to such
Prepayment Penalty Amount, the Servicer shall pay to the Trust Fund at such time
(by deposit to the Custodial Account) an amount equal to the amount of the
Prepayment Penalty Amount not collected; provided, however, the Servicer shall
not have any obligation to pay the amount of any uncollected Prepayment Penalty
Amount under this Section 3.19 if the failure to collect such amount is the
result of inaccurate or incomplete information in the Prepayment Penalty Amount
Schedule provided by the Seller and which is included as part of the Mortgage
Loan Schedule attached hereto as Exhibit A. The Prepayment Penalty Amounts
listed on the Prepayment Penalty Amount Schedule attached hereto as Exhibit A
are complete, true and accurate and may be relied on by the Servicer in its
calculation of Prepayment Penalty Amounts. If the Prepayment Penalty Amount data
set forth on Exhibit A is incorrect, then the Servicer shall have no liability
for any loss resulting from calculation of Prepayment Penalty Amounts using the
data provided. Notwithstanding the above, the Servicer or its designee may waive
a Prepayment Penalty Amount without paying to the Trust Fund the amount of such
Prepayment Penalty Amount only if such Prepayment Penalty Amount (i) relates to
a defaulted Mortgage Loan or a reasonably foreseeable default, such waiver is
standard and
-28-
customary in servicing similar mortgage loans to the Mortgage Loan, and such
waiver, in the reasonable judgment of the Servicer would maximize recovery of
total proceeds from the Mortgage Loan, taking into account the amount of such
Prepayment Charge and the related Mortgage Loan, or (ii) relates to a prepayment
charge the collection of which, if collected, would be a violation of applicable
laws.
ARTICLE IV.
PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances.
On each Remittance Date, no later than 3:00 p.m. Eastern Standard Time,
the Servicer shall remit on a scheduled/scheduled basis by wire transfer of
immediately available funds to the Master Servicer (i) all amounts deposited in
the Custodial Account as of the close of business on the last day of the related
Due Period (net of charges against or withdrawals from the Custodial Account
pursuant to Section 3.04), plus (ii) all Monthly Advances, if any, which the
Servicer is obligated to remit pursuant to Section 4.03 (and which the Servicer
has not already deposited in the Custodial Account pursuant to Section
3.03(viii)); minus (iii) any amounts attributable to Principal Prepayments,
Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds or REO
Disposition Proceeds received after the applicable Prepayment Period, which
amounts shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 3.03(vi),
and minus (iv) any amounts attributable to Monthly Payments collected but due on
a Due Date or Due Dates subsequent to the first day of the month in which such
Remittance Date occurs, which amounts shall be remitted on the Remittance Date
next succeeding the Due Date related to such Monthly Payment.
With respect to any remittance received by the Master Servicer after the
Business Day on which such payment was due, the Servicer shall pay to the Master
Servicer 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 (2) 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 by the Trustee or the Master Servicer of any Event of
Default.
All remittances required to be made to the Master Servicer shall be made
to the following wire account or to such other account as may be specified by
the Master Servicer from time to time:
-00-
XXXxxxxx Xxxxx Xxxx, X.X.
Xxx Xxxx, Xxx Xxxx
ABA#: 000-000-000
Account Name: Aurora Loan Services LLC
Master Servicing Payment Clearing Account
Account Number: 066-611059
Beneficiary: Aurora Loan Services LLC
For further credit to: SASCO 2006-3H
Section 4.02 Statements to Master Servicer.
(a) Not later than the tenth (10th) calendar day of each month (or if such
calendar day is not a Business Day, the immediately preceding Business Day), the
Servicer shall furnish to the Master Servicer and the Securities Administrator
(i) a monthly remittance advice in the format set forth in Exhibit D-1 hereto
and a monthly defaulted loan report in the format set forth in Exhibit D-2
hereto (or in such other format mutually agreed between the Servicer and the
Master Servicer) relating to the period ending on the last day of the preceding
calendar month and (ii) all such information required pursuant to clause (i)
above on a magnetic tape or other similar media reasonably acceptable to the
Master Servicer. The format of this monthly reporting may be amended from time
to time to the extent necessary to comply with applicable law or the terms of
the Trust Agreement.
Not later than the seventeenth day of each month, the Servicer shall
furnish to the Master Servicer and the Securities Administrator (a) a monthly
payoff remittance advice regarding any Principal Prepayments in full applied to
the related Mortgage Loan on or after the seventeenth day of the month preceding
the month of such reporting date, but on or before the sixteenth day of the
month of such reporting date, containing such information and in such format as
is mutually acceptable to the Master Servicer and the Servicer, and in any event
containing sufficient information to permit the Master Servicer to properly
report Principal Prepayment in full information to the Trustee under the Trust
Agreement and (b) all such information required pursuant to clause (a) above in
electronic format, on magnetic tape or other similar media reasonably acceptable
to the Master Servicer.
(b) In addition, not more than 60 days after the end of each calendar
year, commencing December 31, 2006, 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 such 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.
The Master Servicer may request that the Servicer provide, at the Master
Servicer's expense, an appraisal or a broker price opinion on any Mortgage Loan
which is 90 days or more delinquent. The Servicer shall use its best efforts to
deliver such appraisal or broker price opinion to the Master Servicer within 15
calendar days after such request.
-30-
Beginning with calendar year 2006, the Servicer shall provide the Master
Servicer with such information concerning the Mortgage Loans as is necessary for
the Trustee or the Securities Administrator to prepare the Trust Fund's federal
income tax return as the Trustee or the Securities Administrator may reasonably
request from time to time.
(c) The Servicer shall promptly notify the Trustee, the Securities
Administrator, the Master Servicer and the Depositor (i) of any legal
proceedings pending against the Servicer of the type described in Item 1117 (ss.
229.1117) of Regulation AB and (ii) if the Servicer shall become (but only to
the extent not previously disclosed to the Securities Administrator, the Master
Servicer and the Depositor) at any time an affiliate of any of the parties
listed on Exhibit I to this Agreement.
If so requested by the Trustee, the Securities Administrator, the Master
Servicer or the Depositor on any date following the date on which information
was first provided to the Trustee, the Securities Administrator and the
Depositor pursuant to the preceding sentence, the Servicer shall, within five
Business Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in Section 6.01(j) or, if such a
representation and warranty is not accurate as of the date of such request,
provide reasonable adequate disclosure of the pertinent facts, in writing, to
the requesting party.
The Servicer shall provide to the Securities Administrator, the Trustee,
the Master Servicer and the Depositor prompt notice of the occurrence of any of
the following: any event of default under the terms of this Agreement, any
merger, consolidation or sale of substantially all of the assets of the
Servicer, the Servicer's engagement of any Subservicer or Subcontractor to
perform or assist in the performance of any of the Servicer's obligations under
this Agreement, any material litigation involving the Servicer, and any
affiliation or other significant relationship between the Servicer and other
transaction parties.
(d) Not later than the tenth calendar day of each month (or if such
calendar day is not a Business Day, the immediately preceding Business Day), the
Servicer shall provide to the Securities Administrator, the Trustee, the Master
Servicer and the Depositor notice of the occurrence of any material
modifications, extensions or waivers of terms, fees, penalties or payments
relating to the Mortgage Loans during the related Due Period or that have
cumulatively become material over time (Item 1121(a)(11) of Regulation AB) along
with all information, data, and materials related thereto as may be required to
be included in the related Distribution Report on Form 10-D.
Section 4.03 Monthly Advances by Servicer.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution, or both, an amount equal to the aggregate
of all Monthly Advances relating to Monthly Payments which were due on the
Mortgage Loans during the applicable Due Period and which were delinquent at the
close of business on the immediately preceding Determination Date or which were
deferred pursuant to Section 3.01. Any amounts held for future distribution and
so used shall be replaced by the Servicer by deposit in the Custodial Account on
or before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than
-31-
remittances to the Master Servicer required to be made on such Remittance Date.
The Servicer shall keep appropriate records of such amounts and will provide
such records to the Master Servicer upon request. The Servicer's obligation to
make such Monthly Advances as to any Mortgage Loan will continue through the
last Monthly Payment due prior to the payment in full of the Mortgage Loan, or
through the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan unless the Servicer deems such Monthly Advances to be
unrecoverable, as evidenced by an Officer's Certificate of the Servicer
delivered to the Master Servicer.
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 (i) the relevant Servicing Fee for each
Mortgage Loan remaining subject to this Agreement during any month and (ii)
Ancillary Income. In addition, if at any time the Servicer is the Retained
Interest Holder with respect to any Mortgage Loans, then the Servicer, as the
Retained Interest Holder, shall retain an amount equal to the Retained Interest
relating to such Mortgage Loans; provided, that (i) the Trustee and the Master
Servicer shall have no obligation to make payment of the Retained Interest to
the Servicer and (ii) the Servicer's right to retain the Retained Interest is
limited to (and the Retained Interest may only be retained from) the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds) of the Monthly Payments collected by the Servicer with respect to
those Mortgage Loans for which payment is in fact made of the entire amount of
the Monthly Payment. The Servicing Fee shall be payable monthly. The Servicing
Fees shall be payable only at the time of and with respect to those Mortgage
Loans for which payment is in fact made of the entire amount of the Monthly
Payment or as otherwise provided in Section 3.04. The obligation of the Trust
Fund to pay the Servicing Fees is limited as provided in Section 3.04. The
aggregate of the Servicing Fees payable to the Servicer for any month with
respect to the Mortgage Loans shall be reduced by any Prepayment Interest
Shortfall Amount with respect to such month. Any Prepayment Interest Excess
Amount shall be retained by, or paid to, the Servicer as a part of the Servicing
Fee.
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.
Section 5.02 Report on Attestation of Compliance with Applicable Servicing
Criteria.
