EX-10.79
================================================================================
SERVICING RIGHTS PURCHASE AGREEMENT
by and between
OCWEN FEDERAL BANK FSB
(Purchaser)
and
NEW CENTURY MORTGAGE CORPORATION
(Seller)
Dated as of February 28, 2001
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms ...................................... 1
ARTICLE II
SALE AND CONVEYANCE OF SERVICING RIGHTS
Section 2.01 Agreement to Sell the Servicing Rights ............. 7
Section 2.02 Purchase Price ..................................... 7
Section 2.03 Reimbursement of Advances .......................... 8
Section 2.04 Closing Conditions ................................. 8
Section 2.05 Breakup Fee ........................................ 9
Section 2.06 Clean-Up Calls ..................................... 10
Section 2.07 Solicitation of Mortgage Loans ..................... 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Seller ....... 11
Section 3.02 Certain Provisions Relating to the Seller's
Representations and Warranties ..................... 16
Section 3.03 Representations and Warranties of the Purchaser .... 17
ARTICLE IV
CLOSING DATE AND TRANSFER DATE DELIVERIES
Section 4.01 Documents, Schedules and Exhibits Required with
Respect to the Closing Date ........................ 18
Section 4.02 Documents and Schedules Required With Respect
to the Transfer Date ............................... 19
Section 4.03 Access to Information .............................. 22
Section 4.04 Transfer Expenses .................................. 22
Section 4.05 Purchaser to Service Pursuant to MBS
Servicing Agreements ............................... 23
Section 4.06 Document Deficiencies .............................. 23
ARTICLE V
REMEDIES
Section 5.01 Seller's Indemnification Obligations ............... 24
Section 5.02 Purchaser's Obligations ............................ 24
i
ARTICLE VI
ADMINISTRATION OF TRANSFER OF SERVICING
Section 6.01 Interim Servicing .................................. 26
Section 6.02 Notice Letters of Transfer ......................... 28
Section 6.03 Statements ......................................... 28
Section 6.04 Tax Contracts ...................................... 28
Section 6.05 Payments and Notices Received After the
Transfer Date ...................................... 28
Section 6.06 Service Bureau Cooperation ......................... 29
Section 6.07 Limitations on Interim Servicing ................... 29
Section 6.08 Custodian Approval ................................. 29
Section 6.09 Missing Social Security Number; Forms W-8 or W-9 ... 30
Section 6.10 Servicing Platform ................................. 30
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.01 Publicity .......................................... 32
Section 7.02 Consents ........................................... 32
Section 7.03 Third Party Purchase Option ........................ 32
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment .......................................... 34
Section 8.02 Governing Law ...................................... 34
Section 8.03 Notices ............................................ 34
Section 8.04 Exhibits ........................................... 35
Section 8.05 General Interpretive Principles .................... 35
Section 8.06 Reproduction of Documents .......................... 35
Section 8.07 Counterparts ....................................... 36
Section 8.08 Entire Agreement, Successors and Assigns ........... 36
Section 8.09 Intention of the Parties ........................... 36
Section 8.10 Brokerage Commissions .............................. 36
Section 8.11 Further Assurances ................................. 36
ii
SCHEDULES
A. Mortgage Loan Schedule
B. Defaults under MBS Servicing Agreements
C. Assignments, Transfers or Encumbrances of Servicing Rights
EXHIBITS
1. Contents of Mortgage File
2. Form of Seller's Closing Certificate
3. Form of Opinion of Counsel to the Seller
4. Servicing Documents
5. Computer Tape Format
6. List of MBS Servicing Agreements
7. Form of Pricing Letter
8. Summary of Terms and Conditions for Interim Servicing Agreement
9. Document Deficiency List
10. Form of Collection Account Agency Agreement
11. Servicing Standards
iii
SERVICING RIGHTS PURCHASE AGREEMENT
This Servicing Rights Purchase Agreement ("Agreement") is made as of
February 28, 2001 and is executed between New Century Mortgage Corporation, a
California corporation ("Seller") and Ocwen Federal Bank FSB, a federally
chartered savings bank ("Purchaser").
PRELIMINARY STATEMENT
The Seller owns the Servicing Rights (as defined herein) with
respect to certain residential mortgage loans which are subject to one of the
MBS Servicing Agreements which are identified on Exhibit 6. The Seller desires
to resign as servicer and/or master servicer under the MBS Servicing Agreements
and to sell and transfer the Servicing Rights to the Purchaser, and the
Purchaser desires to be appointed as the servicer and/or master servicer under
the MBS Servicing Agreements and to purchase and assume the Servicing Rights to
the extent hereinafter provided.
In consideration of the mutual agreements hereinafter set forth, the
Seller and the Purchaser agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement, the
following words and phrases shall have the following meanings specified in this
Article:
"Advance": Any amounts advanced in accordance with the terms of an
MBS Servicing Agreement in connection with delinquent Monthly Payments, the
payment of taxes and insurance or otherwise made with respect to a Mortgage Loan
in accordance with the Servicing Requirements applicable to the Mortgage Loan
and reimbursable in accordance with such Servicing Requirements.
"Agreement": This Servicing Rights Purchase Agreement including all
schedules, exhibits and supplements hereto and amendments hereof.
"Ancillary Income": All release fees, late payment charges,
assumption fees, insufficient fund charges, float, investment income and
earnings with respect to any Collection Account, distribution account, REO
account or similar account, and other similar fees, other than prepayment
penalties and fees.
"Assignment of Mortgage": An assignment of a Mortgage, notice of
transfer or equivalent instrument, in form acceptable for recording and
sufficient under the laws of the jurisdiction wherein the Mortgaged Property is
located to reflect of record the transfer of the Mortgage.
"Bond Insurance Policy": With respect to each MBS Servicing
Agreement as to which any of the certificates issued thereunder are subject to
bond insurance, the policy issued by the related Bond Insurer pursuant to which
such insurance is provided.
-2-
"Bond Insurer": With respect to each MBS Servicing Agreement as to
which any of the certificates issued thereunder are subject to a Bond Insurance
Policy, Financial Security Assurance, Inc. as the issuer of such Bond Insurance
Policy.
"Bond Insurer Letters": With respect to each MBS Servicing Agreement
as to which any of the certificates issued thereunder are subject to a Bond
Insurance Policy, a letter or letters from the related Bond Insurer sufficient
to satisfy the requirements of such MBS Servicing Agreement with respect to the
appointment of the Purchaser as the servicer under the MBS Servicing Agreement,
and which does not reduce or limit the rights or compensation of the servicer
under the applicable MBS Servicing Agreement.
"Borrower": The individual(s) obligated to repay a Mortgage Loan.
"Business Day": A day of the week other than (a) Saturday or Sunday
or (b) a day on which banking or savings institutions in the state of
incorporation or principal business location of the Seller or of the Purchaser
are authorized or permitted under applicable law to be closed.
"Closing Date": March 30, 2001 or such other date mutually agreed
upon between the Purchaser and Seller; provided that, the parties shall use
reasonable efforts to close on or before March 22, 2001.
"Collection Account": An account or accounts maintained by the
Seller for the deposit of principal and interest payments received in respect of
one or more Mortgage Loans in accordance with the MBS Servicing Agreements,
whether designated as a certificate account, collection account, custodial
account or otherwise.
"Collection Account Agency Agreement": The agreement substantially
in the form of Exhibit 10 among the Seller, the Purchaser and the depository
institution holding the Collection Account with respect to each MBS Servicing
Agreement.
"Custodial File": With respect to an individual Mortgage Loan, the
Mortgage Loan documents required to be held by a Custodian pursuant to the terms
of the related MBS Servicing Agreement.
"Custodian": An entity acting as Mortgage Loan document custodian
pursuant to the terms of the related MBS Servicing Agreement.
"Cut-off Date": The first day of the month in which the Closing Date
occurs.
"Data Base": All information in the computer tape format attached
hereto as Exhibit 5 delivered by the Seller, whether before or on or after the
Closing Date, in connection with this Agreement.
"EDP": Electronic data processing.
-3-
"Escrow Account": Each account, if any, maintained by the Seller
pursuant to the terms of an MBS Servicing Agreement for the deposit of Escrow
Payments received in respect of one or more Mortgage Loans in accordance with
the related Servicing Requirements.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, common charges in condominiums and planned unit
developments, mortgage insurance premiums, fire and hazard insurance premiums
and other payments which have been escrowed by the Borrower with the mortgagee
pursuant to any Mortgage Loan.
"Event of Default": As defined in the related MBS Servicing
Agreement.
"FHLMC": The Federal Home Loan Mortgage Corporation or any
successor.
"FNMA": The Federal National Mortgage Association or any successor.
"Forbearance Agreement": The agreement or agreements entered into by
the Bond Insurer and each Trustee, pursuant to which each of such entities (i)
waives any termination right applicable to the servicer under any applicable MBS
Servicing Agreements due to the failure to satisfy any collateral performance
tests or corporate bond rating tests applicable to the Servicer so long as the
Purchaser services the related Mortgage Loans in accordance with the servicing
standards specified in such Forbearance Agreement and (ii) releases the
Purchaser with respect to any acts or omissions of prior servicers in servicing
the Mortgage Loans prior to the Transfer Date.
"Hold Back Amount": An amount equal to ten percent (10%) of the
Purchase Price payable to the Seller by the Purchaser pursuant to Section 2.02.
"HUD": The United States Department of Housing and Urban
Development.
"Interim Period": As defined in Section 6.01.
"Insurance Policy": All of the Seller's right, title and interest
under any of the hazard insurance, title insurance and credit life insurance
policies and certificates related to a Mortgage Loan. References in this
Agreement to hazard insurance shall be construed to include flood insurance to
the extent that flood insurance is required of a Mortgage Loan pursuant to the
Servicing Requirements.
"Investor": With respect to each Mortgage Loan the Person or Persons
who own the beneficial interest in the Mortgage Loan pursuant to the terms of
the related MBS Servicing Agreement.
"MBS Servicing Agreement": Each of the MBS Servicing Agreements
identified on Exhibit 6 hereto, as amended on the Closing Date.
"Monthly Payment": The scheduled monthly payment of principal and
interest on a Mortgage Loan.
-4-
"Mortgage": The mortgage, deed of trust or other instrument creating
a first or junior lien on real property securing the Mortgage Note.
"Mortgage File": The documents pertaining to a particular Mortgage
Loan which are specified on Exhibit 1 hereto.
"Mortgage Loan": An individual mortgage loan which is subject to
this Agreement and identified on the Mortgage Loan Schedule.
"Mortgage Loan Schedule": The hard copy list of Mortgage Loans
attached as Schedule A hereto and attached as Schedule 1 to the Seller's Closing
Certificate which list shall set forth, as of the date specified in such list,
the following information for each Mortgage Loan:
(i) the loan number, investor code and, where available, Pool
Number;
(ii) the outstanding principal balance;
(iii) the last due date with respect to which interest has been
paid;
(iv) codes indicating the applicable Investor;
(v) note rate, servicing fee rate payable pursuant to the MBS
Servicing Agreement and Investor guarantee fee, if any;
(vi) maturity date, where available;
(vii) property location, by state;
(viii) the guarantee fee or pool policy insurance fee, if any; and
(ix) a code indicating the MBS Servicing Agreement pursuant to
which the Mortgage Loan is serviced.
"Mortgage Note": The note or other evidence of the indebtedness of a
Borrower secured by a Mortgage.
"Mortgaged Property": The underlying real property securing
repayment of a Mortgage Note.
"Pool": A group of loans which includes any Mortgage Loan and is
considered by the applicable Investor to be aggregated for purposes of
servicing.
"Pool Number": Such pool or accounting group designation as may be
required by the Investors to service the Mortgage Loans or to transfer the
Servicing Rights.
-5-
"Pool Schedules": The Schedule of Mortgage Loans by Pool in a form
acceptable to the Purchaser.
"Pooled Mortgage Loan": Each Mortgage Loan which is identified on
Schedule 1 to the Seller's closing certificate and which is serviced pursuant to
a MBS Servicing Agreement and owned by the related Investors in a pass-through
format.
"Pricing Letter": The letter agreement substantially in the form of
Exhibit 7 hereto, executed by Seller and Purchaser in connection with the sale
of the Servicing Rights that sets forth the terms of such sale, including a
description of the related Mortgage Loans and the related Purchase Price.
"Purchase Price": As defined in Section 2.02.
"Purchaser": Ocwen Federal Bank FSB.
"Rating Agency": As defined in the MBS Servicing Agreement.
"Rating Agency Letters": With respect to each MBS Servicing
Agreement, a letter or letters from the related Rating Agency or Rating Agencies
sufficient to satisfy the requirements of such MBS Servicing Agreement with
respect to the appointment of the Purchaser as the servicer under the MBS
Servicing Agreement, and which does not reduce or limit the rights or
compensation of the servicer under the applicable MBS Servicing Agreement.
"Seller": New Century Mortgage Corporation.
"Seller's Closing Certificate": An officer's certificate in the form
of Exhibit 2 prepared by or on behalf of the Seller and delivered to the
Purchaser pursuant to this Agreement.
"Servicing Fee": The amount to be paid to the Purchaser under the
applicable MBS Servicing Agreement related to a Mortgage Loan, as consideration
for servicing and/or master servicing the Mortgage Loan which is specified on
the Mortgage Loan Schedule.
"Servicing Requirements": With respect to each Mortgage Loan, the
applicable provisions of the related MBS Servicing Agreement with respect to the
servicing, control and administration of such Mortgage Loan.
"Servicing Rights": All of Seller's right, title and interest in and
to the servicing and/or master servicing of the Mortgage Loans pursuant to any
MBS Servicing Agreement listed on Exhibit 6 hereto, as amended on the Closing
Date, including all rights under each applicable MBS Servicing Agreement to
receive or retain amounts in respect of Servicing Fees, Ancillary Income,
reimbursement for Advances, or other expenses and costs, and investment earnings
or other benefits from positive account balances, together with all Collection
Account balances, Escrow Account balances, contract rights, incidental income
and benefits to the extent payable to Seller, and exclusive rights to possession
and use of servicing files and records directly or indirectly related thereto,
-6-
including, without limitation, Borrower lists, Insurance Policies and tax
service agreements and including the right to exercise any clean-up call, all as
provided under the MBS Servicing Agreements and subject, with respect to an MBS
Servicing Agreement, to any rights of the Trustee, the Bond Insurer and the
related security holders specified in such MBS Servicing Agreement; provided
that, the term Servicing Rights shall not include any obligations of Seller as
depositor or seller under any MBS Servicing Agreement, including but not limited
to, any obligations in connection with any representations or warranties made by
the Seller or any obligation to remedy breaches of any representations or
warranties or to indemnify any party in connection therewith or any other
recourse obligation of the Seller thereunder.