The Servicer shall cause, using its reasonable best efforts, on or before
March 1st (but in no event later than March 15th) of each year, beginning in
2007, at its own expense, a firm of independent public accountants (who may also
render other services to Servicer), which is a member of the American Institute
of Certified Public Accountants, to furnish to the Seller, the Trustee, the
Depositor and Master Servicer (i) year-end audited (if available) financial
statements of the Servicer and (ii) a report to the effect that such firm
attests to, and reports on, the
-32-
assessment made by such asserting party pursuant to Section 5.04 below, which
report shall be made in accordance with standards for attestation engagements
issued or adopted by the Public Company Accounting Oversight Board. In addition,
the Servicer shall, using its best reasonable efforts, on or before March 1st
(but in no event later than March 15th) of each year, beginning in 2007, at its
own expense, furnish to the Seller, the Trustee, the Depositor and Master
Servicer a report meeting the requirements of clause (ii) above regarding the
attestation of any Subservicer or Subcontractor which is "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB (each,
without respect to any threshold limitations in Instruction 2. to Item 1122 of
Regulation AB, a "Participating Entity").
Section 5.03 Annual Officer's Certificate.
(a) The Servicer shall deliver, using its reasonable best efforts, on or
before March 1st (but in no event later than March 15th) of each year, beginning
in 2007, at its own expense, to the Seller, the Trustee, the Depositor and the
Master Servicer with respect to the period ending on the immediately preceding
December 31, a Servicing Officer's certificate in the form of Exhibit J hereto,
stating, as to each signer thereof, that (1) a review of the activities of the
Servicer during such preceding calendar year or portion thereof and of its
performance under this Agreement for such period has been made under such
Servicing Officer's supervision and (2) to the best of such officers' knowledge,
based on such review, the Servicer has fulfilled all of its obligations under
this Agreement in all material respects throughout such year (or applicable
portion thereof), or, if there has been a failure to fulfill any such obligation
in any material respect, specifically identifying each such failure known to
such Servicing Officer and the nature and status thereof, including the steps
being taken by the Servicer to remedy such default.
(b) For so long as a certificate under the Xxxxxxxx-Xxxxx Act of 2002, as
amended, ("Xxxxxxxx-Xxxxx") is required to be given on behalf of the Trust Fund,
no later than March 1st of each calendar year (or if not a Business Day, the
immediately preceding Business Day), beginning with March 1, 2007, a Servicing
Officer shall execute and deliver an Officer's Certificate to the Master
Servicer, the Trustee and the Depositor for the benefit of the Trust Fund and
the Master Servicer, the Trustee and the Depositor and their officers, directors
and affiliates, in the form of Exhibit F hereto.
(c) The Servicer shall indemnify and hold harmless the Seller, the
Trustee, the Master Servicer, the Depositor and their respective officers,
directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 5.03 or the negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the Master
Servicer, the Trustee and/or the Depositor, then the Servicer agrees that it
shall contribute to the amount paid or payable by the Master Servicer, the
Trustee and/or the Depositor as a result of the losses, claims, damages or
liabilities of the Master Servicer, the Trustee and/or the Depositor in such
proportion as is appropriate to reflect the relative fault of the Master
Servicer, the Trustee and/or the Depositor on the one hand and the Servicer on
the other in connection with a breach of the Servicer's obligations under this
Section 5.03 or the Servicer's negligence, bad faith or willful misconduct in
connection therewith.
-33-
Section 5.04 Report on Assessment of Compliance with Applicable Servicing
Criteria.
The Servicer shall, using its best reasonable efforts, on or before March
1st, but in no event later than March 15th, of each calendar year, beginning in
March, 2007, deliver to the Seller, the Trustee, the Master Servicer and the
Depositor a report regarding its assessment of compliance with the servicing
criteria identified in Exhibit H attached hereto, as of and for the period
ending the end of the fiscal year of the Trust (which, unless otherwise
identified to the Servicer in writing, shall be the calendar year) for the year
prior to the year of delivery of the report, with respect to asset-backed
security transactions taken as a whole and that are backed by the same asset
type backing such asset-backed securities. Such report shall address all of the
servicing criteria specified in Exhibit H. Each such report shall include (a) a
statement of the party's responsibility for assessing compliance with the
servicing criteria applicable to such party, (b) a statement that such party
used the criteria identified in Item 1122(d) of Regulation AB (ss. 229.1122(d))
to assess compliance with the applicable servicing criteria, (c) disclosure of
any material instance of noncompliance identified by such party, and (d) a
statement that a registered public accounting firm has issued an attestation
report on such party's assessment of compliance with the applicable servicing
criteria, which report shall be delivered by the Servicer as provided in Section
5.02.
Section 5.05 Transfers of Mortgaged Property.
The Servicer shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Servicer shall not exercise such
rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related PMI Policy or
LPMI Policy, if any.
If the Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Servicer shall make all commercially
reasonable best efforts to enter into (i) an assumption and modification
agreement with the person to whom such property has been conveyed, pursuant to
which such person becomes liable under the Mortgage Note and the original
Mortgagor remains liable thereon or (ii) in the event the Servicer is unable
under applicable law to require that the original Mortgagor remain liable under
the Mortgage Note and the Servicer has the prior consent of the primary mortgage
guaranty insurer, a substitution of liability agreement with the owner of the
Mortgaged Property pursuant to which the original Mortgagor is released from
liability and the owner of the Mortgaged Property is substituted as Mortgagor
and becomes liable under the Mortgage Note; provided that no such substitutions
should be permitted unless such person satisfies the underwriting criteria of
the Servicer and has a credit risk rating at least equal to that of the original
Mortgagor. The Mortgage Loan, as assumed, shall conform in all respects to the
requirements, representations and warranties of this Agreement. The Servicer
shall notify the Master Servicer that any such assumption or substitution
agreement has been contemplated by forwarding to the Master Servicer a copy of
-34-
such assumption or substitution agreement (indicating the Mortgage File to which
it relates). The Servicer shall forward an original copy of such agreement to
the Custodian to be held by the Custodian with the other documents related to
such Mortgage Loan. The Servicer shall be responsible for recording any such
assumption or substitution agreements. In connection with any such assumption or
substitution agreement, the Monthly Payment on the related Mortgage Loan shall
not be changed but shall remain as in effect immediately prior to the assumption
or substitution, the Mortgage Interest Rate, the stated maturity or the
outstanding principal amount of such Mortgage Loan shall not be changed nor
shall any required monthly payments of principal or interest be deferred or
forgiven. Any assumption fee collected by the Servicer for entering into an
assumption agreement shall be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan
nor the outstanding principal amount of the Mortgage Loan shall be changed.
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 Seller, the Master Servicer, the Depositor and the Trustee as of the
Closing Date:
(a) Due Organization and Authority. The Servicer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization 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
-35-
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;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending (or, in the case of government authorities, known to be
contemplated) or threatened against the Servicer or any Subservicer which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Servicer or any Subservicer, or in any material impairment of the
right or ability of the Servicer or any Subservicer to carry on its business
substantially as now conducted, or in any material liability on the part of the
Servicer or any Subservicer, or which would draw into question the validity of
this Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or which would be likely to
impair materially the ability of the Servicer 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;
(g) Ability to Service. The Servicer is an approved seller/servicer of
conventional residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The Servicer
is in good standing to service mortgage loans for either Xxxxxx Mae or Xxxxxxx
Mac. The Servicer is a member in good standing of the MERS system;
(h) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading; and
(i) 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 Seller.
(j) Additional Representations and Warranties of the Servicer. Except as
disclosed in writing to the Seller, the Master Servicer, the Depositor and the
Trustee prior to the Closing Date: (i) the Servicer is not aware and has not
received notice that any default, early amortization or other performance
triggering event has occurred as to any other securitization due to any act or
failure to act of the Servicer; (ii) the Servicer has not been terminated as
servicer in a residential mortgage loan securitization, either due to a
servicing default or to application of a servicing performance test or trigger;
(iii) no material noncompliance with the applicable servicing criteria with
respect to other securitizations of residential mortgage loans
-36-
involving the Servicer as servicer has been disclosed or reported by the
Servicer; (iv) no material changes to the Servicer's policies or procedures with
respect to the servicing function it will perform under this Agreement for
mortgage loans of a type similar to the Mortgage Loans have occurred during the
three-year period immediately preceding the Closing Date; (v) there are no
aspects of the Servicer's financial condition that could have a material adverse
effect on the performance by the Servicer of its servicing obligations under
this Agreement and (vi) there are no affiliations, relationships or transactions
relating to the Servicer or any Subservicer with any party listed on Exhibit I
hereto.
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 the Closing Date or Servicing Transfer
Date, as applicable, hereunder and the delivery of the Servicing Files to the
Servicer and shall inure to the benefit of the Seller, the Master Servicer, the
Depositor and the Trustee. Upon discovery by either the Servicer, the Master
Servicer or the Seller 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 Seller or the Trustee, the party discovering such breach shall give
prompt written notice to the other.
Within 60 days (or, in the case of any breach of a representation or
warranty set forth in Section 6.01(j), 5 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 Trustee's or the Master Servicer's option, assign the
Servicer's rights and obligations under this Agreement (or respecting the
affected Mortgage Loans) to a successor Servicer. Such assignment shall be made
in accordance with Sections 9.01 and 9.02.
In addition, the Servicer shall indemnify the Seller, the Trustee and the
Master Servicer (and each of their respective directors, officers, employees and
agents) and the Trust Fund, and hold each of them 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 Seller, the
Master Servicer and the Trustee 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
Seller or the Master Servicer to the Servicer, (ii)
-37-
failure by the Servicer to cure such breach within the applicable cure period,
and (iii) demand upon the Servicer by the Seller or the Master Servicer for
compliance with this Agreement.
Section 6.03 Additional Indemnification by the Servicer; Third Party
Claims.
(a) The Servicer shall indemnify the Seller, the Depositor, the Trustee,
the Master Servicer, the Trust Fund and each of their respective directors,
officers, employees and agents and the Trust Fund and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that any of them may sustain arising out of or based upon:
(i) any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification, accountants'
letter or other material when and as required under this Agreement, including
any report under Sections 5.02, 5.03 or 5.04 or any failure by the Servicer to
identify pursuant to Section 7.04(c) any Subcontractor that is a Participating
Entity;
(ii) the failure of the Servicer to perform its duties and service
the Mortgage Loans in material compliance with the terms of this Agreement or
(iii) the failure of the Servicer to cause any event to occur or not
to occur which would have occurred or would not have occurred, as applicable, if
the Servicer were applying Accepted Servicing Practices under this Agreement.