"Servicing Standards": Those certain servicing standards of the
Purchaser set forth on Exhibit 11 hereto.
"Transfer Date": With respect to a Mortgage Loan, the date on which
the physical servicing of the Mortgage Loan is transferred to the Purchaser
pursuant to this Agreement which date shall not be later than August 1, 2001.
"Transfer Instructions": The instructions specifying the manner in
which the servicing of the Mortgage Loans shall be transferred to Purchaser as
agreed upon by Purchaser and Seller in good faith.
"Trustee": With respect to each MBS Servicing Agreement, the entity
identified as the "trustee" and/or "trust administrator" therein, including
without limitation, any grantor trustee, indenture trustee or owner trustee
thereunder.
"Trustee Letters": With respect to each MBS Servicing Agreement, a
letter or letters sufficient to satisfy the requirements of such MBS Servicing
Agreement with respect to the appointment of the Purchaser as the servicer under
the MBS Servicing Agreement, and which does not reduce or limit the rights or
compensation of the servicer under the applicable MBS Servicing Agreement or
impose unduly burdensome requirements on the Purchaser.
-7-
ARTICLE II
SALE AND CONVEYANCE OF SERVICING RIGHTS
Section 2.01 Agreement to Sell the Servicing Rights.
Subject to the terms and provisions of this Agreement, the Purchaser
hereby purchases from the Seller and the Seller hereby sells, transfers,
assigns, conveys and sets over to the Purchaser as of the Closing Date, the
Servicing Rights, and the Purchaser hereby agrees to perform the servicing of
each Mortgage Loan in accordance with the terms of each related MBS Servicing
Agreement and the Servicing Standards; provided that, the Purchaser shall not
assume any repurchase obligations pursuant to any MBS Servicing Agreement, or
any indemnification obligations pursuant to any MBS Servicing Agreement for
actions taken by Seller or a prior servicer prior to the Closing Date, and shall
have no liability for any action or event which occurred prior to the Closing
Date.
The Servicing Rights are with respect to Mortgage Loans serving as
collateral for mortgage-backed securities issued and serviced pursuant to the
terms of a related MBS Servicing Agreement.
Section 2.02 Purchase Price.
(a) The purchase price to be paid by the Purchaser to the Seller for
the Servicing Rights (the "Purchase Price") shall be equal to the amount set
forth in the Pricing Letter. The Purchaser's obligation to pay the Purchase
Price will terminate without further liability of the Purchaser in the event
that the transfer of the Servicing Rights as contemplated in this Agreement is
not consummated for any reason. The Purchase Price has been based upon loan
level data and other information provided by Seller. In the event that there are
any material differences in this information from due diligence findings by the
Purchaser, the Purchase Price shall be subject to a mutually agreeable
adjustment by the Purchaser and the Seller.
(b) The Purchase Price shall be paid by the Purchaser as follows:
ninety percent (90%) of the Purchase Price will be paid on the Closing Date, in
one or more wire transfers of immediately available funds, to such party or
parties as the Seller shall designate, and the remaining ten percent (10%)
constituting the Hold Back Amount shall be paid to the Seller pursuant to
Section 2.02(c). The portion of the Purchase Price to be paid on the Closing
Date shall be based on the unpaid principal balance of the Mortgage Loans as of
the Cut-off Date.
(c) Within 15 days following the Transfer Date, the Purchaser shall
deliver to the Seller the servicing documents set forth on Exhibit 4 hereto that
are required to be delivered pursuant to the Transfer Instructions which have
not been delivered to Purchaser or its designee and shall notify Seller of any
errors with respect to the reconciliation statements provided pursuant to the
Transfer Instructions (each such document deficiency or reconciliation statement
error, a "Deficiency"). Within thirty (30) days following the Transfer Date the
Purchaser shall pay to the Seller an amount equal to the Hold Back Amount
reduced by the amount required pursuant to the
-8-
reconciliation performed pursuant to this Section 2.02(c) and further reduced by
$1,000 with respect to each servicing document set forth on Exhibit 4 that was
not delivered to the Purchaser.
(d) The Purchaser and the Seller acknowledge and agree that in
connection with the purchase of the Servicing Rights, the Purchaser shall be
entitled to retain all Servicing Fees and Ancillary Income collected on or after
the Cut-off Date; provided that, during the period from the Cut-off Date to the
Transfer Date, the Purchaser shall pay to the Seller a monthly interim servicing
fee in an amount equal to $15 per Mortgage Loan; provided further that, the
Seller shall be entitled to retain any investment earnings on any Collection
Account, distribution account or REO account which accrues prior to the Cut-off
Date. If the Interim Period includes any partial month, the Servicing Fee for
such month shall be pro rated at a per diem rate based upon a 30-day month.
Section 2.03 Reimbursement of Advances.
On the Closing Date, the Purchaser agrees to reimburse the Seller
for 90% of the amount of the unreimbursed Advances made by the Seller which were
outstanding as of the date which is three (3) Business Days prior to the Closing
Date, which were made pursuant to the terms of any MBS Servicing Agreement and
are recoverable under the terms of such MBS Servicing Agreement. The Seller
shall, within two (2) Business Days after the Closing Date, provide to the
Purchaser evidence of the dollar amount of all Advances as of the Closing Date,
broken down by MBS Servicing Agreement, made by the Seller as servicer which had
not been previously reimbursed. As soon as practical following the Transfer
Date, but in no event more than fifteen (15) Business Days following the
Transfer Date, the Purchaser and Seller shall reconcile the actual amount of
Advances that were outstanding as of the Closing Date and the recoverability
status of such Advances under the terms of any MBS Servicing Agreement and make
any monetary adjustments to the amount required to be reimbursed to the Seller.
Following such reconciliation, the remaining ten percent (10%) of the
reimbursable Advance amount due the Seller shall be paid to the Seller, as
adjusted to reflect any monetary adjustments required to be made as a result of
such reconciliation. To the extent that such remaining ten percent (10%) is not
sufficient to compensate the Purchaser in connection with such reconciliation,
the Seller shall refund to the Purchaser such price differential within three
(3) Business Days of a request therefor from the Purchaser. The foregoing
true-up is anticipated to be completed within 15 Business Days following the
Transfer Date on which date any payment required hereunder shall be made. The
Purchaser shall be entitled to retain the full amount of any reimbursements for
any Advances that are received following the Cut-off Date and all Ancillary
Income and Servicing Fees received after the Cut-off Date; provided that, the
Seller shall be entitled to retain any investment earnings on any Collection
Account, distribution account or REO account which accrues prior to the Cut-off
Date.
Section 2.04 Closing Conditions.
The Purchaser's obligations to consummate its purchase of the
Servicing Rights pursuant to this Agreement is subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:
-9-
(a) The Seller shall have performed in all material respects all of
its covenants and agreements contained herein which are required to be
performed by it on or prior to the Closing Date;
(b) All of the representations and warranties of the Seller
contained in this Agreement shall be true and correct in all material
respects as of the Closing Date;
(c) The Purchaser shall have received in escrow, or the Purchaser's
attorneys shall have received in escrow, each of the documents specified
in Section 4.01 for delivery on or prior to the Closing Date, duly
executed by all signatories other than the Purchaser, as required by the
respective terms thereof;
(d) The Purchaser shall have received an opinion of independent
counsel that the appointment of the Purchaser as master servicer or
servicer is in material compliance with the terms and conditions of each
applicable MBS Servicing Agreements; and
(e) Any other approval of the transfer of the Servicing Rights
required to be obtained under the related MBS Servicing Agreements shall
have been obtained.
Section 2.05 Breakup Fee.
(a) In the event that (i) the Seller sells the Servicing Rights to a
third party prior to the Closing Date and the Purchaser has not materially
breached its obligations pursuant to this Agreement or (ii) the Seller fails to
close the sale of the Servicing Rights to the Purchaser on the Closing Date for
any reason, other than due to the bankruptcy of the Purchaser, court order or
force majeure, and the Purchaser has satisfied its obligations to close (and is
deemed an acceptable successor servicer by the Bond Insurer and Trustee), then
the Seller will pay the Purchaser a breakup fee as liquidated damages in the
amount equal to $5,000,000, such amount to be paid on or before April 2, 2001 by
wire transfer to the account designated by the Purchaser.
(b) In the event that the Purchaser fails to close the purchase of
the Servicing Rights from the Seller on the Closing Date for any reason, other
than due to the bankruptcy of the Seller, court order or force majeure (assuming
the satisfaction of the closing conditions in Section 2.04) and the Seller has
satisfied its obligations to close, then the Purchaser will:
(i) pay the Seller a breakup fee as liquidated damages in the
amount equal to $5,000,000, such amount to be paid on or before
April 2, 2001 by wire transfer to the account designated by the
Seller; and
(ii) enter into a servicing agreement with respect to the
Mortgage Loans that are subject to all the MBS Servicing Agreements
identified on Exhibit 6 hereto as of the date hereof, which
servicing agreement shall (A) provide for the Purchaser to service
the Mortgage Loans pursuant to the terms of such MBS Servicing
Agreements, the Servicing Standards and Accepted Servicing
Practices, (B) require the Seller to pay to the Purchaser all
Ancillary Income received and a servicing fee
-10-
which accrues at a rate of 35 basis points per annum, (C) provide
for a term of six months, (D) provide for the Purchaser to make
Advances required to be made under the MBS Servicing Agreements
during such period, and (E) otherwise be mutually agreeable to the
Purchaser and the Seller. In addition, the Purchaser shall maintain
during such six month period, the related financing facility between
the Purchaser and the Seller for any Advances that were previously
funded under such facility in accordance with the terms thereof.
Section 2.06 Clean-Up Calls.
The Purchaser and the Seller each agrees that it shall not exercise
any "clean-up call" rights exercisable by such party pursuant to any MBS
Servicing Agreement without having obtained the prior written consent of the
other party hereto.
Section 2.07 Solicitation of Mortgage Loans.
(a) Notwithstanding the terms of this Agreement, to the extent
permitted under applicable law and the MBS Agreements, the Seller shall retain
the exclusive ability to solicit Borrowers under the Mortgage Loans for new
mortgage products. The Seller shall reimburse the Purchaser for all reasonable
expenses relating to such permitted solicitations and incurred by the Purchaser.
All such solicitations shall be subject to all applicable laws, including,
without limitation, privacy and consumer protection laws, and contractual
restrictions including those set forth in the MBS Servicing Agreements and
Mortgage Loan documents. In the event that the Seller refinances any Mortgage
Loan subject to this Agreement, the Seller shall pay to the Purchaser a mutually
agreed upon amount. In the event that the Purchaser receives a payoff request
with respect to any Mortgage Loan, subject to the requirements of applicable law
and the MBS Agreements, the Purchaser shall notify the Seller within one (1)
Business Day of such request. Subject to the requirements of applicable law and
the MBS Agreements, the Seller shall discuss alternatives to payoff with the
Borrower, including obtaining a second lien mortgage loan, and discuss
refinancing such Mortgage Loan if such Borrower is not interested in such
alternatives. In the event of any refinance of any Mortgage Loan by the Seller
after following the procedures set forth in the preceding sentence, the Seller
shall not be required to pay the fee specified in this Section 2.07(a).
(b) To the extent permitted under any applicable law, the MBS
Agreement and the related Mortgage Loan documents, if the Seller desires that
the Purchaser waive any prepayment penalty, to the extent that the Purchaser
would be required under the applicable MBS Servicing Agreement to pay such
prepayment penalty to the trust or a certificateholder, the Seller shall
promptly pay the Purchaser the amount of such prepayment penalty within three
(3) Business Days following payoff of such Mortgage Loan.
-11-
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Seller.
The Seller represents, warrants and covenants to the Purchaser as to
the Servicing Rights (and the related Mortgage Loans) that as of each date from
and including the Closing Date through and including the Transfer Date:
(a) The Seller is a corporation duly organized and in good standing
under the laws of the state of California and was at all material times and now
is qualified to do business and duly licensed in those states in which each
Mortgaged Property is located if the laws of such states require qualification
or licensing for the conduct of banking or business of the type conducted by the
Seller.
(b) The Seller has full power and authority, corporate and
otherwise, to execute and deliver this Agreement and to perform all its
obligations hereunder. The execution, delivery and performance of this Agreement
by the Seller and consummation of the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate,
shareholder or other action, and this Agreement has been duly and validly
executed and delivered by the Seller and is valid and enforceable against the
Seller in accordance with its terms, except as such enforceability may be
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity.
(c) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by any Seller of, or compliance by any Seller with, this Agreement,
or the consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Seller has obtained
such approval. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated (assuming receipt of all necessary
consents) by this Agreement nor compliance with its terms and conditions, shall
conflict with or result in the breach of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance of any
nature upon, any of the Mortgage Loans, the Servicing Rights or the properties
or assets of the Seller, any of the terms, conditions or provisions of its
charter or by-laws or any similar corporate documents of the Seller or any
mortgage, indenture, deed of trust, loan or credit agreement or other agreement
or instrument to which the Seller is now a party or by which it is bound or any
federal or state law, rule or regulation or any judicial or administrative
decree, order, ruling or regulation applicable to it, or to the Servicing
Rights.
(d) There is no litigation or action at law or in equity pending,
or, to its knowledge, threatened, against the Seller and no proceeding or
investigation of any kind is pending or, to its knowledge, threatened, by any
federal, state or local governmental or administrative body, which could
reasonably be expected to materially affect the Servicing Rights or the
Purchaser's ability to consummate the transactions contemplated hereby.
-12-
(e) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller and the sale and
transfer of the Servicing Rights by the Seller are not subject to the bulk
transfer or similar statutory provisions of applicable state or federal law.
(f) The Seller is the sole holder and owner of the Servicing Rights
and has the right to sell, assign and transfer the Servicing Rights as of the
Closing Date and to assign, transfer and deliver the Servicing Rights as
contemplated by this Agreement free and clear of any and all claims, charges,
defenses, security interests, liens, offsets and encumbrances.
(g) The Seller, any current or prior holder of a Mortgage Loan, any
prior servicer of a Mortgage Loan and each party originally named as payee under
the Mortgage Notes and as mortgagee under the Mortgage with respect to the
Mortgage Loan, is and was at all material times, in compliance with any and all
applicable "doing business" and licensing requirements of the laws of the state
wherein the Mortgaged Property is located. Except as set forth on Schedule B
hereto, the Seller is not in default in the performance of its obligations under
any MBS Servicing Agreement, and the Seller is, and each prior servicer was, in
compliance with all applicable laws and regulations relating to the Servicing
Rights, and there has been no occurrence as of the Closing Date that could cause
the cancellation of the Servicing Rights or material changes in procedures with
respect to the Mortgage Loans. The Seller has and has at all times had all
licenses, permits, consents, approvals, orders, certificates, authorizations,
declarations and filings (collectively, "Permits") required by all governmental
entities (including, without limitation, any federal, state or local authorities
or agencies regulating debt collectors, consumer lenders, mortgage bankers, or
servicers and their operations and all courts and other tribunals) which are
necessary for the conduct of the servicing business and the origination, sale or
servicing of the Mortgage Loans and has obtained from any originator or prior
holder of such Mortgage Loans a representation to that effect except where the
failure to hold such a Permit would not have a material adverse effect on the
rights of any servicer.
(h) The Seller or any prior servicer under the MBS Servicing
Agreements have taken all necessary steps to make and keep any hazard insurance
policy, and title insurance policy valid, binding and enforceable; each such
insurance policy is the binding, valid and enforceable obligation of the private
insurer to the full extent thereof, without surcharge, defense or set-off,
subject to bankruptcy and insolvency laws and all premiums thereon have been
paid. Such insurance policies may be included in a blanket insurance policy to
the extent permitted under the applicable MBS Servicing Agreement.
(i) There are no actions, claims, litigation or governmental
investigations pending or, to the knowledge of the Seller, threatened, against
the Seller or with respect to any Mortgage Loan, which relate to, or affect the
Mortgage Loans or the Seller's right to sell, assign and transfer, the Servicing
Rights (other than usual and customary actions such as foreclosure proceedings
as to the Mortgage Loans).
(j) The transfer of the Servicing Rights shall be treated as a sale
on the books and records of the Seller, and the Seller has determined that, and
will treat, the disposition of the Servicing Rights pursuant to this Agreement
for tax and accounting purposes as a sale. The Seller
-13-
shall maintain a complete set of books and records for the Servicing Rights
which shall be clearly marked to reflect the ownership of the Servicing Rights
by the Purchaser as of the Closing Date and the entitlement of the Purchaser to
the Servicing Fees and Ancillary Income as provided herein following the Cut-off
Date.
(k) The consideration received by the Seller upon the sale of the
Servicing Rights constitutes fair consideration and reasonably equivalent value
for such Servicing Rights.
(l) The Seller is solvent and will not be rendered insolvent by the
consummation of the transactions contemplated hereby. The Seller is not
transferring any Servicing Rights with any intent to hinder, delay or defraud
any of its creditors.
(m) The information set forth on the Mortgage Loan Schedule and the
Data Base, and on any updates thereof or other document, instrument or schedule
furnished to the Purchaser by the Seller or one of its affiliates pursuant to,
or prior to and in connection with, this Agreement is accurate and complete in
all material respects. All Mortgage Loan interest rate information is net of any
and all insurance premiums.
(n) All Collection Accounts and Escrow Accounts are maintained by
the Seller and have been maintained in accordance with applicable law and the
terms of the Mortgage Loans and the related Servicing Requirements. The Escrow
Payments required by the Mortgages which have been paid to the Seller for the
account of the Borrower are on deposit in the appropriate Escrow Account.
(o) The Advances are valid and subsisting accounts owing to the
Seller, and are carried on the books of the Seller at values determined in
accordance with generally accepted accounting principles, and are not subject to
any set-offs or claims of the account debtor.
(p) All documentation with respect to the servicing of the Mortgage
Loans has been properly and accurately completed and executed, and all documents
required hereby or by Servicing Requirements to be in the Custodial File and
Mortgage File are contained therein and final certifications thereto by the
Custodian have been completed.
(q) All funds received by the Seller in connection with the Mortgage
Loans, including, without limitation, foreclosure proceeds, fire insurance
proceeds from fire losses, condemnation proceeds and principal reductions, have
promptly been deposited in the Collection Account or Escrow Account, and all
such funds have been applied to reduce the principal balance of the Mortgage
Loans in question, or for reimbursement of repairs to the Mortgaged Property or
as otherwise permitted by applicable law and the Servicing Requirements.
(r) All payments received by the Seller with respect to any Mortgage
Loan have been remitted and properly accounted for pursuant to Servicing
Requirements. No payment of principal or interest on any such Mortgage Loan has
been forgiven, suspended or rescheduled except as disclosed on the Mortgage Loan
Schedule and Data Base, and no waiver, alteration or modification which would
adversely affect the value of the Servicing Rights has been made to the
-14-
terms or provisions of such Mortgage Loans except as disclosed on the Mortgage
Loan Schedule and Data Base.
(s) Each Mortgage Loan has been originated in compliance with, or is
exempt from, all applicable state or federal laws, regulations, and Servicing
Requirements, including, without limitation, those pertaining to usury and at
origination all Mortgage Loans documents were in compliance with applicable law
and Servicing Requirements.
(t) The Seller and any current or prior mortgagee or servicer of the
Mortgage Loans have complied in all respects with every applicable federal,
state, or local law, statute, and ordinance, and any rule, regulation, or order
issued thereunder including, without limitation, the Servicing Requirements, the
fair housing, anti-redlining, equal credit opportunity, truth-in-lending, real
estate settlement procedures, fair credit reporting, and every other prohibition
against unlawful discrimination in residential lending or governing consumer
credit, and also including, without limitation, the Consumer Credit Reporting
Act, Equal Credit Opportunity Act of 1975 and Regulation B, Fair Credit
Reporting Act, Truth-in-Lending Law, in particular, Regulation Z as amended, the
Flood Disaster Protection Act of 1973, the Real Estate Settlement Procedures Act
of 1974 as amended, and state and local consumer credit codes and laws. The
collection and all other practices of the Seller in connection with the
origination or servicing of the Mortgage Loans including, without limitation,
the timing and manner of liquidation, are and have been reasonable, prudent and
customary and in conformity with accepted servicing practices of prudent lending
institutions and in compliance with all applicable laws. There has been no
improper act or omission or to Seller's knowledge alleged improper act or
omission, or material error by the Seller or any prior servicer or any
employees, agent or representative of any of the foregoing, with respect to the
servicing or any of the Mortgage Loans. The Mortgage Loan documents being
delivered to the Purchaser are adequate and sufficient to properly service the
Mortgage Loans in accordance with the standards set forth in the MBS Servicing
Agreements.
(u) Subject to obtaining the approvals referred to in Section 4.02,
the sale, transfer and assignment of the Servicing Rights by the Seller and the
instruments required to be executed by the Seller and delivered in connection
therewith pursuant to this Agreement, Servicing Requirements, or other
contractual provisions, are, or will be as of the Closing Date and Transfer
Date, executed, delivered, valid and enforceable in accordance with their terms,
subject to bankruptcy and insolvency laws and the availability of equitable
remedies and will effectively vest in the Purchaser good title to the Servicing
Rights, free and clear of any and all liens, claims, or encumbrances. Except as
set forth on Schedule C hereto, the Seller has not previously assigned,
transferred or encumbered the Servicing Rights, and any such assignment,
transfer or encumbrance identified on Schedule C hereto shall have been
satisfied as of the Closing Date. There exist no sub-servicing agreements with
respect to the Mortgage Loans. As of the Closing Date, there are no contracts
affecting the Mortgage Loans or the Servicing Rights to which Purchaser is or
will be bound, or caused to exist by the Purchaser nor shall the Seller enter
into any such contracts following the Closing Date without the consent of the
Purchaser, and no other party has any interest in the Servicing Rights or in the
Mortgage Loans except the applicable Investor, the Trustee, the Bond Insurer,
the holder of the Investor securities as such, or otherwise as contemplated
hereby. None of the MBS Servicing Agreements contain any uncustomary, unusual or
burdensome servicing obligations with respect to
-15-
the Servicing Rights or contain provisions which vary from published Investor
standards, and no waivers with respect to any published or unpublished Servicing
Requirements have been obtained which adversely affect the credit quality of any
Mortgage Loan. None of the Mortgage Loans are loans subject to interest rate
subsidies or special escrow arrangements, or loans secured by manufactured
housing that is not considered to be real estate under applicable state law or
mobile homes.
(v) Except as noted in the Mortgage Loan Schedule, all payments
required to be made up to and including the Closing Date for each Mortgage Loan
under the terms of such Mortgage Loan have been made. With regard to each
Mortgage Loan, all accounts for items which are required to be escrowed pursuant
to the terms of such Mortgage Loan, without limitation, all taxes and hazard
insurance premiums, are current and all amounts which previously became due and
owing have been paid, or escrow funds have been established in accordance with
the terms of such Mortgage Loan in amounts which the Seller believes to be
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable or will be required to be paid to
continue operating the related Mortgaged Property in accordance with the terms
of the related Mortgage; and to the Seller's best knowledge there are no other
governmental assessments, water, sewer and municipal charges, leasehold payments
or ground rents of any kind which are required to be escrowed, and any such
items are current and all amounts which previously became due and owing have
been paid. All taxes, leasehold payments, governmental assessments, insurance
premiums, water, sewer, municipal charges and common charges of condominiums or
planned unit developments relating to the Mortgage Loans have been paid by
Seller to the extent of Escrow Payments made by the applicable Borrower with
respect thereto or Advances as required by Servicing Requirements.
(w) All Mortgaged Properties are currently insured pursuant to
insurance policies in conformity with Servicing Requirements.
(x) None of the Servicing Rights are subject to recourse against the
servicer for losses on liquidation of a Mortgage Loan, or otherwise or any third
party expenses such as attorney's fees and restoration expenses, or to
repurchase obligations upon the occurrence of non-payment or other events.
(y) There are not any fees or commissions or any expenses of any
broker, finder or investment banker or anyone else acting in the capacity of a
broker, finder or investment banker for the Seller in connection with the
transactions contemplated hereby which are required to be paid by the Purchaser.
(z) The Seller does not know of any fact (other than facts of a
general economic or political nature) which now or in the future is reasonably
likely to have a material adverse effect on the Seller or the Servicing Rights
which has not been disclosed to the Purchaser herein.
(aa) Each MBS Servicing Agreement delivered to Purchaser on or
before the Closing Date represents a true, correct, and complete copy of the
original as it may have been amended. Each of the MBS Servicing Agreements is in
full force and effect and has not been amended, modified, or altered, except to
the extent that the Purchaser has been notified in writing
-16-
prior to the Closing Date. Seller is not a party to or subject to any agreement,
stipulation, conditional approval, memorandum of understanding, notice of
determination, consent decree, advisory settlement, compromise, litigation, or
other agreement or understanding with any Investor, court or other governmental
agency or body which seeks to modify, interpret or clarify or has the effect of
modifying, interpreting, or clarifying any of the terms of the MBS Servicing
Agreements or otherwise affects Seller's servicing obligations and practices
(including, without limitation, Seller's escrow practices).
(bb) The Seller has performed and shall perform all obligations to
be performed under the related Servicing Requirements, no Event of Default with
respect to the Seller has occurred under the related MBS Servicing Agreement,
and no event has occurred and is continuing which, but for the passage of time
or the giving of notice or both, would constitute with respect to the Seller an
Event of Default under the related MBS Servicing Agreement. Except as set forth
on Schedule B hereto, there has been no occurrence of any event with respect to
the Seller that could obligate the Seller, as servicer, to repurchase any
Mortgage Loans or cause the termination of the Servicing Rights. The Seller and
any predecessor servicer has serviced the Mortgage Loans and has kept and
maintained complete and accurate books and records in connection therewith, all
in accordance with the related Servicing Requirements, the terms of the related
Mortgage Note and applicable law, and the Seller has made all remittances
required to be made by it under the related MBS Servicing Agreement.
(cc) The dollar amount of Advances with respect to the Mortgage
Loans to be provided by the Seller to the Purchaser pursuant to this Agreement
will be true and correct as of the date given. Nothing has come to the attention
of Seller that would lead the Seller to believe that any Advance is not
recoverable pursuant to the related MBS Servicing Agreement.
(dd) This Agreement, the Exhibits hereto, and any statement, report
or other document which has been or will be furnished to the Purchaser by the
Seller, its accountants, officers, employees, auditors, or its attorneys engaged
by it for this transaction, pursuant to this Agreement or in connection with the
transactions contemplated hereby, does not contain any untrue statement of
material fact or omit to state a material fact necessary to make the statement
contained herein or therein not misleading.
Section 3.02 Certain Provisions Relating to the Seller's
Representations and Warranties.
The Seller agrees that the representations and warranties set forth
in Section 3.01 shall survive the sale of the Servicing Rights to the Purchaser,
the Transfer Date, any resale thereof in whole or in part by the Purchaser and
the delivery of each Mortgage File to the Purchaser and shall inure to the
benefit of the Purchaser and its successors and any subsequent holder of the
Servicing Rights or any of them, notwithstanding any qualified endorsement or
Assignment of Mortgage or the examination or lack of examination of any Mortgage
File.
-17-
Section 3.03 Representations and Warranties of the Purchaser.
The Purchaser represents, warrants and covenants to the Seller that,
as of the Closing Date:
(a) The Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. The Purchaser
has all requisite power and authority to own its properties and carry on its
business as and where now being conducted. The Purchaser has all requisite power
and authority to enter into this Agreement, and the agreements to which it is or
will become a party as contemplated by this Agreement, and to carry out the
transactions contemplated hereby.
(b) The execution and delivery by the Purchaser of this Agreement,
and of the agreements to be entered into pursuant hereto, and the consummation
of the transactions contemplated hereby have each been duly and validly
authorized by all necessary action, and this Agreement and such other agreements
constitute valid and legally binding agreements enforceable in accordance with
their respective terms.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate, conflict
with, result in a breach of, constitute a default under or be prohibited by, or
require any additional approval, waiver or consent under the Purchaser's charter
or other agreement relating to its organization or any instrument or agreement
to which it is a party or by which it is bound or any federal or state law, rule
or regulation or any judicial or administrative decree, order, ruling or
regulation applicable to it, or to the Servicing Rights.
(d) There is no litigation or action at law or in equity pending,
or, to its knowledge, threatened against the Purchaser and no proceeding or
investigation of any kind is pending or, to its knowledge, threatened, by any
federal, state or local governmental or administrative body, which could
reasonably be expected to materially affect the Servicing Rights or the
Purchaser's ability to consummate the transactions contemplated hereby.
(e) The Purchaser has no actual knowledge that it is unacceptable to
the Bond Insurer or any Trustee under any MBS Servicing Agreement, other than
the Bond Insurer which has a legal ownership interest in Fairbanks Capital Corp.
-18-
ARTICLE IV
CLOSING DATE AND TRANSFER DATE DELIVERIES
Section 4.01 Documents, Schedules and Exhibits Required with Respect
to the Closing Date.
(a) With respect to the Servicing Rights related to an MBS Servicing
Agreement purchased hereunder, the Seller shall deliver to the Purchaser, or as
otherwise designated by the Purchaser, on the Closing Date or such other date as
shall be specified herein the following documents, in such forms as are agreed
upon and reasonably acceptable to the Purchaser:
(i) Letters reasonably satisfactory to the Purchaser dated the
Closing Date stating the incumbency of any Seller's signatory of all
applicable certificates described in this Section 4.01.