In the case of any failure of performance described in clause (a)(i) of
this Section 6.03, the Servicer shall promptly reimburse the Trustee, the Master
Servicer or the Depositor, as applicable, and each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to the transaction relating to this Agreement, or for
execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with
respect to this transaction, for all costs reasonably incurred by each such
party in order to obtain the information, report, certification, accountants'
letter or other material not delivered as required by the Servicer, any
Subservicer or any Subcontractor.
The Servicer shall immediately notify the Seller, the Master Servicer, the
Depositor, the Trustee and the Trust Fund or any other relevant party if a claim
is made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the prior written consent of the indemnified party in the event of
an indemnified claim) 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 any other
party in respect of such claim and follow any written instructions received from
such indemnifed party in connection with such claim. Subject 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, the Trust Fund shall indemnify the Servicer and hold the
Servicer harmless against any and all Costs that the Servicer may sustain in
connection with any legal action relating to this Agreement, the Certificates or
the origination or Servicing of the Mortgage Loans by any prior owner or
servicer, other than any Costs incurred by reason of the Servicer's
-38-
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of its reckless disregard of obligations and duties
hereunder.
Section 6.04 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.
In the event that any REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Servicer of its duties and obligations set forth
herein, the Servicer shall indemnify the Holder of the related Residual
Certificate, the Master Servicer, the Trustee (and each of their respective
directors, officers, employees and agents) and the Trust Fund against any and
all losses, claims, damages, liabilities or expenses ("Losses") resulting from
such negligence; provided, however, that the Servicer shall not be liable for
any such Losses attributable to the action or inaction of the Trustee, the
Depositor or the Holder of such Residual Certificate, as applicable, nor for any
such Losses resulting from misinformation provided by the Holder of such
Residual Certificate on which the Servicer has relied. The foregoing shall not
be deemed to limit or restrict the rights and remedies of the Holder of such
Residual Certificate, the Trustee and the Trust Fund now or hereafter existing
at law or in equity or otherwise. Notwithstanding the foregoing, however, in no
event shall the Servicer have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).
Section 6.05 Reporting Requirements of the Commission and Indemnification.
Notwithstanding any other provision of this Agreement, the Servicer
acknowledges and agrees that the purpose of Sections 4.02(c) and (d), 5.02,
5.03, 5.04, 6.01(j), 6.03 and 7.04 of this Agreement is to facilitate compliance
by the Trustee, the Securities Administrator, the Master Servicer and the
Depositor with the provisions of Regulation AB. Therefore, the Servicer agrees
that (a) the obligations of the Servicer hereunder shall be interpreted in such
a manner as to accomplish that purpose, (b) such obligations may change over
time due to interpretive advice or guidance of the Commission, convention or
consensus among active participants in the asset-backed securities markets,
advice of counsel, or otherwise in respect of the requirements of Regulation AB,
(c) the Servicer shall agree to enter into such amendments to this Agreement as
may be necessary, in the judgment of the Depositor, the Master Servicer and
their respective counsel, to comply with such interpretive advice or guidance,
convention, consensus, advice of counsel, or otherwise, (d) the Servicer shall
otherwise comply with requests made by the Trustee, the Securities
Administrator, the Master Servicer or the Depositor for delivery of additional
or different information as such parties may determine in good faith is
necessary to comply with the provisions of Regulation AB and (e) the Servicer
shall (i) agree to such modifications and enter into such amendments to this
Agreement as may be necessary, in the judgment of the Depositor, the Master
Servicer and their respective counsel, to comply with any such clarification,
interpretive guidance, convention or consensus and (ii) promptly upon request
provide to the Depositor for inclusion in any periodic report required to be
filed under the Exchange Act, such items of information regarding this Agreement
and matters related to the Servicer, (collectively,
-39-
the "Servicer Information"), provided that such information shall be required to
be provided by the Servicer only to the extent that such shall be determined by
the Depositor in its sole discretion and its counsel to be necessary or
advisable to comply with any Commission and industry guidance and convention.
Notwithstanding the foregoing paragraph, any modifications or amendments
of the obligations of the Servicer under this agreement made pursuant to this
Section 6.05 shall be made in writing and upon mutual agreement with the
Servicer (provided that such agreement may not be unreasonably withheld).
The Servicer hereby agrees to indemnify and hold harmless the Depositor,
the Trustee, the Master Servicer, their respective officers and directors and
each person, if any, who controls the Depositor or Master Servicer within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "Act"), or
Section 20 of the Exchange Act, from and against any and all losses, claims,
expenses, damages or liabilities to which the Depositor, the Trustee, the Master
Servicer, their respective officers or directors and any such controlling person
may become subject under the Act or otherwise, as and when such losses, claims,
expenses, damages or liabilities are incurred, insofar as such losses, claims,
expenses, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Servicer Information or arise out of, or are based upon,
the omission or alleged omission to state therein any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse the
Depositor, the Trustee, the Master Servicer, their respective officers and
directors and any such controlling person for any legal or other expenses
reasonably incurred by it or any of them in connection with investigating or
defending any such loss, claim, expense, damage, liability or action, as and
when incurred; provided, however, that the Servicer shall be liable only insofar
as such untrue statement or alleged untrue statement or omission or alleged
omission relates solely to the information in the Servicer Information furnished
to the Depositor, the Trustee or Master Servicer by or on behalf of the Servicer
specifically in connection with this Agreement.
ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation or a limited liability company, 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 or limited liability company 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,
-40-
provided, however, that the successor or surviving Person shall be an
institution (i) having a net worth of not less than $25,000,000, and (ii) which
is a Xxxxxx Mae or Xxxxxxx Mac approved servicer in good standing.
Section 7.02 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 Seller, the Master
Servicer or the Trustee 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 Master Servicer, 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 Trust Fund for the reasonable legal expenses and costs of
such action.
Section 7.03 Limitation on Resignation and Assignment by the Servicer.
The Seller has entered into this Agreement with the Servicer 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 neither assign its rights under this Agreement or
the servicing hereunder nor delegate its duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets without, in each case, the prior written consent of the
Seller and the Master Servicer, which consent, in the case of an assignment of
rights or delegation of duties, shall be granted or withheld in the discretion
of the Seller and the Master Servicer, and which consent, in the case of a sale
or disposition of all or substantially all of the property or assets of the
Servicer, shall not be unreasonably withheld; provided, that in each case, there
must be delivered to the Master Servicer and the Trustee a letter from each
Rating Agency to the effect that such transfer of servicing or sale or
disposition of assets will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Certificates. Notwithstanding
the foregoing, the Servicer, without the consent of the Seller, the Master
Servicer or the Trustee, may retain third party contractors to perform certain
servicing and loan administration functions, including without limitation,
hazard insurance administration, tax payment and administration, flood
certification and administration, collection services and similar functions;
provided, that the retention of such contractors by Servicer shall not limit the
obligation of the Servicer to service the Mortgage Loans pursuant to the terms
and conditions of this Agreement.
-41-
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Master Servicer
or upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by 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 Master Servicer and the
Trustee which Opinion of Counsel shall be in form and substance acceptable to
the Master Servicer and the Trustee. 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 9.01.
Without in any way limiting the generality of this Section 7.03, 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 Seller and the Master
Servicer, then the Seller or the Master Servicer shall have the right to
terminate this Agreement upon notice given as set forth in Section 8.01, without
any payment of any penalty or damages and without any liability whatsoever to
the Servicer or any third party.
Section 7.04 Subservicing Agreements and Successor Subservicer.
(a) The Servicer shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Servicer as servicer under
this Agreement unless the Servicer complies with the provisions of paragraph (b)
of this Section 7.04 and the proposed Subservicer (i) is an institution which is
an approved Xxxxxx Xxx or Xxxxxxx Mac Seller/Servicer as indicated in writing
and (ii) represents and warrants that it is in compliance with the laws of each
state as necessary to enable it to perform its obligations under such
subservicing agreement. The Servicer shall not hire or otherwise utilize the
services of any Subcontractor, and shall not permit any Subservicer to hire or
otherwise utilize the services of any Subcontractor, to fulfill any of the
obligations of the Servicer as servicer under this Agreement unless the Servicer
complies with the provisions of paragraph (c) of this Section 7.04.
(b) The Servicer shall give prior written notice to the Trustee, the
Master Servicer, the Securities Administrator and the Depositor of the
appointment of any Subservicer and shall furnish to the Trustee, Master
Servicer, the Securities Administrator and the Depositor a copy of any related
subservicing agreement. For purposes of this Agreement, the Servicer shall be
deemed to have received payments on Mortgage Loans immediately upon receipt by
any Subservicer of such payments. Each subservicing agreement shall provide that
a successor Servicer shall have the option to terminate such agreement without
payment of any fees if the predecessor Servicer is terminated or resigns. The
Servicer shall cause any Subservicer used by the Servicer (or by any
Subservicer) to comply with the provisions of this Section 7.04 and with
Sections 4.02(c), 5.02, 5.03(a), 5.03(b), 5.04, 6.01(j) and 6.03 of this
Agreement to the same extent as if such Subservicer were the Servicer (and shall
amend, with the consent of the parties hereto, Exhibit H to reflect such
Subservicer's assessment and attestation of compliance with the Servicing
Criteria). The Servicer shall be responsible for obtaining from each Subservicer
and delivering to the Trustee, the Master Servicer, the Securities Administrator
and the Depositor any servicer compliance statement required to be delivered by
such Subservicer under Section 5.03(a), any reports on assessment of compliance
and attestation required to be delivered by such
-42-
Subservicer under Sections 5.02 and 5.04 and any certification required to be
delivered under 5.03(b) to the Person that will be responsible for signing the
Sarbanes Certification under Section 5.04 as and when required to be delivered
hereunder.