(ii) A Seller's Closing Certificate in the form of Exhibit 2
hereto with a copy of the Mortgage Loan Schedule attached thereto for the
Pooled Mortgage Loans. Such Seller's Closing Certificate shall be
delivered on the Closing Date.
(iii) A written opinion of counsel for the Seller as to the
matters set forth in Exhibit 3 reasonably acceptable to the Purchaser and
Seller.
(iv) An executed Forbearance Agreement.
(v) All of the consents required pursuant to Section 7.02 on
or before the Closing Date.
(vi) Such certificates, opinions of counsel and other
documents as may be reasonably required by any applicable Bond Insurer,
Rating Agency or other party to a MBS Servicing Agreement.
(vii) Such security release certifications, including without
limitation, UCC filings and termination statements as shall be requested
by the Purchaser or which are necessary to evidence the release of any
liens or encumbrances which previously encumbered the Servicing Rights.
(viii) On or prior to the Closing Date, the Purchaser shall
have received the Collection Account Agency Agreement relating to each of
the MBS Servicing Agreements in a form reasonably acceptable to the
Purchaser executed by each of the parties thereto.
(b) On or prior to the Closing Date, the Seller and the Purchaser
shall enter into a residential flow interim servicing agreement with respect to
mortgage loans originated by the Seller following the Closing Date which
agreement shall be mutually agreeable to the Purchaser and the Seller and shall
incorporate the terms set forth in Exhibit 8 hereto.
-19-
Section 4.02 Documents and Schedules Required With Respect to the
Transfer Date.
The Seller shall deliver on the dates specified herein, the
following documents and files to the Purchaser:
(a) The Seller shall deliver to the Purchaser the documents and
files and perform any other obligations specified in the Transfer Instructions
by the dates specified therein.
(b) Seller will pay all costs of preparing and recording Assignments
of Mortgage, if necessary, to the extent required to be paid by the Servicer
pursuant to any MBS Servicing Agreement.
(c) On or prior to the Transfer Date, the Seller shall deliver to
the Purchaser an acknowledgment reasonably acceptable to the Purchaser of any
sub-servicer that the sub-servicer has been terminated as servicer and all costs
associated with such termination have been paid with such exceptions as are
otherwise permitted herein, if applicable.
(d) [Intentionally Omitted].
(e) On or prior to the Transfer Date, the Seller shall have made all
payments of taxes and insurance and other escrow items for which Seller has
received a xxxx or invoice prior to the Transfer Date to the extent escrow is
provided under the related Mortgage Loan documents. The Seller shall reimburse
the Purchaser upon request for any penalties or costs incurred due to
non-payment of tax, or insurance or other escrow items as a result of the
Seller's failure to perform as provided in this subsection (e). Advances of tax,
insurance payments and escrow payments, and advances of principal and interest
shall be reimbursed to the Seller as provided in Section 2.03.
(f) The Seller shall provide to the Purchaser a reasonable time
prior to the Transfer Date, records as may be reasonably requested by the
Purchaser for the Purchaser to review the investor accounting status of the
Mortgage Loans; such records shall include, but, shall not be limited to, the
following: (i) monthly Investor remittance reports for at least the previous six
months or such lesser time if the securities related to an MBS Servicing
Agreement have been outstanding for less than six months, (ii) most recent trial
balance and Pool-to-Security reconciliation, minimum cash or expected principal
and interest and schedule of principal and interest collected, and (iii) records
relating to all Mortgage Loans liquidated during the past six months showing
sales prices, expenses, etc.
(g) Seller shall have furnished the Purchaser with the following
additional information and documents not later than the Transfer Date, except
where otherwise specified:
(1) A wire transfer in an amount equal to the outstanding balances
identified on the mortgage records in full payment of all
funds held or due in the applicable Escrow Accounts and any
unremitted principal or interest net of any amounts permitted
pursuant to subsection (e) herein. These funds must be
received by
-20-
the Transfer Date. The Seller shall exclude from the funds to
be transferred pursuant to this subsection (g) all mortgage
guaranty and Investor securities remittances due for the
period through Transfer Date, payable on the applicable day of
the month following such Transfer Date, and which shall be
paid by Seller;
(2) A copy of the Seller's system trial balance in electronic
format mutually agreed to by the Seller and Purchaser as of
such Transfer Date, which shall include, without limitation,
as to each Mortgage Loan: (i) the Mortgage Loan number, (ii)
the next due date, (iii) the principal balance thereof, (iv)
the escrow balance, and (v) the Monthly Payment, and escrow;
this copy trial balance must be received by the Purchaser by
the fifth Business Day after such Transfer Date;
(3) The Mortgage File on each Mortgage Loan processed and shipped
in compliance with the Transfer Instructions;
(4) Trial balances and pool to Investor security reconciliations
for each Pool for each month for at least the last six months
as reasonably available and to the extent reasonably necessary
to and requested by such the Purchaser, including the month of
transfer and a reconciliation of the over and/or under
collateralization for each Pool and corrections/adjustments
for all under collateralized Pools;
(5) Complete principal and interest, tax, and insurance bank
account reconciliations as of such Transfer Date and the
preceding month;
(6) The loan analysis (including tax and interest statement) for
each Mortgage Loan to the extent such loan analysis is
reasonably necessary to and requested by such the Purchaser;
(7) Foreclosure and bankruptcy files and collection records,
including collection cards, default letters, demand letters,
payment plans and other forbearance agreements, and property
inspections for each Mortgage Loan as required by Servicing
Requirements, which may be delivered in electronic format
agreed to by the Seller and the Purchaser;
(8) Within five (5) days following the Transfer Date, a
certification by an appropriate officer of the Seller to the
effect that the Seller has caused the documents (including,
without limitation, each executed Mortgage and related
Mortgage Note, title policy and mortgage insurance policy,
and/or certificate, as the case may be) held by the Seller's
Custodian to have been delivered to the Purchaser's custodial
bank, including a release certification from the Seller's
custodial bank, and documentation evidencing that such bank
has
-21-
accepted such documents. The Seller shall pay all termination
and delivery fees required by the Seller's Custodians; and
(9) The Seller shall deliver to such the Purchaser a copy of any
available certification executed on each Pool or, if such
certification is not available, the Seller shall deliver to
the Purchaser a status report on a loan-by-loan basis, listing
said missing documentation.
(h) The Seller's counsel shall deliver to the Purchaser letters
dated such Transfer Date indicating that the Purchaser may rely on the opinions
given hereunder on the Closing Date as if given on such Transfer Date.
(i) All records delivered or transferred to the Purchaser shall be
clearly identified, segregated by Pool and in Seller loan number order. All
boxes shall be sequentially labeled and contain a complete listing of Mortgage
Files therein. The Seller shall provide the Purchaser a summary schedule
reflecting Mortgage Files therein and exceptions thereto and the Purchaser shall
sign and return one copy of the summary schedule.
(j) No later than five (5) Business Days after the Transfer Date, a
copy of the Seller's delinquency report showing the due date of the Monthly
Payment and the paid-to date as of such Transfer Date.
(k) No later than five (5) Business Days after the Transfer Date, a
copy of loan payment history and escrow analysis for each Mortgage Loan since
origination in electronic format.
(l) At least fifteen (15) days prior to the Transfer Date, copies of
the Seller's notice of transfer letters to each Borrower and insurer as required
in Section 6.02 hereof. Such notices shall inform the Borrower and insurer to
address all communication and remittances to the address of the Purchaser.
(m) No later than ten (10) Business Days after the Transfer Date,
the Seller's certification that either (1) with respect to Mortgage Loans as to
which the Seller maintains escrows for such items, all real estate and property
taxes have been paid on all related Mortgaged Properties for which such taxes
are payable or the net payment period will expire within thirty (30) days before
or after the Transfer Date, as requested by the applicable the Purchaser or (2)
otherwise, Seller has received no notice of delinquent taxes.
(n) No later than ten (10) Business Days after the Transfer Date,
the Seller's certification that either (1) with respect to Mortgage Loans as to
which the Seller maintains escrows for such items, all Insurance Policy premiums
have been paid on all Mortgaged Properties which premiums are due or will become
due within thirty (30) days before or after the Transfer Date, as requested by
the applicable the Purchaser or (2) otherwise, Seller has received no notice of
delinquent premium payments.
-22-
(o) At least fifteen (15) days prior to the Transfer Date, copies of
notifications prepared by the Seller, in duplicate, addressed to each of the
related insurance companies requesting endorsements to the mortgagee clause to
the Purchaser.
(p) A Seller's Closing Certificate, dated the Transfer Date.
(q) At least fifteen (15) days prior to the Transfer Date, a true
and correct copy of each MBS Servicing Agreement.
(r) No later than ten (10)Business Days after the Transfer Date, the
Seller's certification of the Advances as of the Transfer Date, the amount
thereof to be paid in cash by the Purchaser pursuant to Section 2.03.
(s) A corporate resolution or power of attorney, in form and
substance acceptable to the Purchaser, appointing the Purchaser as
attorney-in-fact for the Seller for the purpose of executing Mortgage Loan
documents and processing and endorsing payments, all as may be reasonable and
appropriate to effectuate the purposes of this Agreement.
Section 4.03 Access to Information.
Upon reasonable prior notice to the Seller, the Seller shall afford
reasonable cooperation to the Purchaser and its counsel, accountants and other
representatives in providing reasonable access during normal business hours
throughout the period prior to the Transfer Date, to the Mortgage Files and all
the Seller's files, books and records relating to the Mortgage Loans, the
Advances and the Servicing Rights; provided, however, that the Seller shall be
entitled to take reasonable and appropriate actions to assure that the Purchaser
maintains, the confidentiality of the names and addresses of the Borrowers under
the Mortgage Loans and all non-public information obtained in such investigation
that could reasonably be construed to be of a confidential or proprietary
nature, and the Seller shall provide the Purchaser with access to and reasonable
cooperation with its officers and employees. The Purchaser and its
representatives and affiliates shall treat as confidential all information
obtained in such investigation and not otherwise in the public domain.
Section 4.04 Transfer Expenses.
The Seller shall pay for all costs relating to transfer of the
Servicing Rights including, without limitation, all costs of insured delivery to
Purchaser of all of the Mortgage Files and Custodial Files to the persons
designated by the Purchaser, all costs of preparing and recording Assignments of
Mortgage as contemplated hereby, all Investor transfer fees required hereunder,
all costs relating to the Seller's computer service transfer, custodial transfer
fees of the Seller's custodian, and all costs related to preparing, obtaining
and delivering such documents as are necessary, including but not limited to,
the Real Estate Settlement Procedures Act and the Xxxxxxxx Xxxxxxxx National
Affordable Housing Act of 1990 and to obtain Investor-required final
certification and recertification with respect to the Pools. The Seller shall at
its expense deliver notices in a form acceptable to the Purchaser and the Seller
to each Borrower regarding the transfer of the related Servicing Rights and
provide a copy of such notices to the Purchaser. The Purchaser shall pay all
costs related to Purchaser's computer
-23-
service transfer. Except as otherwise provided in this Agreement, the Seller and
the Purchaser shall each bear their own expenses incurred in connection with the
transactions contemplated by this Agreement.
Section 4.05 Purchaser to Service Pursuant to MBS Servicing
Agreements.
On the Transfer Date, and subject to the satisfaction or waiver in
all material respects of all of the conditions of the Seller set forth herein,
all of the Seller's rights and obligations with respect to the Servicing Rights
shall be transferred to the Purchaser without the necessity of any further act
or deed on the part of the Seller. From and after the Transfer Date, the
Purchaser shall be responsible for assuring that the Mortgage Loans are serviced
in accordance with the Servicing Requirements and Servicing Standards and shall
have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration that the Purchaser may deem
necessary or desirable, consistent with the terms of this Agreement and the
Servicing Requirements and the Servicing Standards; provided that, the Seller
agrees to perform all Investor reporting requirements attributable to the period
prior to the Transfer Date, whether or not such reports are required to be
provided prior to or after the Closing Date.
Section 4.06 Document Deficiencies.
Following the Closing Date, the Seller agrees to exercise best
efforts to cure (i) the document deficiencies identified on Exhibit 9 hereto
with respect to the Mortgage Loans and (ii) any document deficiencies that arise
following the Closing Date that are not identified on Exhibit 9. The Seller
shall be responsible for all out of pocket costs and expenses incurred in
connection with curing any such document deficiencies. The Seller agrees to
designate sufficient personnel to assist in curing any such document
deficiencies and to cooperate with the Trustees and Custodians in connection
with tracking, identifying and curing same. In the event that the Purchaser
incurs any such out of pocket costs, the Purchaser shall be reimbursed for such
reasonable costs from the Hold Back Amount to the extent not recoverable under
the related MBS Servicing Agreement, and, in the event that the Hold Back Amount
is not sufficient to reimburse the Purchaser for the full amount of such costs,
the Seller shall reimburse such amounts to the Purchaser. In the event that the
Seller fails to cure any document deficiency specified on Exhibit 9 with respect
to any Mortgage Loan within one hundred twenty (120) days following the Transfer
Date, the Seller shall be required to indemnify the Purchaser for any losses
related to the missing documentation as provided in Section 5.01 of this
Agreement.
-24-
ARTICLE REMEDIES
Section 5.01 Seller's Indemnification Obligations.
The Seller shall indemnify, by repurchase or otherwise, and hold the
Purchaser and its successors and assigns (subject to obtaining any required
consents) harmless from, and will reimburse the Purchaser and its successors and
assigns for, all material losses, liabilities, damages, penalties, fines,
forfeitures, deficiencies, claims, judgments or other costs or expenses
(including attorney's fees and related costs) actually incurred by the Purchaser
to the extent that such loss, damage, deficiency, claim or expense results from:
(a) Any non-compliance with Servicing Requirements (other than by
Purchaser between the Closing Date and the Transfer Date) of or defect in
any Mortgage Loan or security backed thereby, existing on the Closing Date
or the Transfer Date, whether or not such defects are subsequently
discovered; provided that, with respect to any prospectus or offering
circular relating thereto, such liability shall be limited to any defect
in any information provided by the Seller;
(b) Acts or omissions of the Seller or other originator or seller or
prior servicers with respect to the Servicing Rights or in servicing any
of the Mortgage Loans occurring prior to the Transfer Date, or otherwise
in breach of the Seller's obligations under this Agreement, or investor
rules, regulations, guides or applicable laws, including, without
limitation, incomplete or erroneous loan or servicing documentation, fraud
by the Seller or prior servicer in the origination of the Mortgage Loan,
improper escrow disbursements, misapplied payments or claims not covered
by insurance;
(c) A material breach of the Seller's representations and warranties
contained in Section 3.01 of this Agreement;
(d) Any recourse obligation owed by the Seller to any Investor with
respect to the servicing of the Mortgage Loans existing as of the Closing
Date, including without limitation REO or foreclosure expenses and third
party expenses, including attorney's fees and restoration expenses; or
(e) Any material reduction or diminution of the value of the
Servicing Rights related to the Seller's failure to maintain the Servicing
Platform described in Section 6.10 and for the costs and expenses related
to such reduction or diminution.