(c) The Servicer shall give prior written notice to the Master Servicer
and the Depositor of the appointment of any Subcontractor and a written
description (in form and substance satisfactory to the Master Servicer, the
Servicer and the Depositor) of the role and function of each Subcontractor
utilized by the Servicer or any Subservicer, specifying (A) the identity of each
such Subcontractor, (B) which (if any) of such Subcontractors are Participating
Entities, and (C) which elements of the servicing criteria set forth under Item
1122(d) of Regulation AB will be addressed in assessments of compliance provided
by each Subcontractor identified pursuant to clause (B) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be a
Participating Entity, the Servicer shall cause any such Subcontractor used by
the Servicer (or by any Subservicer) for the benefit of the Trustee, the
Securities Administrator, the Master Servicer and the Depositor to comply with
the provisions of Sections 4.02(c), 5.02, 5.04, 6.01(j) and 6.03 of this
Agreement to the same extent as if such Subcontractor were the Servicer (and
shall amend, with the consent of the parties hereto, Exhibit H to reflect such
Subcontractor's assessment and attestation of compliance with the Servicing
Criteria). The Servicer shall be responsible for obtaining from each
Subcontractor and delivering to the Trustee, the Securities Administrator, the
Master Servicer and the Depositor any assessment of compliance and attestation
required to be delivered by such Subcontractor under Sections 5.02 and 5.04, in
each case as and when required to be delivered.
The Servicer acknowledges that a Subservicer or Subcontractor that
performs services with respect to mortgage loans involved in this transaction in
addition to the Mortgage Loans may be determined by the Depositor to be a
Participating Entity on the basis of the aggregate balance of such mortgage
loans, without regard to whether such Subservicer or Subcontractor would be a
Participating Entity with respect to the Mortgage Loans viewed in isolation. The
Servicer shall (A) respond as promptly as practicable to any good faith request
by the Trustee, the Master Servicer or the Depositor for information regarding
each Subservicer and each Subcontractor and (B) cause each Subservicer and each
Subcontractor with respect to which the Trustee, the Master Servicer or the
Depositor requests delivery of an assessment of compliance and accountants'
attestation to deliver such within the time required under Section 5.04.
Notwithstanding any subservicing agreement or the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Subservicer, Subcontractor or other third party or reference to actions taken
through a Subservicer, a Subcontractor, another third party or otherwise, the
Servicer shall remain obligated and primarily liable to the Trust Fund, the
Trustee, the Securities Administrator, the Master Servicer and the
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions hereof without diminution of such obligation or
liability by virtue of any subservicing, subcontracting or other agreements or
arrangements or by virtue of indemnification from a Subservicer, Subcontractor
or a third party and to the same extent and under the same terms and
-43-
conditions as if the Servicer alone were servicing the Mortgage Loans, including
with respect to compliance with Item 1122 of Regulation AB. The Servicer shall
be entitled to enter into any agreement with a Subservicer, Subcontractor or a
third party for indemnification of the Servicer by such Subservicer,
Subcontractor or third party and nothing contained in the Agreement shall be
deemed to limit or modify such indemnification.
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause.
This Agreement shall be terminable at the option of the Seller or the
Master Servicer 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 Master Servicer 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 Master Servicer; or (ii) any failure by the Servicer to
duly perform, within the required time period and without notice, its
obligations to provide any certifications required pursuant to Sections 5.02,
5.03 or 5.04 (including with respect to such certifications required to be
provided by any Subservicer or Subcontractor pursuant to Section 7.04), which
failure continues unremedied for a period of ten (10) days from the date of
delivery required with respect to such certification; or
(iii) except with respect to those items listed in clause (ii)
above, any failure by the Servicer to duly perform, within the required time
period, without notice or grace period, its obligations to provide the
information, data and materials required to be provided hereunder pursuant to
Sections 4.02(c), 4.02(d), 6.01(j) and 7.04 including any items required to be
included in any Exchange Act report; or
(iv) 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
(v) failure by the Servicer to maintain its license to do business
or service residential mortgage loans in any jurisdiction, if required by such
jurisdiction, where the Mortgaged Properties are located; or
(vi) 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
-44-
(vii) 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
(viii) 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
(ix) the Servicer ceases to meet the qualifications of a Xxxxxx Xxx
or Xxxxxxx Mac seller/servicer; or
(x) the Servicer attempts to assign the servicing of the Mortgage
Loans or its right to servicing compensation hereunder or the Servicer attempts
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 (to other than a
third party in the case of outsourcing routine tasks including, but not limited
to, taxes, insurance, property inspection, reconveyance, collection or brokering
REO Property), in each case without complying fully with the provisions of
Section 7.03.
In each and every such case, so long as an event of default shall not have
been remedied, in addition to whatever rights the Seller or the Master Servicer
may have at law or equity to damages, including injunctive relief and specific
performance, the Seller or the Master Servicer, 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 Seller and the Master Servicer. Upon written request from the
Seller, the Servicer shall prepare, execute and deliver to the successor entity
designated by the Seller any and all documents and other instruments, place in
such successor's possession all Servicing Files relating to the Seller's
Mortgage Loans, and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, 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 Seller and the Master Servicer 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 Seller and the Master Servicer 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
-45-
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
Upon a termination for cause pursuant to Section 8.01, all unreimbursed
Servicing Fees, Servicing Advances and Monthly Advances still owing the Servicer
shall be paid by the Trust Fund as such amounts are received from the related
Mortgage Loans.
Section 8.02 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
Master Servicer (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, (ii) mutual consent of the
Servicer, the Seller and the Master Servicer in writing or (iii) at the sole
discretion of the Seller (acting in its capacity as owner of the servicing
rights relating to the Mortgage Loans). Any such termination pursuant to clause
(iii) above shall be with 30 days' prior notice, in writing and delivered to the
Trustee, the Master Servicer and the Servicer by registered mail to the
addresses set forth in Section 9.03 of this Agreement (in the case of the
Servicer) or in the Trust Agreement (in the case of the Trustee or the Master
Servicer). The Servicer shall comply with the termination procedures set forth
in Sections 7.03, 8.01 and 9.01 hereof. The Master Servicer or the Trustee shall
have no right to terminate the Servicer pursuant to this Section 8.02. In
connection with a termination by the Seller pursuant to clause (iii) of this
Section 8.02, the Servicer shall be reimbursed for all unreimbursed
out-of-pocket Servicing Advances, Monthly Advances and Servicing Fees and other
reasonable and necessary out-of-pocket costs associated with any transfer of
servicing at the time of such transfer of servicing. Any invoices received by
the Servicer after termination will be forwarded to the Seller or the successor
servicer for payment within thirty (30) days of receipt from the Servicer.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer.
Simultaneously with the termination of the Servicer's responsibilities and
duties under this Agreement (a) pursuant to Sections 6.02, 7.03, 8.01 or
8.02(ii), the Master Servicer 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 7.01 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; or (b) pursuant
to a termination under Section 8.02(iii), the Seller shall appoint a successor
having the characteristics set forth in clauses (i) and (ii) of Section 7.01 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 (with respect to those related Mortgage Loans). Any successor to
the Servicer shall be subject to the approval of the Master Servicer and, to the
extent required by the Trust
-46-
Agreement, the Trustee, shall be a member in good standing of the MERS system
(if any of the Mortgage Loans are MERS Eligible Mortgage Loans, unless such
Mortgage Loans are withdrawn from MERS and Assignments of Mortgage are recorded
in favor of the Trustee at the expense of the successor Servicer). Any approval
of a successor servicer by the Master Servicer and, to the extent required by
the Trust Agreement, the Trustee, shall, if the successor servicer is not at
that time a servicer of other Mortgage Loans for the Trust Fund, be conditioned
upon the receipt by the Master Servicer and the Trustee of a letter from each
Rating Agency to the effect that such transfer of servicing will not result in a
qualification, withdrawal or downgrade of the then-current rating of any of the
Certificates. In connection with such appointment and assumption, the Master
Servicer or the Seller, as applicable, 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. 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 9.01 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 Master Servicer
and the Seller under Section 6.02, 6.03 and 6.04, it being understood and agreed
that the provisions of such Sections 6.01, 6.02, 6.03 and 6.04 shall be
applicable to the Servicer notwithstanding any such resignation or termination
of the Servicer, or the termination of this Agreement. Neither the Master
Servicer, in its capacity as successor servicer, nor any other successor
servicer, shall be responsible for the lack of information and/or documents that
are not transferred to it by the Servicer and that it cannot otherwise obtain
through reasonable efforts.
Within a reasonable period of time, but in no event longer than 30 days of
the appointment of a successor entity, 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. The Servicer shall cooperate with the
Trustee, the Master Servicer or the Seller, as applicable, 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. Notwithstanding anything to the contrary set
forth herein, the Servicer shall not be prohibited from retaining copies of
Mortgage Loan documents, Servicing Files and other records related to the
Mortgage Loans as the Servicer reasonably deems necessary.
-47-
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Trustee, the Servicer, the Master Servicer and the Seller an
instrument (i) accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 6.01 (including a
representation that the successor Servicer is a member of MERS, unless none of
the Mortgage Loans are MERS Mortgage Loans or MERS Eligible Mortgage Loans or
any such Mortgage Loans have been withdrawn from MERS and Assignments of
Mortgage are recorded in favor of the Trustee) and provide for the same remedies
set forth in Sections 6.02, 6.03 and 6.04 herein and (ii) an assumption of the
due and punctual performance and observance of each covenant and condition to be
performed and observed by the Servicer under this Agreement, 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, 7.03, 8.01 or 8.02 shall not affect any claims that the Master
Servicer or the Trustee may have against the Servicer arising out of the
Servicer's actions or failure to act prior to any such termination or
resignation. In addition, in the event any successor servicer is appointed
pursuant to Section 8.02(iii) of this Agreement, such successor servicer must
satisfy the conditions relating to the transfer of servicing set forth in the
Trust Agreement.
The Servicer shall deliver promptly to the successor servicer the funds in
the Custodial Account and Escrow Account and all 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 the Trustee, the Seller and Master Servicer of such appointment in
accordance with the procedures set forth in Section 9.03.
Section 9.02 Costs.
The Seller shall pay 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 Seller. Subject to Sections 2.02 and 3.01(a), the Depositor shall pay the
costs associated with the preparation, delivery and recording of Assignments of
Mortgages.
Section 9.03 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):
-48-
(i) if to the Seller:
Xxxxxx Brothers Holdings Inc.