Section 5.02 Purchaser's Obligations.
In the event that the Purchaser breaches any of its representations,
warranties or covenants hereunder or the Servicing Standards and such breach
results in any loss, damage, deficiency, claim or expense of the Seller, then
the Seller shall have the right (subject to any required
-25-
consents) to purchase the Servicing Rights with respect to all of the Mortgage
Loans underlying all of the MBS Servicing Agreements at a purchase price equal
to the product of (i) the unpaid principal balance of the Mortgage Loans as of
the date the Servicing Rights are repurchased, times (ii) the lesser of (A) the
purchase price percentage specified in the Pricing Letter or (B) such percentage
as is mutually agreed upon by the Seller and the Purchaser. In addition, the
Seller shall, upon such repurchase, reimburse the Purchaser for the amount of
any outstanding unreimbursed Advances on the Mortgage Loans.
-26-
ARTICLE VI
ADMINISTRATION OF TRANSFER OF SERVICING
Section 6.01 Interim Servicing.
(a) The Seller and the Purchaser mutually acknowledge that it is
impracticable for the Purchaser immediately to perform the Servicing
Requirements as of the Cut-off Date and that a period of time from the Cut-off
Date to the Transfer Date with respect to each Mortgage Loan (as to any
Servicing Rights and Servicing Requirements, the "Interim Period") may be
required for the Purchaser directly to assume and perform the physical tasks of
such servicing. During the Interim Period, the Seller agrees to interim service
all Mortgage Loans as provided in this Section and in accordance with the
provisions of the related MBS Servicing Agreements as the interim servicer for
the benefit of the Purchaser. Notwithstanding anything in this Agreement to the
contrary, the Seller shall make all remittances and comply with all reporting
requirements set forth in the related MBS Servicing Agreements during the
Interim Period; provided, however, that commencing with the first remittance to
be made to the related Trustee on or after the Cut-off Date, the Purchaser shall
fund all Advances and payments of Prepayment Interest Shortfall Amounts (as
defined in the related MBS Servicing Agreement) required to be made as set forth
in and subject to the provisions of this Section 6.01 and the related financing
facility for such Advances between the Purchaser and the Seller (subject to the
limitation that the Purchaser shall not fund Advances in March, 2001 in an
amount exceeding $12,000,000). During the period from the Closing Date to the
Transfer Date, the Seller shall interim service the Mortgage Loans for the
benefit of the Purchaser on behalf of and as agent and fiduciary of the
Purchaser. The Seller shall maintain a complete set of books and records for the
Servicing Rights which shall be clearly marked to reflect the ownership of such
Servicing Rights by Purchaser as of the Closing Date and the entitlement of the
Purchaser to the Servicing Fees and Ancillary Income as provided herein
following the Cut-off Date. The Purchaser agrees to pay to the Seller an interim
servicing fee equal to $15 per loan per Due Period (as defined in the MBS
Servicing Agreements) during the Interim Period (in each case, pro-rated for any
partial Due Period). The Seller and the Purchaser mutually agree that no later
than five (5) Business Days after the end of each calendar month during the
Interim Period the Seller shall deliver to the Purchaser all Servicing Fees and
Ancillary Income received during the prior Due Period as the Seller would have
been entitled to prior to the Cut-off Date; provided that, the Seller shall be
entitled to retain any investment earnings on any Collection Account,
distribution account or REO account which accrues prior to the Cut-off Date
whether paid prior to or after the Cut-off Date. In lieu of both the Seller and
the Purchaser making a payment pursuant to this Section 6.01, the amounts
required to be paid hereunder may be netted against one another, with only the
net amount being made by the Seller or the Purchaser, as the case may be;
provided that, the Purchaser shall not net from any Advances required to be made
pursuant to this Section 6.01, the amount of any Servicing Fees due the
Purchaser hereunder.
The Seller and the Purchaser shall notify each Bond Insurer and
Trustee thirty (30) days prior to the Transfer Date of the Transfer Date.
(b) During the Interim Period, the Seller shall notify the Purchaser
at least three (3) Business Days prior to the date on which monthly remittances
are to be made to the related
-27-
Trustee of the net amount of Advances required to be remitted under the related
MBS Servicing Agreements and any amounts required to be paid in respect of
Prepayment Interest Shortfall Amounts (the "Net Advance Amount"), with
reasonable and appropriate back-up information or data to support the
determination of such Net Advance Amount, together with information reflecting
amounts to be reimbursed to the Purchaser for prior Advances and other amounts
that may be applied to the Net Advance Amount with respect to any Remittance
Date pursuant to the MBS Servicing Agreements. On or prior to the related
Remittance Date, the Purchaser shall remit directly to the related Trustees the
related Net Advance Amount; provided that, the Prepayment Interest Shortfall
Amounts that are paid by the Purchaser shall not exceed in any month the amount
of the Servicing Fees received by the Purchaser in such month. The Seller shall
permit the Purchaser to review the Seller's servicing records to confirm the
calculations of the Net Advance Amounts described in this Section 6.01(b).
(c) The Seller shall irrevocably direct the related Trustees in
writing, and cause such Trustees to remit directly to the Purchaser and not the
Seller amounts received by such Trustees that represent amounts that are
available to reimburse Advances that were funded by the Purchaser. To the extent
that reimbursement amounts as of the end of the preceding calendar month
relating to Advances funded by the Purchaser are received by the Seller and are
not required to be remitted to the related Trustee pursuant to the MBS Servicing
Agreements, the Seller shall, on or prior to the fifteenth (15th) Business Day
of each calendar month, reimburse the Purchaser for such amounts, together with
reasonable and appropriate back-up information or data to support the
determination of such reimbursement amount.
(d) Notwithstanding any provision of this Agreement to the contrary,
except as provided in Section 6.01 of this Agreement, the Purchaser shall not be
required to make or fund any Advances or make any payments in respect of
Prepayment Interest Shortfall Amounts pursuant to this Agreement or any MBS
Servicing Agreement unless and until the conditions set forth in Section 4.01
have been satisfied.
(e) It is the express intent of the parties hereto that the Seller
shall have no rights whatsoever in respect of any and all reimbursements in
respect of Advances made by the Purchaser pursuant to this Agreement or any MBS
Servicing Agreement. However, in the event that, notwithstanding the intent of
the parties hereto, any rights to reimbursement in respect of Advances made by
the Purchaser hereunder are determined to belong, in whole or in part, to the
Seller, then the Seller hereby unconditionally assigns, transfers and otherwise
conveys to the Purchaser all of its right, title, and interest, in, to and under
such rights to reimbursement in respect to Advances made by the Purchaser,
whether now existing or hereafter created or arising from time to time with
respect thereto until the termination of this Agreement and each MBS Servicing
Agreement, and all monies due and or to become due and all amounts received with
respect thereto and all proceeds (including, without limitation, "proceeds" as
defined in the Uniform Commercial Code) thereof.
Section 6.02 Notice Letters of Transfer.
Prior to the Transfer Date, unless otherwise agreed by the parties,
the Seller shall, at the Seller's expense, notify each Borrower of the transfer
of the Servicing Rights and instruct the Borrower to remit all Monthly Payments
and all tax and insurance notices to the Purchaser after the
-28-
Transfer Date. Such letters shall be mailed on such date and be in such form as
is reasonably acceptable to the Seller and the Purchaser. The Seller shall
exchange copies of the "hello-goodbye" letters with the Purchaser prior to
mailing such letters and shall cooperate on a joint mailing program for
notification to the Borrowers. The Seller shall also, at Seller's expense,
notify any Custodian and insurance companies and/or agents, that the Servicing
Rights are being transferred and instruct such entities to deliver all payments,
notices, and insurance statements to the Purchaser after the Transfer Date. Such
notices shall instruct such entities to deliver, from and after the Transfer
Date, all applicable payments, notices, bills, statements, records, files and
other documents to Purchaser. All such notices sent to hazard, flood,
earthquake, private mortgage guarantee and other insurers shall comply with the
requirements of the applicable master policies and shall instruct such insurers
to change the mortgagee clause to "Ocwen Federal Bank FSB, its successors and
assigns" or as otherwise required under applicable Servicing Requirements.
Seller shall be responsible for the cost of preparing and delivering all notices
described in this Section and shall provide Purchaser with a copy of the form of
each notice used by Seller to comply with this Section.
Section 6.03 Statements.
The Seller shall provide each Borrower with an annual year-end
statement in accordance with the MBS Servicing Agreements, and Internal Revenue
Service or Treasury Department regulations. Such statement shall reflect the
status of the Mortgage Loan up to and including the Transfer Date. The Purchaser
shall not have any responsibility for providing such information for the period
of time the Mortgage Loan was serviced by the Seller.
Section 6.04 Tax Contracts.
The Seller shall cooperate with the Purchaser to accomplish an EDP
tape transfer of any tax contracts that are in effect, and reasonably promptly
following the Transfer Date the Seller shall assign to the Purchaser
"life-of-loan" assignable tax contracts with Fidelity National Tax Service or
another nationally recognized tax contract provider on each Mortgage Loan. The
Seller shall also pay any fees required to transfer the existing transferable
tax service contracts to the Purchaser. In the event that such a "Life-time" tax
contract is not presently in force, not presently assignable to the Purchaser or
not documented with a complete EDP tax record, the Seller agrees to pay all fees
necessary to obtain a tax contract for the related Mortgage Loan.
Section 6.05 Payments and Notices Received After the Transfer Date.
The Seller and the Purchaser acknowledge that, during the sixty (60)
day period after the Transfer Date, all funds received in connection with the
Mortgage Loans, including, but not limited to, tax, insurance, principal,
interest and all other types of payments, including, without limitation,
mortgage guaranty or mortgage insurance payments, insurance loss drafts and tax
refunds, are to be immediately paid over to the Purchaser without offset or
deduction. The Purchaser shall be entitled to the service fees and other
servicing related income on all such payments. During such sixty (60) day period
such funds shall be identified by the Seller's loan numbers and shall be
immediately transferred to the Purchaser at the Seller's expense by overnight
courier, for next Business Day delivery, at the address for notices to the
Purchaser. In addition, Seller shall deliver
-29-
or cause to be delivered to the Purchaser, as promptly as practicable after
receipt by Seller, copies of all correspondence received from any Investor or
any Borrower or otherwise relating to any Mortgage Loans. Following such sixty
(60) day period, all such funds and correspondence shall be returned to the
sender with a letter of explanation a copy of which letter shall be sent to the
Purchaser. The Seller hereby covenants and agrees that it shall maintain such
staff and facilities during such sixty (60) day period that are sufficient to
perform all of such responsibilities.
Section 6.06 Service Bureau Cooperation.
The Seller will cause its service bureau and/or EDP department to
cooperate with the Purchaser, and the Seller will provide a test tape, trial
tape, and an accurate conversion tape containing all history maintained by the
service bureau from the closing date of each MBS Servicing Agreement to the
Transfer Date, Pool and loan information as of the Transfer Date so as to
complete the conversion of all loan, Pool, and security information recorded on
an EDP to EDP basis, or such other basis as may reasonably be requested by
Purchaser, including the information set forth in Section 4.02. Such tapes shall
be provided to Purchaser in accordance with Section 4.02.
Section 6.07 Limitations on Interim Servicing.
From and after the Closing Date, the sole and exclusive ownership of
the Servicing Rights shall vest in the Purchaser. The possession of all Mortgage
Files and other books, records, accounts and funds by the Seller following the
Closing Date is solely in a fiduciary capacity for and at the will of the
Purchaser.
Section 6.08 Custodian Approval.
If required under the applicable agreement, the Seller will use its
best efforts to obtain and deliver to the Purchaser prior to the Transfer Date,
an approval by the Seller's document Custodian(s) reflecting its or their
willingness to continue to perform the custodial activities for the Purchaser.
Such approval shall specify all current prices that the Custodian will charge
the Purchaser for services. The Seller shall pay all fees to the Custodian when
due if the related MBS Servicing Agreement does not provide for such custodial
fees to be paid from collections or other sources and the Purchaser shall have
no liability for such fees. The Seller will facilitate the presentation and
execution of a new custodial agreement or, at the Purchaser's option, the
assignment of any existing agreement between such Custodian and the Purchaser.
The Purchaser shall have the option to retain the Seller's Custodian or
designate a Custodian of its choice. The Purchaser will name its Custodian at
least 30 days prior to the Transfer Date.
Section 6.09 Missing Social Security Number; Forms W-8 or W-9.
The Seller will provide a report satisfactory in form and content to
the Purchaser to substantiate compliance with Internal Revenue Service and other
applicable Treasury Department regulations and requirements applicable to
reporting of interest and obtaining Social Security numbers. The Seller also
agrees to provide the certification of an authorized officer that the Seller has
complied with all Internal Revenue Service and U.S. Treasury Department
requirements for due
-30-
diligence in obtaining and maintaining tax identification numbers for each
Mortgage Loan transferred. In addition to the foregoing, the Seller agrees to
reimburse the Purchaser for any and all penalties incurred because of Internal
Revenue Service and, or, Treasury Department requirements for any missing tax
numbers and forms incurred as a result of infractions prior to the Transfer
Date.
Section 6.10 Servicing Platform.
The term "Servicing Platform" includes the following:
(a) Seller's current office space in Irvine, California;
(b) all of the computer equipment and related accessories and
facilities used as of the Closing Date in connection with the
servicing of the Mortgage Loans, including, but not limited to
the computer hardware required to operate and run the Seller's
imaging software;
(c) all of the computer software, including the imaging software
and all enhancements thereof being operated on the computer
equipment as of the Closing Date in connection with the
servicing of the Mortgage Loans;
(d) sufficient consultants and support staff with respect to the
computer hardware and software to operate the computer system
in the same manner it was operated as of the Closing Date in
connection with the servicing of the Mortgage Loans;
(e) all furniture and fixtures and other equipment used as of the
Closing Date in connection with the servicing of the Mortgage
Loans; and
(f) sufficient number of the Seller's employees to service the
Mortgage Loans in accordance with the requirements of law and
the Servicing Requirements.
The Seller represents and warrants to the Purchaser that the
Servicing Platform is adequate and sufficient for the Purchaser to perform all
of the Purchaser's obligations as servicer under the MBS Servicing Agreements
during the Interim Period.