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Contract Finance - SASCO 2006-3H
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Dechert, LLP
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(ii) if to the Servicer:
Aurora Loan Services LLC
00000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Manager, Contract Administration
SASCO 2006-3H
Telephone No. 000-000-0000
Telecopier No. 000-000-0000
with a copy to:
Aurora Loan Services LLC
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Manager, Loan Administration
SASCO 2006-3H
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(iii) if to the Master Servicer:
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Mail Stop Code - 3195
Attn: Xxxxxx X. Xxxxxx - Master Servicing
SASCO 2006-3H
Telephone: (000) 000-0000
-49-
(iv) if to the Trust Fund or the Trustee:
Citibank, N.A.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Citibank Agency and Trust (SASCO 2006-3H)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(v) if to the Depositor:
Structured Asset Securities Corporation
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Mortgage Finance SASCO 2006-3H
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. Notwithstanding anything to the contrary in this Agreement, the
Servicer shall not be obligated to provide notices pursuant to this Agreement to
any party whose address is not provided in this Section 9.03 until 30 days after
the Servicer has received notice of the appointment of such party (including the
name, address, telephone number and facsimile number of such party).
Section 9.04 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.
Section 9.05 No Personal Solicitation.
From and after the Closing 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
-50-
this limitation shall not prohibit the Servicer from soliciting such Mortgagor
for purposes of prepayment, refinance or modification of any loan owned or
serviced by the Servicer other than a Mortgage Loan. Notwithstanding the
foregoing, it is understood and agreed that, among other marketing activities,
promotions and solicitations (including, without limitation, those for purposes
of prepayment, refinance or modification) undertaken by the Servicer which are
directed to the general public at large or which are directed generally to a
segment of the then existing customers of the Servicer or any of its affiliates
(including, without limitation, the mailing of promotional materials to the
Servicer's or its affiliates' deposit customers by inserting such materials into
customer account statements, billing statements, coupon books, mass mailings
based on commercially acquired mailing lists and newspaper, radio and television
advertisements, solicitations included on the Servicer's website and voice
response system and solicitations made on the basis of information acquired by
the Servicer or its affiliates that indicates that a borrower may be planning to
refinance) 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 9.05, the Servicer hereby agrees to pay
to the Trust Fund an amount equal to the difference, if any, between the amount
that the Trust Fund would have received if it had sold the Mortgage Loan to a
third party, and the proceeds received by the Trust Fund as a result of such
refinancing.
Section 9.06 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 9.07 Place of Delivery and Governing Law.
This Agreement shall be deemed in effect when a fully executed counterpart
thereof is received by the Seller in the State of New York and shall be deemed
to have been made in the State of New York. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.08 Further Agreements.
The Seller 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.
Section 9.09 Intention of the Parties.
It is the intention of the parties that the Seller is conveying, and the
Servicer is receiving only a contract for servicing the Mortgage Loans.
Accordingly, the parties hereby acknowledge that the Trust Fund remains the sole
and absolute owner of the Mortgage Loans and all rights (other than the
servicing rights) related thereto.
-51-
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable
by the Servicer, each Seller, the Trustee and the Master Servicer and their
respective successors and assigns. This Agreement shall not be assigned, pledged
or hypothecated by the Servicer to a third party except in accordance with
Section 7.03.
Section 9.11 Assignment by the Seller.
The Seller shall have the right, upon notice to but without the consent of
the Servicer, to assign, in whole or in part, its interest under this Agreement
to the Depositor, which in turn shall assign such rights to the Trustee, and the
Trustee then shall succeed to all rights (but not the obligations, except as set
forth in the Trust Agreement) of the Seller under this Agreement (and in
performing hereunder, the Trustee shall have all of the rights, protections and
immunities afforded to it under the Trust Agreement). All references to the
Seller in this Agreement shall be deemed to include its assignee or designee and
any subsequent assignee or designee, specifically including the Trustee, except
with respect to the Seller's retained servicing rights pursuant to Section
8.02(iii).
The Seller shall have the right, upon notice to but without the consent of
the Servicer, to assign, in whole or in part, its retained servicing rights. All
references to the Seller in this Agreement, in its capacity as an owner of
servicing rights, shall be deemed to include the assignee or designee and any
subsequent assignee or designee, of the Seller's rights arising pursuant to
Section 8.02(iii).
Section 9.12 Amendment
This Agreement may be amended from time to time by the mutual written
agreement signed by the Master Servicer, the Seller and the Servicer; provided
that the party requesting such amendment shall, at its own expense, provide the
Trustee, the Master Servicer and the Seller with an Opinion of Counsel that such
amendment will not materially adversely affect the interest of the
Certificateholders in the Mortgage Loans. Any such amendment shall be deemed not
to adversely affect in any material respect any the interest of the
Certificateholders in the Mortgage Loans, if the Trustee receives written
confirmation from each Rating Agency that such amendment will not cause such
Rating Agency to reduce, qualify or withdraw the then current rating assigned to
the Certificates (and any Opinion of Counsel requested by the Trustee, the
Master Servicer and the Seller in connection with any such amendment may rely
expressly on such confirmation as the basis therefor).
Section 9.13 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.
-52-
Section 9.14 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 9.15 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) 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 9.16 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
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 9.17 Protection of Confidential Information.
The Servicer shall keep confidential and shall not divulge to any party,
without the Seller's prior written consent, any nonpublic 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
-53-
working with legal counsel, auditors, taxing authorities or other governmental
agencies or it is otherwise in accordance with Accepted Servicing Practices.
-54-
IN WITNESS WHEREOF, the Servicer, the Seller and the Master Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the date first above written.
XXXXXX BROTHERS HOLDINGS INC.,
as Seller
By: /S/
--------------------------------------
Name:
Title: Authorized Signatory
AURORA LOAN SERVICES LLC,
as Servicer
By: /S/
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
AURORA LOAN SERVICES LLC,
as Master Servicer
By: /S/
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Acknowledged By:
CITIBANK, N.A.
as Trustee
By: /S/
----------------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Intentionally omitted]
A-1
EXHIBIT B
CUSTODIAL ACCOUNT CERTIFICATION NOTICE
March __, 2006
To:
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Mail Stop Code - 3195
Attn: Xxxxxx X. Xxxxxx - Master Servicing
(SASCO 2006-3H)
As Servicer under the Servicing Agreement, dated as of March 1, 2006 among
Aurora Loan Services LLC, as Servicer, Xxxxxx Brothers Holdings Inc., as Seller
and you, as Master Servicer (the "Agreement"), we hereby certify to you that we
have established an account at [insert name of financial institution], as a
Custodial Account pursuant to Section 3.03 of the Agreement, to be designated as
"Aurora Loan Services LLC, in trust for Citibank, N.A., as Trustee for
Structured Asset Securities Corporation, 2006-3H." All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Servicer.
AURORA LOAN SERVICES LLC
By:
-----------------------------
Name:
Title:
B-1
EXHIBIT C
ESCROW ACCOUNT CERTIFICATION NOTICE
March __, 2006
To:
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Mail Stop Code - 3195
Attn: Xxxxxx X. Xxxxxx - Master Servicing
(SASCO 2006-3H)
As Servicer under the Servicing Agreement, dated as of March 1, 2006 among
Aurora Loan Services LLC, as Servicer, Xxxxxx Brothers Holdings Inc., as Seller
and you, as Master Servicer (the "Agreement"), we hereby certify to you that we
have established an account at [insert name of financial institution], as an
Escrow Account pursuant to Section 3.05 of the Agreement, to be designated as
"Aurora Loan Services LLC, in trust for Citibank, N.A., as Trustee for
Structured Asset Securities Corporation, 2006-3H." All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Servicer.
AURORA LOAN SERVICES LLC
By:
-----------------------------
Name:
Title:
X-0
XXXXXXX X-0
FORM OF MONTHLY REMITTANCE ADVICE
FIELD NAME DESCRIPTION FORMAT
---------- ----------- ------
INVNUM INVESTOR LOAN NUMBER Number no decimals
SERVNUM SERVICER LOAN NUMBER, REQUIRED Number no decimals
BEGSCHEDBAL BEGINNING SCHEDULED BALANCE FOR SCHED/SCHED Number two decimals
BEGINNING TRAIL BALANCE FOR ACTUAL/ACTUAL,
REQUIRED
SCHEDPRIN SCHEDULED PRINCIPAL AMOUNT FOR SCHEDULED/SCHEDULED Number two decimals
ACTUAL PRINCIPAL COLLECTED FOR ACTUAL/ACTUAL,
REQUIRED, .00 IF NO COLLECTIONS
CURT1 CURTAILMENT 1 XXXXXX, .00 IF NOT APPLICABLE Number two decimals
CURT1DATE CURTAILMENT 1 DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
CURT1ADJ CURTAILMENT 1 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
CURT2 CURTAILMENT 2 XXXXXX, .00 IF NOT APPLICABLE Number two decimals
CURT2DATE CURTAILMENT 2 DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
CURT2ADJ CURTAILMENT 2 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
LIQPRIN PAYOFF, LIQUIDATION PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
OTHPRIN OTHER PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
PRINREMIT TOTAL PRINCIPAL REMITTANCE AMOUNT, Number two decimals
.00 IF NOT APPLICABLE
INTREMIT NET INTEREST REMIT, INCLUDE PAYOFF INTEREST, Number two decimals
.00 IF NOT APPLICABLE
TOTREMIT TOTAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
ENDSCHEDBAL ENDING SCHEDULED BALANCE FOR SCHEDULED/SCHEDULED Number two decimals
ENDING TRIAL BALANCE FOR ACTUAL/ACTUAL
.00 IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
ENDACTBAL ENDING TRIAL BALANCE .00 IF PAIDOFF, LIQUIDATED OR Number two decimals
FULL CHARGEOFF
ENDDUEDATE ENDING ACTUAL DUE DATE, NOT LAST PAID INSTALLMENT DD-MMM-YY
ACTCODE 60 IF PAIDOFF, BLANK IF NOT APPLICABLE Number no decimals
ACTDATE ACTUAL PAYOFF DATE, BLANK IF NOT APPLICABLE DD-MMM-YY
INTRATE INTEREST RATE, REQUIRED Number seven decimals
Example .0700000 for 7.00%
SFRATE SERVICE FEE RATE, REQUIRED Number seven decimals
Example .0025000 for .25%
PTRATE PASS THRU RATE, REQUIRED Number seven decimals
Example .0675000 for 6.75%
PIPMT P&I CONSTANT, REQUIRED Number two decimals
.00 IF PAIDOFF
X-0
XXXXX 0000-0X
Xxxxxx Servicing Agreement
D-9
EXHIBIT D-2
STANDARD LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
------------------------------------------------------------------------------------------------------------------------------------
Data Field Format Data Description
------------------------------------------------------------------------------------------------------------------------------------
% of MI coverage NUMBER(6,5) The percent of coverage provided by
the PMI company in the event of loss
on a defaulted loan.