The Seller acknowledges that a portion of the Purchase Price
represents consideration paid by the Purchaser for the Seller's maintaining the
Servicing Platform during the Interim Period. The obligations and performance of
the Purchaser under this Agreement are conditioned upon and subject to Seller
maintaining the Servicing Platform for the period commencing on the Cut-off Date
and continuing thereafter through and including the Transfer Date. The Purchaser
will receive all servicing revenues from the MBS Servicing Agreement for this
period including without limitation, all Servicing Fees and Ancillary Income in
accordance with Section 6.01. The Seller agrees that the Purchaser shall assume
no obligations or liabilities and shall not become responsible for the
performance or satisfaction of any obligations or liabilities with respect to or
arising out of the Servicing Platform. In the event that the Seller fails to
maintain the Servicing Platform, then, without
-31-
waiving any rights or remedies which the Purchaser may have, the Purchaser shall
assume the Servicing Requirements subject to the terms and conditions set forth
in this Agreement and the Forbearance Agreement if any; provided, however, the
Seller shall indemnify the Purchaser pursuant to Section 5.01 with respect to
any material reduction or diminution of the value of the Servicing Rights and
for the costs and expenses related to curing any servicing deficiencies which
result from such failure to maintain the Servicing Platform. The Purchaser shall
invoice the Seller with respect to any unreimbursed amounts, and the Seller
shall pay such amounts within ten (10) days of receipt of such invoice.
-32-
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.01 Publicity.
As soon as practicable after the execution of this Agreement and the
Closing Date, a joint press release, in such form as mutually agreed by the
parties hereto, shall be issued by the parties hereto. No other publicity
regarding the transactions contemplated by this Agreement shall be made without
the prior written approval of the parties hereto, except as may be required by
applicable law upon the advice of counsel.
Section 7.02 Consents.
The purchase and sale of any Servicing Rights is subject to Seller
obtaining all Bond Insurer Letters, Rating Agency Letters and Trustee Letters
and any other consent or notification letters required pursuant to the MBS
Servicing Agreements at its sole expense. The Seller shall obtain such letters
prior to the Closing Date. The Purchaser shall cooperate with Seller in
obtaining such consent letters and shall timely respond to all reasonable
requests from the Investor concerning the Purchaser and its business operations.
The Seller shall notify the Purchaser in writing immediately upon obtaining such
consent letters, and the Seller shall provide a copy of each such consent letter
to Purchaser.
Section 7.03 Third Party Purchase Option.
The Purchaser and the Seller acknowledge and agree that in
connection with the marketing of certain residuals owned by the Seller which
were issued pursuant to an MBS Servicing Agreement, the Seller may be required
by a third party purchaser of such residuals (the "Third Party Residual
Purchaser") to offer to sell the Servicing Rights related pursuant to such MBS
Servicing Agreement to such Third Party Residual Purchaser.
The Purchaser hereby agrees that, in the event that any Third Party
Residual Purchaser requests the right to purchase the Servicing Rights with
respect to a related MBS Servicing Agreement, the Purchaser shall sell to such
Third Party Residual Purchaser such Servicing Rights subject to any applicable
required consents at a purchase price mutually agreed upon by the Seller and the
Purchaser plus all outstanding unreimbursed Advances pursuant to such MBS
Servicing Agreement.
The purchase option provided pursuant to this Section 7.03 may only
be exercised with respect to the entire pool of Mortgage Loans underlying such
MBS Servicing Agreement; partial exercise is not permitted. Any such sale of
Servicing Rights pursuant to this Section 7.03 shall be made without any
representations, warranties or recourse to the Purchaser, except as to the
Purchaser's right to transfer the Servicing Rights free and clear of any lien or
encumbrance incurred or suffered by it and to assign any representations or
warranties received with respect to the Servicing Rights made by the Seller.
-33-
The purchase option provided pursuant to this Section 7.03 shall be
exercisable only by third parties acting on their own behalf. Under no
circumstances shall the Seller, any affiliate of the Seller or any third party
acting on behalf of the Seller be entitled to exercise the purchase option
provided pursuant to this Section 7.03.
-34-
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment.
This Agreement may be amended from time to time by the Purchaser and
the Seller only by written agreement signed by the Purchaser and the Seller.
Section 8.02 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
Section 8.03 Notices.
All notices or other communications hereunder shall be in writing
and shall be deemed to have been given and received: (a) upon receipt if
delivered personally (unless subject to clause (b)) or if mailed by registered
or certified mail return receipt requested, postage prepaid; (b) (at 5:00 p.m.
local time on the business day following dispatch if sent by a nationally
recognized overnight courier; or (c) upon completion of transmission (which is
confirmed by telephone or by a statement generated by the transmitting machine)
if transmitted by telecopy or other means of facsimile which provided immediate
or near immediate transmission to compatible equipment in the possession of the
recipient, in any case to the parties at the following addresses or telecopy
numbers (or at such other address or telecopy number for a party as will be
specified by like notice):
If to the Purchaser:
Ocwen Federal Bank FSB
The Forum, Suite 1002
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Secretary
Facsimile Number: (000) 000-0000
Confirmation Number: (000) 000-0000
If to the Seller
New Century Mortgage Corporation
00000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Facsimile Number: (000) 000-0000
Confirmation Number: (000) 000-0000
-35-
Section 8.04 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 8.05 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;
(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 without limitation
by reason of enumeration.
Section 8.06 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.
-36-
Section 8.07 Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one instrument. It shall not be necessary in making proof of this
Agreement or any counterpart thereof to produce or account for any other
counterpart.
Section 8.08 Entire Agreement, Successors and Assigns.
Except as otherwise provided herein, this Agreement together with
the Pricing Letter constitute the entire agreement between the parties hereto
and supersedes all rights and prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
This Agreement (A) is in writing, (B) is being executed by the Seller (and any
person claiming an interest under the Seller) contemporaneously with the sale of
the Servicing Rights by the Seller, (C) is approved by either the board of
directors or the loan committee of the Seller and the authority for such
approval is reflected in the minutes of said board or committee, and (D) shall
be, continuously from the time of its execution, an official record of the
Seller. This Agreement shall not be assignable in whole or in part by the
Seller. The Purchaser shall be permitted to assign this Agreement, in whole or
in part. This Agreement and any rights, remedies, obligations or liabilities
under or by reason of the Agreement shall inure to the benefit of and be binding
on the parties hereto or their respective successors and permitted assigns.
Section 8.09 Intention of the Parties
It is the intention of the parties that the Seller is selling, and
the Purchaser is purchasing, only the Servicing Rights to the Mortgage Loans and
not any interest in the Mortgage Loans themselves.
Section 8.10 Brokerage Commissions.
The Purchaser and the Seller represent, each to the other party
hereto, that it has dealt with no broker in connection with the transactions
contemplated by this Agreement who is entitled to a commission or fee payable by
the other party hereunder and each party shall indemnify the other party against
any claims for brokerage commissions based solely on such party's own acts.
Section 8.11 Further Assurances.
From time to time prior to the Transfer Date, the Seller shall
furnish to the Purchaser such reports, information or documentation
supplementary to the information contained in the documents and schedules
delivered pursuant hereto and deliver such reports as may reasonably be
requested by the Purchaser and as are reasonably normal and customary in the
mortgage servicing industry, and the Purchaser and the Seller shall afford
reasonable cooperation each to the other both prior to and following the
Transfer Date.
The Seller and the Purchaser will each, at the request of the other,
execute and deliver to each other all such other instruments or documentation
that either may reasonably request in order
-37-
to perfect the transfer, assignment and delivery to the Purchaser of the
Servicing Rights and the consummation of the agreements hereunder, the
assumption by the Purchaser of the Servicing Requirements, and the release of
the Seller from the Servicing Requirements.
[SIGNATURES BEGIN ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
date first above written.
OCWEN FEDERAL BANK FSB
(Purchaser)
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Title:
------------------------------------
Dated:
------------------------------------
XXXXXXX XXXXXXX
Vice President
NEW CENTURY MORTGAGE CORPORATION
(Seller)
By:
---------------------------------------
Title:
------------------------------------
Dated:
------------------------------------
IN WITNESS WHEREOF, the parties have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
date first above written.
OCWEN FEDERAL BANK FSB
(Purchaser)
By:
---------------------------------------
Title:
------------------------------------
Dated:
------------------------------------
NEW CENTURY MORTGAGE CORPORATION
(Seller)
By: /s/ [ILLEGIBLE]
---------------------------------------
Title: EVP
------------------------------------
Dated: 2/28/01
------------------------------------
SCHEDULE A
MORTGAGE LOAN SCHEDULE
SCHEDULE B
DEFAULTS UNDER MBS SERVICING AGREEMENTS
(a) Seller has been notified by the Bond Insurer that there has been an
Event of Default under the MBS Servicing Agreements listed below giving the Bond
Insurer the right to terminate Seller as Master Servicer. The Bond Insurer has
elected not to exercise this right to terminate, but has specifically reserved
the right to do so at any time it finds expedient.
1. Pooling and Servicing Agreement, dated as of May 1, 1997, among
Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New
Century Mortgage Corporation, as Master Servicer, and U.S. Bank
Trust National Association, f/k/a First Trust National Association,
as Trustee for New Century Asset-Backed Floating Rate Certificates,
Series 1997-NC2.
2. Pooling and Servicing Agreement, dated as of June 1, 1997, among
Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New
Century Mortgage Corporation, as Master Servicer, and U.S. Bank
Trust National Association, f/k/a First Trust National Association,
as Trustee for New Century Asset-Backed Floating Rate Certificates,
Series 1997-NC3.
3. Pooling and Servicing Agreement, dated as of December 1, 1997, among
Financial Asset Securities Corp., as Depositor, New Century Mortgage
Corporation, as Seller and Master Servicer, and U.S. Bank National
Association, d/b/a First Bank National Association, as Trustee for
Asset Backed Pass-Through Certificates, New Century Home Equity Loan
Trust, Series 1997-NC6.
(b) Apart from the items set forth in (a) above, Seller believes it is not
in default of its obligations under any MBS Servicing Agreement. However, Seller
notes and hereby discloses that some ambiguity might exist regarding its
performance of one specific element of those obligations. Specifically, Seller
notes that there could potentially be two competing interpretations of Section
4.03 of the MBS Servicing Agreements regarding the servicer's ability to use
principal prepayments deposited in the Collection Account for principal and
interest Advances owed.
Seller's practice, in accordance with its interpretation of the MBS
Servicing Agreements, has been to use principal prepayments deposited in the
Collection Account to make any needed principal and interest Advances. Auditors
and a bond insurer have been aware of this interpretation and practice and have
expressed no objection to it.
Seller notes, however, that the language in Section 4.03 could potentially
be interpreted to provide that if the Available Distribution Amount (as defined
in the MBS Servicing Agreements) on the Distribution Date (as defined in the MBS
Servicing Agreements) is less than the amount that would have been distributed
had excess funds in the Collection Account not been used to fund principal and
interest Advances in the prior month, the servicer must "replace" such excess
funds used for principal and interest Advances in the prior month, even though
additional prepayments have been deposited into the Collection Account in the
current month and are otherwise available.
SCHEDULE C
ASSIGNMENTS, TRANSFERS OR ENCUMBRANCES OF SERVICING RIGHTS
The Servicing Rights were previously covered by a lien of U.S. Bank
National Association under its Fourth Amended and Restated Credit Agreement, as
amended, with Seller and are subject to the Restated Purchase Agreement, dated
as of July 31, 2000, between U.S. Bank National Association and Seller, as
amended.
EXHIBIT 1
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items:
1. Copy of the original Mortgage Note.
2. Copy of the original recorded Mortgage or Deed of Trust or certified
true copy of the Mortgage submitted for recording if the original
recorded Mortgage has not yet been returned except that, in
Louisiana and Puerto Rico, a true copy thereof, certified by a
Notary, may be substituted and if the Mortgage Loan is evidenced by
a consolidated mortgage and the consolidation was not accomplished
within the body of the most recent Mortgage of record, then a copy
of the original recorded Consolidation Agreement shall be included
as well.
3. A copy of the original Assignment of Mortgage executed by the Seller
pursuant to Servicing Requirements, which assignment shall be in
form and substance acceptable for recording and, if required by
Servicing Requirements, recorded. Subject to the foregoing and to
Servicing Requirements, such assignments may be by blanket
assignments for Mortgage Loans covering Mortgaged Properties
situated within the same county.
4. Copy of the original policy of lender's title insurance.
5. Evidence of all Insurance Policies and Insurance Agreements.
6. Copy of the original of each assumption, extension and modification
agreements.
7. Copy of the original recorded intervening Assignments of Mortgage.
8. Original hazard insurance policy or certificate thereof and, if
required by law, evidence of flood insurance, with extended coverage
of the hazard insurance policy.
9. Residential appraisal.
10. Origination documents:
A. Conventional loan application;
B. Credit Report; and
C. Preliminary Title Report and/or Commitment for Title
Insurance. Copies of easements and/or restrictions and Tax
Search sheet, if applicable;
11. Closing certificates:
A. Executed Truth in Lending statement pursuant to Federal
Reserve Board Regulation Z;
B. Notices pursuant to the Equal Credit Opportunity Act and
Federal Reserve Board Regulation B, as amended;
C. Form HUD-1 (Real Estate Settlement Procedures Act);
D. If a refinance Mortgage, copy of the notice of right to
rescind, signed and dated; and
E. Sale contract/deposit receipt, or escrow instructions, as
required.
12. Other papers and records developed or originated by the Seller or
others, required to document the Mortgage Loan or to service the
Mortgage Loan pursuant to Servicing Requirements.
EXHIBIT 2
FORM OF SELLER'S CLOSING CERTIFICATE
I, ______________________, hereby certify that I am the duly elected
[Vice] President of New Century Mortgage Corporation, a California corporation
(the "Seller") and further as follows:
1. There are no actions, suits or proceedings pending (nor, to my
knowledge, are any actions, suits or proceedings threatened), against or
affecting the Seller which if adversely determined, individually or in the
aggregate, would adversely affect the Seller's obligations under the
Servicing Rights Purchase Agreement dated as of February 28, 2001 between
the Seller and Ocwen Federal Bank FSB (the "Purchase Agreement").
2. Each person who, as an officer or representative of the Seller,
signed the Purchase Agreement and any document delivered prior hereto or
on the date hereof in connection with the purchase described in the
Purchase Agreement was, at the respective times of such signing and
delivery, and is now duly elected or appointed, qualified and acting as
such officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures.
3. Attached hereto is a certified true copy of the authorization of
the execution of the Purchase Agreement, and such authorization has not
been amended, modified, annulled or revoked and is in full force and
effect.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the Seller.
Dated: ______________________, 2001
NEW CENTURY MORTGAGE CORPORATION
By: ______________________________
Name:_____________________________
[Seal] Title: Secretary
I, ________________________, a ________________________ of New Century
Mortgage Corporation, hereby certify that ________________________ is the duly
elected, qualified and acting Secretary of the Seller and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto assigned my name.