------------------------------------------------------------------------------------------------------------------------------------
Actual MI claim DATE(MM/DD/YYYY) Actual date that the claim was submitted
filed date to the PMI company.
------------------------------------------------------------------------------------------------------------------------------------
Actual bankruptcy DATE(MM/DD/YYYY) Actual date that the bankruptcy
start date petition is filed with the court.
------------------------------------------------------------------------------------------------------------------------------------
Actual MI claim NUMBER(15,2) The amount of the claim that was filed
amount filed by the servicer with the PMI company.
------------------------------------------------------------------------------------------------------------------------------------
Actual discharge date DATE(MM/DD/YYYY) Actual date that the Discharge Order
is entered in the bankruptcy docket.
------------------------------------------------------------------------------------------------------------------------------------
Actual due date DATE(MM/DD/YYYY) Actual due date of the next
outstanding payment amount due from
the mortgagor.
------------------------------------------------------------------------------------------------------------------------------------
Actual eviction DATE(MM/DD/YYYY) Actual date that the eviction
complete date proceedings are completed by local
counsel.
------------------------------------------------------------------------------------------------------------------------------------
Actual eviction DATE(MM/DD/YYYY) Actual date that the eviction
start date proceedings are commenced by local
counsel.
------------------------------------------------------------------------------------------------------------------------------------
Actual first DATE(MM/DD/YYYY) Actual date that foreclosure counsel
legal date filed the first legal action as
defined by state statute.
------------------------------------------------------------------------------------------------------------------------------------
Actual redemption DATE(MM/DD/YYYY) Actual date that the foreclosure
end date redemption period expires.
------------------------------------------------------------------------------------------------------------------------------------
Bankruptcy chapter VARCHAR2(2) 7= Chapter 7 filed 11= Chapter 11 filed Chapter of bankruptcy filed.
12= Chapter 12 filed 13= Chapter 13 filed
------------------------------------------------------------------------------------------------------------------------------------
Bankruptcy flag VARCHAR2(2) Y=Active Bankruptcy N=No Active Bankruptcy Servicer defined indicator that
identifies that the property is an
asset in an active bankruptcy case.
------------------------------------------------------------------------------------------------------------------------------------
Bankruptcy Case Number VARCHAR2(15) The court assigned case number of the
bankruptcy filed by a party with
interest in the property.
------------------------------------------------------------------------------------------------------------------------------------
MI claim amount paid NUMBER(15,2) The amount paid to the servicer by the
PMI company as a result of submitting
an MI claim.
------------------------------------------------------------------------------------------------------------------------------------
D-2
------------------------------------------------------------------------------------------------------------------------------------
MI claim funds DATE(MM/DD/YYYY) Actual date that funds were received
received date from the PMI company as a result of
transmitting an MI claim.
------------------------------------------------------------------------------------------------------------------------------------
Current loan amount NUMBER(10,2) Current unpaid principal balance of
the loan as of the date of reporting
to Aurora Master Servicing.
------------------------------------------------------------------------------------------------------------------------------------
Date FC sale scheduled DATE(MM/DD/YYYY) Date that the foreclosure sale is
scheduled to be held.
------------------------------------------------------------------------------------------------------------------------------------
Date relief/dismissal DATE(MM/DD/YYYY) Actual date that the dismissal or
granted relief from stay order is entered by
the bankruptcy court.
------------------------------------------------------------------------------------------------------------------------------------
Date REO DATE(MM/DD/YYYY) Actual date of acceptance of an REO
offer accepted offer.
------------------------------------------------------------------------------------------------------------------------------------
Date REO offer DATE(MM/DD/YYYY) Actual date of receipt of an REO
received offer.
------------------------------------------------------------------------------------------------------------------------------------
Delinquency value NUMBER(10,2) Value obtained typically from a BPO
prior to foreclosure referral not
related to loss mitigation activity.
------------------------------------------------------------------------------------------------------------------------------------
Delinquency VARCHAR2(15) BPO= Broker's Appraisal=Appraisal Name of vendor or management company
value source Price Opinion that provided the delinquency
valuation amount.
------------------------------------------------------------------------------------------------------------------------------------
Delinquency value date DATE(MM/DD/YYYY) Date that the delinquency valuation
amount was completed by vendor or
property management company.
------------------------------------------------------------------------------------------------------------------------------------
Delinquency flag VARCHAR2(2) Y= 90+ delinq. Not in FC, Bky or Servicer defined indicator that
delinquent Loss mit N=Less than 90 days identifies that the loan is delinquent
but is not involved in loss
mitigation, foreclosure, bankruptcy or
REO.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure flag VARCHAR2(2) Y=Active foreclosure N=No active foreclosure Servicer defined indicator that
identifies that the loan is involved
in foreclosure proceedings.
------------------------------------------------------------------------------------------------------------------------------------
Corporate NUMBER(10,2) Total of all cumulative expenses
expense balance advanced by the servicer for
non-escrow expenses such as but not
limited to: FC fees and costs,
bankruptcy fees and costs, property
preservation and property inspections.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure attorney DATE(MM/DD/YYYY) Actual date that the loan was referred
referral date to local counsel to begin foreclosure
proceedings.
------------------------------------------------------------------------------------------------------------------------------------
D-3
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure NUMBER(15,2) Value obtained during the foreclosure
valuation amount process. Usually as a result of a BPO
and typically used to calculate the
bid.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure DATE(MM/DD/YYYY) Date that foreclosure valuation amount
valuation date was completed by vendor or property
management company.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure VARCHAR2(80) BPO= Broker's Price Appraisal=Appraisal Name of vendor or management company
valuation source Opinion that provided the foreclosure
valuation amount.
------------------------------------------------------------------------------------------------------------------------------------
FHA 27011A DATE(MM/DD/YYYY) Actual date that the FHA 27011A claim
transmitted date was submitted to HUD.
------------------------------------------------------------------------------------------------------------------------------------
FHA 27011 B DATE(MM/DD/YYYY) Actual date that the FHA 27011B claim
transmitted date was submitted to HUD.
------------------------------------------------------------------------------------------------------------------------------------
VA LGC/ FHA Case VARCHAR2(15) Number that is assigned individually
number to the loan by either HUD or VA at the
time of origination. The number is
located on the Loan Guarantee
Certificate (LGC) or the Mortgage
Insurance Certificate (MIC).
------------------------------------------------------------------------------------------------------------------------------------
FHA Part A DATE(MM/DD/YYYY) Actual date that funds were received
funds received date from HUD as a result of transmitting
the 27011A claim.
------------------------------------------------------------------------------------------------------------------------------------
Foreclosure actual DATE(MM/DD/YYYY) Actual date that the foreclosure sale
sale date was held.
------------------------------------------------------------------------------------------------------------------------------------
Servicer loan number VARCHAR2(15) Individual number that uniquely
identifies loan as defined by
servicer.
------------------------------------------------------------------------------------------------------------------------------------
Loan type VARCHAR2(2) 1=FHA Residential 2=VA Residential Type of loan being serviced generally
3=Conventional w/o PMI 4=Commercial defined by the existence of certain
5=FHA Project 6=Conventional w/PMI types of insurance. (ie: FHA, VA,
7=HUD 235/265 8=Daily Simple Interest Loan conventional insured, conventional
9=Farm Loan U=Unknown uninsured, SBA, etc.)
S=Sub prime
------------------------------------------------------------------------------------------------------------------------------------
Loss mit approval date DATE(MM/DD/YYYY) The date determined that the servicer
and mortgagor agree to pursue a
defined loss mitigation alternative.
------------------------------------------------------------------------------------------------------------------------------------
Loss mit flag VARCHAR2(2) Y= Active loss N=No active loss Servicer defined indicator that
mitigation mitigation identifies that the loan is involved
in completing a loss mitigation
alternative.
------------------------------------------------------------------------------------------------------------------------------------
Loss mit removal date DATE(MM/DD/YYYY) The date that the mortgagor is denied
loss mitigation alternatives or the
date that the loss mitigation
alternative is completed resulting in
a current or liquidated loan.
------------------------------------------------------------------------------------------------------------------------------------
D-4
------------------------------------------------------------------------------------------------------------------------------------
Loss mit type VARCHAR2(2) L= Loss Mitigation LT=Litigation pending The defined loss mitigation
NP=Pending non-performing sale CH= Charge off alternative identified on the loss mit
DI= Deed in lieu FB= Forbearance plan approval date.
MO=Modification PC=Partial claim
SH=Short sale VA=VA refunding
------------------------------------------------------------------------------------------------------------------------------------
Loss mit value NUMBER(10,2) Value obtained typically from a BPO
prior to foreclosure sale intended to
aid in the completion of loss
mitigation activity.
------------------------------------------------------------------------------------------------------------------------------------
Loss mit value date DATE(MM/DD/YYYY) Name of vendor or management company
that provided the loss mitigation
valuation amount.
------------------------------------------------------------------------------------------------------------------------------------
Loss mit value source VARCHAR2(15) BPO= Broker's Price Appraisal=Appraisal Date that the loss mitigation
Opinion valuation amount was completed by
vendor or property management company.
------------------------------------------------------------------------------------------------------------------------------------
MI certificate number VARCHAR2(15) A number that is assigned individually
to the loan by the PMI company at the
time of origination. Similar to the VA
LGC/FHA Case Number in purpose.
------------------------------------------------------------------------------------------------------------------------------------
LPMI Cost NUMBER(7,7) The current premium paid to the PMI
company for Lender Paid Mortgage
Insurance.
------------------------------------------------------------------------------------------------------------------------------------
Occupancy status VARCHAR2(1) O=Owner occupied T=Tenant occupied The most recent status of the property
U=Unknown V=Vacant regarding who if anyone is occupying
the property. Typically a result of a
routine property inspection.
------------------------------------------------------------------------------------------------------------------------------------
First Vacancy date/ DATE(MM/DD/YYYY) The date that the most recent
Occupancy status date occupancy status was determined.
Typically the date of the most recent
property inspection.
------------------------------------------------------------------------------------------------------------------------------------
Original loan amount NUMBER(10,2) Amount of the contractual obligations
(ie: note and mortgage/deed of trust).
------------------------------------------------------------------------------------------------------------------------------------
Original value amount NUMBER(10,2) Appraised value of property as of
origination typically determined
through the appraisal process.
------------------------------------------------------------------------------------------------------------------------------------
Origination date DATE(MM/DD/YYYY) Date that the contractual obligations
(ie: note and mortgage/deed of trust)
of the mortgagor was executed.
------------------------------------------------------------------------------------------------------------------------------------
FHA Part B funds DATE(MM/DD/YYYY) Actual date that funds were received
received date from HUD as a result of transmitting
the 27011B claim.
------------------------------------------------------------------------------------------------------------------------------------
D-5
------------------------------------------------------------------------------------------------------------------------------------
Post petition due date DATE(MM/DD/YYYY) The post petition due date of a loan
involved in a chapter 13 bankruptcy.
------------------------------------------------------------------------------------------------------------------------------------
Property condition VARCHAR2(2) 1= Excellent 2=Good Physical condition of the property as
3=Average 4=Fair most recently reported to the servicer
5=Poor 6=Very poor by vendor or property management
company.
------------------------------------------------------------------------------------------------------------------------------------
Property type VARCHAR2(2) 1=Single family 2=Town house Type of property secured by mortgage
3=Condo 4=Multifamily 5=Other such as: single family, 2-4 unit, etc.
6=Prefabricated B=Commercial C=Land only
7=Mobile home U=Unknown D=Farm
A=Church P=PUD R=Row house
O=Co-op M=Manufactured housing 24= 2-4 family
CT=Condotel MU=Mixed use
------------------------------------------------------------------------------------------------------------------------------------
Reason for default VARCHAR2 (3) 001=Death of 02=Illness of Cause of delinquency as identified by
principal mtgr principal mtgr mortgagor.
003=Illness of mtgr's family member
004=Death of mtgr's family member 005=Marital difficulties
006=Curtailment of income 007=Excessive obligations
008=Abandonment of property 009=Distant employee transfer
011=Property problem 012=Inability to sell property
013=Inability to rent property 014=Military service
015=Other 016=Unemployment
017=Business failure 019=Casualty loss
022=Energy-Environment costs 023= Servicing problems
026= Payment adjustment 027=Payment dispute
029=Transfer ownership pending 030=Fraud
031=Unable to contact borrower INC=Incarceration
------------------------------------------------------------------------------------------------------------------------------------
REO repaired value NUMBER(10,2) The projected value of the property
that is adjusted from the "as is"
value assuming necessary repairs have
been made to the property as
determined by the vendor/property
management company.
------------------------------------------------------------------------------------------------------------------------------------
REO list price NUMBER(15,2) The most recent listing/pricing amount
adjustment amount as updated by the servicer for REO
properties.
------------------------------------------------------------------------------------------------------------------------------------
REO list price DATE(MM/DD/YYYY) The most recent date that the servicer
adjustment date advised the agent to make an
adjustment to the REO listing price.
------------------------------------------------------------------------------------------------------------------------------------
REO value (as is) NUMBER(10,2) The value of the property without
making any repairs as determined by
the vendor/property management
company.
------------------------------------------------------------------------------------------------------------------------------------
REO actual DATE(MM/DD/YYYY) The actual date that the sale of the
closing date REO property closed escrow.
------------------------------------------------------------------------------------------------------------------------------------
D-6
------------------------------------------------------------------------------------------------------------------------------------
REO flag VARCHAR2(7) Y=Active REO N=No active REO Servicer defined indicator that
identifies that the property is now
Real Estate Owned.
------------------------------------------------------------------------------------------------------------------------------------
REO original list date DATE(MM/DD/YYYY) The initial/first date that the
property was listed with an agent as
an REO.
------------------------------------------------------------------------------------------------------------------------------------
REO original NUMBER(15,2) The initial/first price that was used
list price to list the property with an agent as
an REO.
------------------------------------------------------------------------------------------------------------------------------------
REO net sales proceeds NUMBER(10,2) The actual REO sales price less
closing costs paid. The net sales
proceeds are identified within the
HUD1 settlement statement.
------------------------------------------------------------------------------------------------------------------------------------
REO sales price NUMBER(10,2) Actual sales price agreed upon by both
the purchaser and servicer as
documented on the HUD1 settlement
statement.
------------------------------------------------------------------------------------------------------------------------------------
REO scheduled DATE(MM/DD/YYYY) The date that the sale of the REO
close date property is scheduled to close escrow.
------------------------------------------------------------------------------------------------------------------------------------
REO value date DATE(MM/DD/YYYY) Date that the vendor or management
company completed the valuation of the
property resulting in the REO value
(as is).
------------------------------------------------------------------------------------------------------------------------------------
REO value source VARCHAR2(15) BPO= Broker's Price Appraisal=Appraisal Name of vendor or management company
Opinion that provided the REO value (as is).
------------------------------------------------------------------------------------------------------------------------------------
Repay first due date DATE(MM/DD/YYYY) The due date of the first scheduled
payment due under a forbearance or
repayment plan agreed to by both the
mortgagor and servicer.
------------------------------------------------------------------------------------------------------------------------------------
Repay next due date DATE(MM/DD/YYYY) The due date of the next outstanding
payment due under a forbearance or
repayment plan agreed to by both the
mortgagor and servicer.
------------------------------------------------------------------------------------------------------------------------------------
Repay plan DATE(MM/DD/YYYY) The servicer defined date upon which
broken/reinstated/ the servicer considers that the plan
closed date is no longer in effect as a result of
plan completion or mortgagor's failure
to remit payments as scheduled.
------------------------------------------------------------------------------------------------------------------------------------
Repay plan DATE(MM/DD/YYYY) The date that both the mortgagor and
created date servicer agree to the terms of a
forbearance or repayment plan.
------------------------------------------------------------------------------------------------------------------------------------
SBO loan number NUMBER(9) Individual number that uniquely
identifies loan as defined by Aurora
Master Servicing.
------------------------------------------------------------------------------------------------------------------------------------
D-7
------------------------------------------------------------------------------------------------------------------------------------
Escrow balance/ NUMBER(10,2) The positive or negative account
advance balance balance that is dedicated to payment
of hazard insurance, property taxes,
MI, etc. (escrow items only)
------------------------------------------------------------------------------------------------------------------------------------
Title approval DATE(MM/DD/YYYY) The actual date that the title
letter received date approval was received as set forth in
the HUD title approval letter.
------------------------------------------------------------------------------------------------------------------------------------
Title package DATE(MM/DD/YYYY) The actual date that the title package
HUD/VA date was submitted to either HUD or VA.
------------------------------------------------------------------------------------------------------------------------------------
VA claim funds DATE(MM/DD/YYYY) The actual date that funds were
received date received by the servicer from the VA
for the expense claim submitted by the
servicer.
------------------------------------------------------------------------------------------------------------------------------------
VA claim DATE(MM/DD/YYYY) The actual date that the expense claim
submitted date was submitted by the servicer to the
VA.
------------------------------------------------------------------------------------------------------------------------------------
VA first funds NUMBER(15,2) The amount of funds received by the
received amount servicer from VA as a result of the
specified bid.
------------------------------------------------------------------------------------------------------------------------------------
VA first funds DATE(MM/DD/YYYY) The date that the funds from the
received date specified bid were received by the
servicer from the VA.
------------------------------------------------------------------------------------------------------------------------------------
VA XXX submitted date DATE(MM/DD/YYYY) Actual date that the Notice of
Election to Convey was submitted to
the VA.
------------------------------------------------------------------------------------------------------------------------------------
Zip Code VARCHAR2(5) US postal zip code that corresponds to
property location.
------------------------------------------------------------------------------------------------------------------------------------
FNMA Delinquency VARCHAR2(3) 09=Forbearance 17=Preforeclosure sale The code that is electronically
status code 24=Drug seizure 26=Refinance 27=Assumption reported to FNMA by the servicer that
28=Modification 29=Charge-off 30=Third-party sale reflects the current defaulted status
31=Probate 32=Military indulgence 43=Foreclosure of a loan. (ie: 65, 67, 43 or 44)
44=Deed-in-lieu 49=Assignment 61=Second lien considerations
62=VA no-bid 63=VA Refund 64=VA Buydown
65=Ch.7 bankruptcy 66=Ch. 11 bankruptcy 67=Ch. 13 bankruptcy
------------------------------------------------------------------------------------------------------------------------------------
D-8
------------------------------------------------------------------------------------------------------------------------------------
FNMA delinquency VARCHAR2(3) 001=Death of 002=Illness of The code that is electronically
reason code principal mtgr principal mtgr reported to FNMA by the servicer that
003=Illness of mtgr's family member 004=Death of mtgr's family member describes the circumstance that
005=Marital difficulties 006=Curtailment of income appears to be the primary contributing
007=Excessive obligations 008=Abandonment of property factor to the delinquency.
009=Distant employee transfer 011=Property problem
012=Inability to sell property 013=Inability to rent property
014=Military service 015=Other
016=Unemployment 017=Business failure
019=Casualty loss 022=Energy-Environment costs
023= Servicing problems 026= Payment adjustment
027=Payment dispute 029=Transfer ownership pending
030=Fraud 031=Unable to contact borrower
INC=Incarceration
------------------------------------------------------------------------------------------------------------------------------------
Suspense balance NUMBER(10,2) Money submitted to the servicer,
credited to the mortgagor's account
but not allocated to principal,
interest, escrow, etc.
------------------------------------------------------------------------------------------------------------------------------------
Restricted escrow NUMBER(10,2) Money held in escrow by the mortgage
balance company through completion of repairs
to property.
------------------------------------------------------------------------------------------------------------------------------------
Investor number NUMBER (10,2) Unique number assigned to a group of
loans in the servicing system.