Dated: _________________, 2001.
NEW CENTURY MORTGAGE CORPORATION
By: ______________________________
Name:_____________________________
[Seal] Title: Secretary
EXHIBIT 3
FORM OF OPINION OF COUNSEL TO SELLER
(Date)
Ocwen Federal Bank FSB
The Forum, Suite 1002
1675 Palm Beach Xxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Dear Sirs:
We have acted as counsel to New Century Mortgage Corporation, a
California corporation (the "Seller"), with respect to certain matters in
connection with the sale by the Seller of servicing rights (as defined in the)
pursuant to that certain Servicing Rights Purchase Agreement, dated as of
February 28, 2001 (the "Purchase Agreement"), by and between the Seller and
Ocwen Federal Bank FSB, a federally chartered thrift (the "Purchaser"), by and
between Seller and Purchaser. This opinion is being provided to you pursuant to
Section 4.01 of the Purchase Agreement.
Capitalized terms used but not otherwise defined herein shall have
the meanings set forth in the Purchase Agreement.
We have reviewed the Purchase Agreement and such other documents as
we deemed necessary or advisable for purposes of the opinions set forth below.
To the extent that we have deemed appropriate, we have relied upon
representations and certifications of officers of the Seller. We have assumed
the authenticity of all documents submitted to us as originals, the genuineness
of all signatures, the legal capacity of natural persons and the conformity to
the originals of all documents. Based upon the foregoing, we are of the opinion
that:
1. The Seller has the requisite power, authority and legal right to
engage in the transactions contemplated by the Purchase Agreement and to execute
and deliver the Purchase Agreement and to perform and observe the terms and
conditions of such agreement.
2. The Purchase Agreement has been duly authorized, executed and
delivered by the Seller and is the legal, valid and binding obligation of the
Seller enforceable in accordance with its respective terms against the Seller,
subject to bankruptcy, insolvency and other similar laws and to the availability
of equitable remedies.
3. No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, the Purchase
Agreement, or the sale of the Servicing Rights or the consummation of the
transactions contemplated by the Purchase Agreement except as expressly
contemplated by its terms
and except for any Investor approval or consent that is required to be given in
connection with the Purchase Agreement.
4. There is no action, suit, proceeding or investigation pending or,
to the best of our knowledge, threatened against the Seller which in our
judgement, either in any one instance or in the aggregate, would draw into
question the validity of the Purchase Agreement or which would be likely to
impair materially the ability of the Seller to perform under the terms of the
Purchase Agreement.
5. The Assignments of Mortgage are in recordable form.
Very truly yours,
______________________________
EXHIBIT 4
SERVICING DOCUMENTS
[to be provided by Seller no later than the Closing Date]
EXHIBIT 5
COMPUTER TAPE FORMAT
EXHIBIT 6
LIST OF MBS SERVICING AGREEMENTS
1. Pooling and Servicing Agreement, dated as of February 1, 1997, among
Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New Century
Mortgage Corporation, as Master Servicer, and U.S. Bank Trust National
Association, f/k/a First Trust National Association, as Trustee for New
Century Asset-Backed Floating Rate Certificates, Series 1997-NC1.
2. Pooling and Servicing Agreement, dated as of May 1, 1997, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, and U.S. Bank Trust National Association,
f/k/a First Trust National Association, as Trustee for New Century
Asset-Backed Floating Rate Certificates, Series 1997-NC2.
3. Pooling and Servicing Agreement, dated as of June 1, 1997, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, and U.S. Bank Trust National Association,
f/k/a First Trust National Association, as Trustee for New Century
Asset-Backed Floating Rate Certificates, Series 1997-NC3.
4. Pooling and Servicing Agreement, dated as of August 1, 1997, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, and U.S. Bank Trust National Association,
f/k/a First Trust National Association, as Trustee for New Century
Asset-Backed Floating Rate Certificates, Series 1997-NC4, as amended by
Amendment No. 1, dated as of May 15, 1998, among Salomon Brothers Mortgage
Securities VII, Inc., as Depositor, New Century Mortgage Corporation, as
Master Servicer, and U.S. Bank Trust National Association, as Trustee.
5. Pooling and Servicing Agreement, dated as of September 1, 1997, among
Financial Asset Securities Corp., as Depositor, New Century Mortgage
Corporation, as Seller and Master Servicer, and U.S. Bank Trust National
Association, f/k/a First Trust National Association, as Trustee for Asset
Backed Pass-Through Certificates, New Century Home Equity Loan Trust,
Series 1997-NC5, as amended by Amendment No. 1, dated as of May 15, 1998,
among Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New
Century Mortgage Corporation, as Master Servicer, and U.S. Bank Trust
National Association, as Trustee.
6. Pooling and Servicing Agreement, dated as of November 1, 1997, among
Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New Century
Mortgage Corporation, as Master Servicer, and U.S. Bank National
Association, as Trustee for New Century Asset-Backed Floating Rate
Certificates, Series 1997-NC5.
7. Pooling and Servicing Agreement, dated as of December 1, 1997, among
Financial Asset Securities Corp., as Depositor, New Century Mortgage
Corporation, as Seller and Master Servicer, and U.S. Bank National
Association, d/b/a First Bank National Association, as Trustee for Asset
Backed Pass-Through Certificates, New Century Home Equity Loan Trust,
Series 1997-NC6.
8. Pooling and Servicing Agreement, dated as of March 1, 1998, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, and U.S. Bank National Association, as
Trustee for New Century Asset-Backed Floating Rate Certificates, Series
1998-NC1.
9. Pooling and Servicing Agreement, dated as of May 1, 1998, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, and U.S. Bank National Association, as
Trustee for Asset-Backed Floating Rate Certificates, Series 1998-NC2.
10. Pooling and Servicing Agreement, dated as of June 1, 1998, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, and U.S. Bank National Association, as
Trustee for New Century Asset-Backed Certificates, Series 1998-NC3.
11. Pooling and Servicing Agreement, dated as of September 1, 1998, among
Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New Century
Mortgage Corporation, as Master Servicer, and U.S. Bank National
Association, as Trustee for New Century Asset-Backed Floating Rate
Certificates, Series 1998-NC4.
12. Pooling and Servicing Agreement, dated as of September 1, 1998, among
Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New Century
Mortgage Corporation, as Master Servicer, and U.S. Bank National
Association, as Trustee for New Century Asset-Backed Floating Rate
Certificates, Series 1998-NC6.
13. Pooling and Servicing Agreement, dated as of December 1, 1998, among
Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New Century
Mortgage Corporation, as Master Servicer and Servicer, Option One Mortgage
Corporation as Servicer, Firstar Bank Milwaukee, N.A., as Trustee and U.S.
Bank National Association, as Trust Administrator for Mortgage
Pass-Through Certificates, Series 1998-NC7.
14. Pooling and Servicing Agreement, dated as of March 1, 1999, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, Firstar Bank Milwaukee, N.A., as Trustee
and U.S. Bank National Association, as Trust Administrator for Mortgage
Pass-Through Certificates, Series 1999-NC1.
15. Pooling and Servicing Agreement, dated as of March 1, 1999, among Salomon
Brothers Mortgage securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, Firstar Bank Milwaukee, N.A., as Trustee
and U.S. Bank National Association, as Trust Administrator for Floating
Rate Mortgage Pass-Through Certificates, Series 1999-NC2.
16. Pooling and Servicing Agreement, dated as of April 1, 1999, among Salomon
Brothers Mortgage securities VII, Inc., as Depositor, Ameriquest Mortgage
Company, Long Beach Mortgage Company, New Century Mortgage Corporation and
Ocwen Federal Bank FSB, as Servicers, and Norwest Bank Minnesota, National
Association., as Trustee for Floating Rate Mortgage Pass-Through
Certificates, Series 1999-3.
17. Pooling and Servicing Agreement, dated as of June 1, 1999, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, Firstar Bank Milwaukee, N.A., as Trustee
and U.S. Bank National Association, as Trust Administrator for Floating
Rate Mortgage Pass-Through Certificates, Series 1999-NC3.
18. Pooling and Servicing Agreement, dated as of June 1, 1999, among Financial
Asset Securities Corp., as Depositor, New Century Mortgage Corporation, as
Servicer, NC Capital Corporation as Seller, Firstar Bank Milwaukee, N.A.,
as Trustee and U.S. Bank National Association, as Trust Administrator for
New Century Home Equity Loan Trust, Series 1999-NCA.
19. Pooling and Servicing Agreement, dated as of August 1, 1999, among Salomon
Brothers Mortgage Securities VII, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, Firstar Bank, N.A., as Trustee and U.S.
Bank National Association, as Trust Administrator for Floating Rate
Mortgage Pass-Through Certificates, Series 1999-NC4.
20. Pooling and Servicing Agreement, dated as of September 1, 1999, among New
Century Mortgage Securities, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, Firstar Bank Milwaukee, N.A., as Trustee
and U.S. Bank National Association, as Trust Administrator for New Century
Home Equity Loan Trust, Series 1999-NCB.
21. Pooling and Servicing Agreement, dated as of December 1, 1999, among
Salomon Brothers Mortgage Securities VII, Inc., as Depositor, New Century
Mortgage Corporation, as Master Servicer, Firstar Bank, N.A., as Trustee
and U.S. Bank National Association, as Trust Administrator for Floating
Rate Mortgage Pass-Through Certificates, Series 1999-NC5.
22. Pooling and Servicing Agreement, dated as of December 1, 1999, among New
Century Mortgage Securities, Inc., as Depositor, New Century Mortgage
Corporation, as Servicer, NC Capital Corporation as Seller, Firstar Bank,
N.A., as Trustee and U.S. Bank National Association, as Trust
Administrator for New Century Home Equity Loan Trust, Series 1999-NCD.
23. Pooling and Servicing Agreement, dated as of March 1, 2000, among New
Century Mortgage Securities, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, Firstar Bank, N.A., as Trustee and U.S.
Bank National Association, as Trust Administrator for New Century Home
Equity Loan Trust, Series 2000-NC1.
24. Pooling and Servicing Agreement, dated as of June 1, 2000, among New
Century Mortgage Securities, Inc., as Depositor, New Century Mortgage
Corporation, as Master Servicer, Firstar Bank, N.A., as Trustee and U.S.
Bank National Association, as Trust Administrator for New Century Home
Equity Loan Trust, Series 2000-NCA, as amended by Amendment No. 1 dated as
of July 31, 2000 and Amendment No. 2 dated as of September 15, 2000, each
among New Century Mortgage Securities, Inc., as Depositor, New Century
Mortgage Corporation, as Master Servicer, Firstar Bank, N.A., as Trustee
and U.S. Bank National Association, as Trust Administrator.
25. Pooling and Servicing Agreement, dated as of June 1, 2000, among Credit
Suisse First Boston Mortgage Securities Corp., as Depositor, New Century
Mortgage Corporation and Option One Mortgage Corporation, as Master
Servicers, U.S. Bank National Association, as Trust Administrator and
National City Bank, as Trustee for Home Equity Loan Pass-Through
Certificates, Series 2000-HE1.
EXHIBIT 7
FORM OF PRICING LETTER
Ocwen Federal Bank FSB
The Forum, Suite 1002
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
[Date]
New Century Mortgage Corporation
00000 Xxx Xxxxxx Xxxxxx,
Xxxxxxxxxx 00000
Re: Servicing Rights Purchase Agreement (the "Agreement") dated as
of February 28, 2001, between Ocwen Federal Bank FSB and New
Century Mortgage Corporation
Ladies and Gentlemen:
This letter agreement between New Century Mortgage Corporation (the
"Seller") and Ocwen Federal Bank FSB (the "Purchaser") is made pursuant to the
terms and conditions of that certain Servicing Rights Purchase Agreement (the
"Agreement") dated as of February 28, 2001, between the Seller and the
Purchaser. Capitalized terms used but not defined herein shall have the meanings
set forth in the Agreement.
The purchase price (the "Purchase Price") with respect to each Pool
shall be equal to the product of (i) the purchase price percentage set forth on
Exhibit A attached hereto times (ii) the aggregate unpaid principal balances of
the Mortgage Loans which are subject to such Pool as of the Cut-off Date.
The rights granted hereunder shall be cumulative with the rights
provided under the Agreement and shall inure to the benefit of the Purchaser and
its successors and assigns. This letter agreement shall survive the closing of
the transaction and shall not be merged with the Agreement or any other
agreement, and shall be independently enforceable by the parties hereto. This
letter agreement may be signed in any number of counterparts, each of which
shall be deemed to be an original, but taken together, shall constitute a single
document.
Please acknowledge your agreement with the foregoing by signing and
returning the enclosed copy of this letter to the undersigned.
Very truly yours,
OCWEN FEDERAL BANK FSB
By:___________________________________
Name:
Title:
Acknowledged and Agreed:
NEW CENTURY MORTGAGE CORPORATION
By:___________________________________
Name:
Title:
EXHIBIT 8
SUMMARY OF TERMS AND CONDITIONS FOR INTERIM SERVICING AGREEMENT
[Intentionally Omitted]
EXHIBIT 9
DOCUMENT DEFICIENCY LIST
[to be provided by Seller no later than the Closing Date]
EXHIBIT 10
COLLECTION ACCOUNT AGENCY AGREEMENT
This COLLECTION ACCOUNT AGENCY AGREEMENT (this "Agreement") is made
as of ___________ __, 2001 and is executed by and among NEW CENTURY MORTGAGE
CORPORATION, a California corporation (the "Seller"), OCWEN FEDERAL BANK FSB, a
federally chartered savings bank (the "Purchaser") and
______________________________ ("Depository").
PRELIMINARY STATEMENT
The Seller presently services the residential mortgage loans and
related mortgaged property (collectively, the "Mortgage Loans") that are subject
to each of the MBS Servicing Agreements identified on Exhibit A hereto. Each MBS
Servicing Agreement requires the Seller to establish and maintain a segregated
account (the "Collection Account") for the benefit of the Certificateholders
pursuant each such MBS Servicing Agreement. Each Collection Account is presently
maintained at ____________________ (the "Depository") and is identified by
account name and account number on Exhibit A hereto. The Seller and the
Purchaser contemporaneously with the execution and delivery of this Agreement
have entered into the Purchase Agreement, pursuant to which the Seller shall
subservice the Mortgage Loans for the Purchaser during the Interim Period (as
defined in the Purchase Agreement) and the Seller shall act as agent for the
Purchaser in respect of the interim servicing of the Mortgage Loans. The parties
hereto desire to agree that during the Interim Period each Collection Account
shall be under the control and direction of the Purchaser to the extent control
or direction is provided to the Seller in the applicable MBS Servicing Agreement
(subject to the Trustee' rights therein), the Seller shall be acting solely as
agent for the Purchaser in respect of the Collection Account and that no
Collection Account shall be in the name of the Seller, the Purchaser or any
party other than the applicable Trustee under the MBS Servicing Agreement.
In consideration of the mutual agreements hereinafter set forth, the
parties hereto agree, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, as follows:
ARTICLE I
Section 1.01. Defined Terms. Capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Purchase Agreement,
and if not defined therein, then in the MBS Servicing Agreements.
Whenever used in this Agreement, the following words and phrases
shall have the following meanings specified in this Article:
"Agreement": This Collection Account Agency Agreement, including all
schedules, exhibits and supplements hereto and amendments hereof.
"Collection Account": Each "Collection Account" identified on
Exhibit A hereto.
"Closing Date": __________ __, 2001 or such other date mutually
agreed upon by the parties hereto.
"MBS Servicing Agreement": Each of the Pooling and Servicing
Agreements identified on Exhibit A hereto pursuant to which the Mortgage Loans
are serviced.
"Purchase Agreement" The Servicing Rights Purchase Agreement by and
between the Seller and the Purchaser, dated as of February 28, 2001, including
all schedules, exhibits and supplements thereto and amendments thereof.
"Purchaser": Ocwen Federal Bank FSB, a federal savings bank.
"Seller": New Century Mortgage Corporation, a California
corporation.
"Trustee": With respect to each MBS Servicing Agreement, the entity
identified as the "trustee" therein, or any successor trustee thereunder.
ARTICLE II
STATUS OF EACH COLLECTION ACCOUNT DURING THE INTERIM PERIOD
Section 2.01. Irrevocable Instructions to Depository relating to the
Collection Accounts.
The Seller hereby irrevocably instructs Depository that during the
Interim Period each Collection Account shall be under the control and direction
of the Purchaser to the extent control or direction is provided to the Seller in
the applicable MBS Servicing Agreement (subject to the Trustee' rights therein),
the Seller shall be acting solely as agent for the Purchaser in respect of the
Collection Account and that no Collection Account shall be in the name of the
Seller, the Purchaser or any party other than the applicable Trustee under the
MBS Servicing Agreement. The Seller acknowledges and agrees that the Purchaser
may terminate the Seller as its agent in respect of each or any Collection
Account at any time, with or without cause. The Seller covenants and agrees that
it shall not establish any other "Collection Accounts" with respect to the MBS
Servicing Agreements without the prior written consent of the Purchaser.
Section 2.02. Acknowledgment of Depository.
Depository hereby confirms (a) the existence of each of the
Collection Accounts, which are maintained at the Depository, and (b) the account
number and name of each Collection Account as set forth on Exhibit A annexed
hereto. Depository hereby acknowledges the instructions contained in Section
2.01 of this Agreement, and hereby acknowledges that during the Interim Period
each Collection Account shall be under the control and direction of the
Purchaser to the extent control or direction is provided to the Seller in the
applicable MBS Servicing Agreement (subject to the Trustee's rights therein),
the Seller shall be acting solely as agent for the Purchaser in respect of the
Collection Account and that no Collection Account shall be in the name of the
Seller, the Purchaser or any party other than the applicable Trustee under the
MBS Servicing Agreement. Depository also hereby acknowledges that upon receipt
of written notice from the Purchaser that it has terminated the Seller as its
agent, Depository shall thereafter deal only with the Purchaser or its designee
in respect of each Collection Account. Depository shall be fully protected in
acting upon
2
any instrument, certificate or paper reasonably believed to be genuine and
executed by the proper persons at the Seller, the Purchaser, the Trustee or the
Bond Insurer.
Section 2.03. Effect of Non-Sale of Servicing Rights.
The Purchaser agrees that if for any reason it does not purchase the
Servicing Rights with respect to the related MBS Servicing Agreements, that
control of such Collection Accounts shall revert back to the Seller or its
successor.
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.01. Amendment.
This Agreement may be amended from time to time by the parties
hereto only by written agreement signed by the such persons, and with the prior
written consent of the applicable Certificate Insurer.
Section 3.02. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
Section 3.03. Notices.
All notices or other communications hereunder shall be in writing
and shall be deemed to have been given and received: (a) upon receipt if
delivered personally (unless subject to clause (b)) or if mailed by registered
or certified mail return receipt requested, postage prepaid three (3) Business
Days after deposit in the U.S. Mail; (b) (at 5:00 p.m. local time on the
business day following dispatch if sent by a nationally recognized overnight
courier); or (c) upon completion of transmission (which is confirmed by
telephone) if transmitted by telecopy or other means of facsimile which provided
immediate or near immediate transmission to compatible equipment in the
possession of the recipient, in any case to the parties at the addresses or
telecopy numbers (or at such other address or telecopy number for a party as
will be specified by like notice) identified in the related MBS Servicing
Agreement or the Purchase Agreement.
Section 3.04. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 3.05. Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one instrument. It shall
3
not be necessary in making proof of this Agreement or any counterpart thereof to
produce or account for any other counterpart.
Section 3.06. Entire Agreement, Successors and Assigns.
Except as otherwise provided herein, this Agreement constitutes the
entire agreement between the parties hereto and supersedes all rights and prior
agreements and understandings, oral and written, between the parties hereto with
respect to the subject matter hereof. This Agreement and any rights, remedies,
obligations or liabilities under or by reason of the Agreement shall inure to
the benefit of and be binding on the parties hereto or their respective
successors and permitted assigns.
[SIGNATURES BEGIN ON NEXT PAGE]
4
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first above written.
OCWEN FEDERAL BANK FSB
(Purchaser)
By:___________________________________
Name:_________________________________
Title:________________________________
NEW CENTURY MORTGAGE CORPORATION
(Seller)
By:___________________________________
Name:_________________________________
Title:________________________________
__________________________
By:___________________________________
Name:_________________________________
Title:________________________________
ACKNOWLEDGED AND AGREED:
[TRUSTEE]
By:___________________________________
Name:_________________________________
Title:________________________________
EXHIBIT A
List of MBS Servicing Agreements and Collection Accounts
5
EXHIBIT 11
SERVICING STANDARDS
Subject to the ramp-up time set forth in paragraph F below, the compliance
calculations set forth in paragraph G below and the cure periods set forth in
paragraph H below, the following servicing performance standards (the
"Performance Standards") shall be applicable to Purchaser:
A. Outbound Calling and Collection Calls. As further described below,
telephone calls to borrowers are to be made by Purchaser according to the
following schedule relating to Mortgage Loans for which bankruptcy or
foreclosure actions have not been commenced:
1. Welcome Calls: At least three attempts during the first 30 days
following the Transfer Date.(1)
2. Collection Calls, 5th through the 18th day of the month: At least
one attempt every other Business Day at a 25% Right Party Contact
rate.(1)2(3)
3. Collection Calls, After the 18th day of month: At least two attempts
every other business day at a 25% Right Party Contact rate.(1)(2)3
A further explanation of the Purchaser's Calling Program is as follows:
Welcome Calls. Welcome calls will be made regardless of the borrower's
delinquency status. However, if a borrower is delinquent in the first month
following the Transfer Date, the Welcome Call will be made as part of the
calling programs described below for Collection Calls.
Collection Calls - 5th through the 18th day of the Month. These calls are
made for all Mortgage Loans that are past due between the 5th and 18th day of
the month, except for loans that are screened out from such calls for reasons
including, but not limited to: bankruptcies, interim payments in the first 30
days after transfer, loans for which the historical average payment date is
before the 18th of the month and loans for which borrowers have requested in
writing that Purchaser not contact them.
Collection Calls - After the 18th Day of the Month but Not Yet in
Foreclosure. These calls are made for all Mortgage Loans that are delinquent
after the 18th day of the month, except for loans that are screened out from
such calls for reasons including, but not limited to: bankruptcies, loans in
foreclosure and loans for which borrowers have requested in writing that
Purchaser not contact them.
B. Written Correspondence. Purchaser will prepare and deliver the following
written correspondence:
1. Early Late Notices: Purchaser will mail a late notice to all
borrowers once they are 5 days past their due date, except for the
following loans that are screened out for such written
----------
(1) An "attempt" shall include, at a minimum, an actual dialing of an outbound
call to the borrower's telephone number.
(2) Once a Right Party Contact has been made, calls will cease for up to 7
days. For purposes of defining "Business Day", for the Performance
Standards Fridays will be deemed to include Friday, Saturday and Sunday.
(3) "Right Party Contact" means contact with an obligor (a signer of the
Mortgage Note), or, where applicable, the obligor's legal guardian or
attorney-in-fact with respect to the loan.
2
correspondence for reasons including, but not limited to:
bankruptcies, interim payments in the first 30 days after transfer
and loans for which the historical average payment date is before
the 18th day of delinquency.
2 Letter of Intent: Purchaser will mail a letter of intent to
foreclose on the 20th day of delinquency.
3. Demands: When applicable, Purchaser will send a demand letter via
certified mail on or about the 35th day of delinquency.
C. Foreclosure Timelines.
1. For Mortgage Loans in foreclosure, Purchaser will, subject to
paragraph 2 below, not exceed 105% of the following Xxxxxxx Mac
foreclosure timelines measured in the aggregate on a rolling three
month weighted average basis, by loan count across all states. These
timelines may be amended from time to time as Xxxxxxx Mac amends its
published timelines.
Foreclosure Timelines
State Days to Foreclosure State Days to Foreclosure
----- ------------------- ----- -------------------
AK 136 MT 202
AL 75 NC 119
AR 116 ND 150
AZ 000 XX 000
XX 126 NH 78
CO 104 NJ 274
CT 176 NM 192
DC 91 NV 000
XX 000 XX 336(1)
FL 151 OH 252
GA 67 OK 217
HI 167 OR 173
IA 212 PA 282
ID 187 PR 375
IL 287 RI 83
IN 253 SC 189
KS 180 SD 203
KY 194 TN 72
LA 216 TX 60
MA 83 UT 164
MD 47 VA 71
ME 330 VT 357
MI 75 WA 156
MN 100 WI 310
MO 77 WV 61
MS 85 WY 93
(1) For New York City 425 days
2. Excluded from the calculation in Paragraph 1 are Mortgage Loans for
which there is not sufficient documentation in the file for
commencement or continuation of foreclosure
3
activities as well as Xxxxxxx Mac allowable hold times. Purchaser
will deliver to the Servicer a list of Mortgage Loans for which
necessary documentation is missing on a monthly basis. Additionally,
on or before the Transfer Date Seller will provide Purchaser with,
or cause Purchaser to be provided with, a list of Mortgage Loans
with missing documentation. Upon the receipt of the documentation,
the applicable loans will be included in the foreclosure timeline
calculation beginning at that time.
D. Pre-foreclosure Resolution Rate
1. A "Pre-foreclosure Resolution" will be obtained for at least 55% of
the Mortgage Loans (by number of Mortgage Loans) for which
foreclosure actions have commenced (a "Defaulted Mortgage Loan"),
measured on a rolling three month average basis.
2. A "Pre-foreclosure Resolution" shall mean any of the following:
i. Full reinstatement - means any Defaulted Mortgage Loan for
which the borrower brings the Mortgage Loan back to a
contractually current status either through a lump sum payment
or otherwise consistent with the terms of the related Pooling
and Servicing Agreement and has made three consecutive timely
payments subsequent to bringing such Mortgage Loan's status
current.
ii. Full payoff - means any Defaulted Mortgage Loan which is paid
in full and such payment in full is received by Purchaser in
full satisfaction of the indebtedness owed under the
applicable Mortgage Note.
iii. Shortfall payoff - means a Defaulted Mortgage Loan for which a
final payment in an amount less than the indebtedness owed
under the applicable Mortgage Note is made consistent with the
terms of the related Pooling and Servicing Agreement and such
payment is received by Purchaser in full satisfaction of such
indebtedness.
iv. Deed-in-Lieu of Foreclosure - means a Defaulted Mortgage Loan
for which title to the Mortgaged Property is taken back by
Purchaser through deed in lieu of foreclosure and the
resulting REO Property is liquidated consistent with the terms
of the related Pooling and Servicing Agreement.
v. Modification (subject to REMIC restrictions) - means a
Defaulted Mortgage Loan which is modified in a manner
consistent with the related Pooling and Servicing Agreement
and for which the Borrower has made three consecutive payments
consistent with the terms of such Mortgage Loan as so
modified.
vi. Forbearance Plan - means a Defaulted Mortgage Loan for which a
borrower has made three consecutive payments in accordance
with a forbearance plan entered into by the borrower.
vii. Take-out at Foreclosure Sale - means the Mortgaged Property
related to a Defaulted Mortgage Loan that is purchased at a
foreclosure sale by a party other than Purchaser (or by
Purchaser on behalf of the owner of the loan) in a manner
consistent with the related Pooling and Servicing Agreement.
E. REO Sales
4
1. With respect to those REO Properties that are being managed by the
Purchaser, are not in eviction status and have a marketable title,
Purchaser will sell at least 12.5% of such REO Properties (by number
of Mortgage Loans) on a monthly basis and obtain "average net
proceeds" of at least 87% of the low market value reflected in the
applicable broker's indication of value, in each case measured on a
rolling 3 month average basis.
2 "Average net proceeds" - means proceeds from sale after brokerage
costs and closing costs.
F. Ramp-up Time
Purchaser shall endeavor to meet the Performance Standards contained
herein as soon as possible after the Transfer Date, but shall not be considered
to be in default under the [______] Agreement unless it fails a performance
standard starting during the applicable period reflected in the table below. For
those performance standards measured on an average or weighted average
three-month rolling basis, Purchaser shall not be considered in default under
the [_______] Agreement unless it fails such performance standard after
completion of the applicable three-month period.
Ramp-Up Periods
Performance Standard Applies first 90 Days Applies After 90 Days
-------------------- --------------------- ---------------------
Welcome Call Attempts Yes N/A
1-18 Day Call Attempts Yes Yes
1-18 Day Right Party Hits No Yes
18+ Day Call Attempts Yes Yes
18+ Day Right Party Hits No Yes
Written Correspondence (All) Yes Yes
Pre-foreclosure Resolution Rate Yes Yes
Foreclosure Timelines No Yes
REO Liquidation Rate No Yes
REO Proceeds Yes Yes
G. Compliance Calculations
For calculations of compliance of the Performance Standards set forth in
paragraphs A and B, the Purchaser will be deemed to be in compliance of the
standards if the Purchaser is meeting the applicable standard in at least 90% of
the cases.
H. Cure Periods
If the Purchaser is not in compliance with the Performance Standards and
notice is given by [______], then the Purchaser will have 30 days to cure such
breach. After the 30 day cure period, if the Purchaser is now meeting the
applicable standard subject to the compliance calculation, then the Purchaser
will be deemed to be in full compliance.
5