------------------------------------------------------------------------------------------------------------------------------------
D-9
EXHIBIT E
FORM OF CERTIFICATION TO BE PROVIDED TO THE DEPOSITOR,
THE TRUSTEE AND THE MASTER SERVICER BY THE SERVICER
[DATE]
Structured Asset Securities Corporation
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mortgage Finance SASCO 2006-3H
[__________]
Attention: [_________]
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Mail Stop Code - 3195
Attn: Xxxxxx X. Xxxxxx - Master Servicing
(SASCO 2006-3H)
Reference is made to the Servicing Agreement dated as of March 1, 2006
(the "Agreement"), by and among Xxxxxx Brothers Holdings Inc., Aurora Loan
Services LLC (the "Servicer," in such capacity and the "Master Servicer," in
such capacity), and acknowledged by Citibank, N.A., as Trustee (the "Trustee").
I, [identify the certifying individual], a [title] of the Servicer, hereby
certify to the Trustee, the Master Servicer and Structured Asset Securities
Corporation (the "Depositor"), and their respective officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the information required to be delivered to the
Master Servicer pursuant to the Agreement (the "Servicing
Information").
2. Based on my knowledge, the Servicing Information does not contain
any material untrue information or omit to state information
necessary to make the Servicing Information, in light of the
circumstances under which such information was provided, not
misleading as of the date of this certification;
3. Based on my knowledge, the Servicing Information has been provided
to the Master Servicer when and as required under the Agreement; and
4. I am responsible for reviewing the activities performed by the
Servicer under the Agreement, and based upon my knowledge and the
review required under the Agreement, and except as disclosed in
writing to you on or prior to the date of this certification either
in the accountants' report required under the Agreement or in
E-1
disclosure a copy of which is attached hereto, the Servicer has, as
of the date of this certification, fulfilled its obligations under
this Agreement.
AURORA LOAN SERVICES LLC
By:
------------------------------------
Name:
Title:
E-2
EXHIBIT F
[Date]
FORM OF ANNUAL CERTIFICATION
Re: The Servicing Agreement dated as of March 1, 2006 (the "Agreement"),
by and among Xxxxxx Brothers Holdings Inc., Aurora Loan Services LLC
(the "Servicer," in such capacity and the "Master Servicer," in such
capacity), and acknowledged by Citibank, N.A., as Trustee (the
"Trustee").
I, [identify the certifying individual], the [title] of the Servicer,
certify to the Trustee, the Securities Administrator, the Master Servicer and
Structured Asset Securities Corporation (the "Depositor"), and their officers,
with the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the
Servicer provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing
Assessment"), the registered public accounting firm's attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
and Section 1122(b) of Regulation AB (the "Attestation Report"), and all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans by the Servicer during 200[ ] that
were delivered by the Servicer to any of the Depositor, the Master
Servicer, the Securities Administrator, and the Trustee pursuant to the
Agreement (collectively, the "Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
the light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the Depositor, the Master Servicer, the Securities
Administrator and the Trustee;
(4) I am responsible for reviewing the activities performed by the
Servicer as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement and
except as disclosed in the
F-1
Compliance Statement, the Servicing Assessment or the Attestation Report,
the Servicer has fulfilled its obligations under the Agreement in all
material respects; and
(5) The Compliance Statement required to be delivered by the
Servicer pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Servicer and by any
Subservicer or Subcontractor pursuant to the Agreement, have been provided
to the Depositor, the Master Servicer, the Securities Administrator and
the Trustee. Any material instances of noncompliance described in such
reports have been disclosed to the Depositor, the Master Servicer, the
Securities Administrator and the Trustee. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date:
------------------------------
By:
--------------------------------
Name:
Title:
F-2
EXHIBIT G
XXXXXX XXX GUIDE NO. 95-19
Reference
o Selling This announcement amends the guide(s) indicated.
o Servicing Please keep it for reference until we issue a formal
change.
Subject "Full-File" Reporting to Credit Repositories
Part IV, Section 107, of the servicing Guide currently requires servicers to
report only 90-day delinquencies to the four major credit repositories. To
ensure that the repositories have up-to-date information for both servicing and
origination activity, we have decided to begin requiring -- as of the month
ending March 31, 1996 -- servicers to provide the credit repositories a
"full-file" status report for the mortgages they service for us.
"Full-file" reporting requires that servicers submit a monthly report to each of
the credit repositories to describe the exact status for each mortgage they
service for us. The status reported generally should be the one in effect as of
the last business day of each month. Servicers may, however, use a slightly
later cut-off date -- for example, at the and of the first week of a month -- to
assure that payment corrections, returned checks, and other adjustments related
to the previous month's activity can be appropriately reflected in their report
for that month. Statuses that must be reported for any given mortgage include
the following: new origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, and charged-off. (The credit repositories will provide the
applicable codes for reporting these statuses to them.) A listing of each of the
major repositories to which "full-file" status reports must be sent is attached.
Servicers are responsible for the complete and accurate reporting of mortgage
status information to the repositories and for resolving any disputes that arise
about the information they report. Servicers must respond promptly to any
inquiries from borrowers regarding specific mortgage status information about
them that was reported to the credit repositories.
Servicers should contact their Customer Account Team in their lead Xxxxxx Xxx
regional office if they have any questions about this expanded reporting
requirement.
Xxxxxx X. Engeletad
Senior Vice President - Mortgage and Lender Standards
G-1
XXXXXX XXX GUIDE 95-19
ATTACHMENT 1
ANNOUNCEMENT
Major Credit Repositories
A "full-file" status report for each mortgage serviced for Xxxxxx Mae must be
sent to the following repositories each month (beginning with the month ending
March 31, 1996):
Company Telephone Number
Consumer Credit Associates, Inc. Call (000) 000-0000, either extension
Threadneedle Street, Suite 200 950 150, 101, or 112, for all inquiries.
Xxxxxxx, Xxxxx 00000-0000
Equifax Members that have an account number may
call their local sales representative
for all inquiries; lenders that need to
set up an account should call (800)
685-5000 and select the customer
assistance option.
TRW Information Systems & Services Call (000) 000-0000 for all inquiries,
000 XXX Xxxxxxx current members should select option 3;
Xxxxx, Xxxxx 00000 lenders that need to set up an account
should select Option 4.
Trans Union Corporation Call (000) 000-0000 to get the name of
555 West Xxxxx the local bureau to contact about
Xxxxxxx, Xxxxxxxx 00000 setting up an account or obtaining other
information
G-2
EXHIBIT H
FORM OF CERTIFICATION REGARDING SERVICING CRITERIA TO BE ADDRESSED
IN REPORT ON ASSESSMENT OF COMPLIANCE
-----------------------------------------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
General Servicing Considerations
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance X
or other triggers and events of default in accordance with the
transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain
a back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the X
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
agreements.
Cash Collection and Administration
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to X
an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows X
or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
The related accounts for the transaction, such as cash X
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized X
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items.
These reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days
specified in the transaction agreements.
H-1
-----------------------------------------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
1122(d)(3)(i) Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance X
with timeframes, distribution priority and other terms set forth in
the transaction agreements.
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of X
1122(d)(3)(iii) days specified in the transaction agreements.
Amounts remitted to investors per the investor reports X
agree with cancelled checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
Pool Asset Administration
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as X
required by the transaction agreements or related
mortgage loan documents.
Mortgage loan and related documents are safeguarded as required by X
1122(d)(4)(ii) the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are X
made, reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the X
Servicer's records with respect to an obligor's unpaid principal
balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's X
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
the transaction agreements and related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other requirements
established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during the X
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency
is deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans X
with variable rates are computed based on the related mortgage loan
documents.
H-2
-----------------------------------------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
number of days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance X
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be X
made on behalf of an obligor are paid from the servicer's funds and
not charged to the obligor, unless the late payment was due to the
obligor's error or omission.
Disbursements made on behalf of an obligor are posted X
within two business days to the obligor's records
maintained by the servicer, or such other number of days
specified in the transaction
1122(d)(4)(xiii) agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
agreements.
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
1122(d)(4)(xv) is maintained as set forth in the transaction agreements.
H-3
EXHIBIT I
TRANSACTION PARTIES
Trustee: Citibank, N.A.
Securities Administrator: N/A
Master Servicer: Aurora Loan Services LLC
Credit Risk Manager: N/A
PMI Insurer: N/A
Interest Rate Swap Counterparty: N/A
Interest Rate Cap Counterparty: N/A
Servicers: Countrywide Home Loan Servicing LP, GMAC Mortgage Corporation,
SunTrust Mortgage, Inc. and Xxxxx Fargo Bank, N.A.
Originators: Commercial Federal Mortgage Corporation, Countrywide Home Loans
Servicing LP, GMAC Mortgage Corporation, GreenPoint Mortgage Funding, Inc., NBC
Mortgage, Realty Mortgage Corporation, SouthTrust Corporation, SunTrust
Mortgage, Inc., and Xxxxx Fargo Bank, N.A.
Custodians: U.S. Bank National Association and Xxxxx Fargo Bank, N.A.
Seller: Xxxxxx Brothers Holdings Inc.
I-1
EXHIBIT J
FORM OF ANNUAL OFFICER'S CERTIFICATE
Via Overnight Delivery
[DATE]
To:
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Mail Stop 3199
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Compliance Coordinator
(SASCO 2006-3H)
RE: Annual officer's certificate delivered pursuant to Section 5.03 of that
certain servicing agreement, dated as of March 1, 2006 (the "Agreement"),
by and among Xxxxxx Brothers Holdings Inc., Aurora Loan Services LLC, as
servicer (the "Servicer") and as master servicer, and acknowledged by
Citibank, N.A., as Trustee, relating to the issuance of the Structured
Asset Securities Corporation Mortgage Pass-Through Certificates, Series
2006-3H
[_______], the undersigned, a duly authorized [_______] of [the Servicer][Name
of Subservicer], does hereby certify the following for the [calendar
year][identify other period] ending on December 31, 20[__]:
1. A review of the activities of the Servicer during the preceding calendar
year (or portion thereof) and of its performance under the Agreement for
such period has been made under my supervision.
2. To the best of my knowledge, based on such review, the Servicer has
fulfilled all of its obligations under the Agreement in all material
respects throughout such year (or applicable portion thereof), or, if
there has been a failure to fulfill any such obligation in any material
respect, I have specifically identified to the Master Servicer, the
Depositor and the Trustee each such failure known to me and the nature and
status thereof, including the steps being taken by the Servicer to remedy
such default.
Certified By:
______________________________
Name:
Title:
J-1