Exhibit 99.10(c)
EXECUTION COPY
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
Purchaser,
WACHOVIA MORTGAGE CORPORATION
Seller
SELLER'S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of September 1, 2004
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................2
Section 1.01. Defined Terms..............................................2
ARTICLE II SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL
AGREEMENT; DELIVERY OF MORTGAGE LOAN DOCUMENTS............16
Section 2.01. Agreement to Purchase.....................................16
Section 2.02. Purchase Price............................................17
Section 2.03. Servicing of Mortgage Loans...............................17
Section 2.04. Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files............................18
Section 2.05. Books and Records.........................................18
Section 2.06. Transfer of Mortgage Loans................................19
Section 2.07. Delivery of Mortgage Loan Documents.......................19
Section 2.08. Quality Control Procedures................................20
Section 2.09. Closing...................................................20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE;
REVIEW OF MORTGAGE LOANS..................................21
Section 3.01. Representations and Warranties of the Seller..............21
Section 3.02. Representations and Warranties as to Individual
Mortgage Loans............................................23
Section 3.03. Repurchase; Substitution..................................36
Section 3.04. Repurchase of Mortgage Loans With First Payment
Defaults..................................................38
Section 3.05. Purchase Price Protection.................................38
ARTICLE IV ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS...............39
Section 4.01. The Seller to Act as Servicer.............................39
Section 4.02. Collection of Mortgage Loan Payments......................40
Section 4.03. Realization Upon Defaulted Mortgage Loans.................41
Section 4.04. Establishment of Custodial Accounts; Deposits in
Custodial Accounts........................................42
Section 4.05. Permitted Withdrawals From the Custodial Account..........43
Section 4.06. Establishment of Escrow Accounts; Deposits in
Accounts..................................................44
Section 4.07. Permitted Withdrawals From the Escrow Account.............45
i
Section 4.08. Payment of Taxes, Insurance and Charges; Maintenance
of Primary Mortgage Insurance; Collections Thereunder.....46
Section 4.09. Transfer of Accounts......................................47
Section 4.10. Maintenance of Hazard Insurance...........................47
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy.......48
Section 4.12. Maintenance of Fidelity Bond and Errors and Omissions
Insurance.................................................49
Section 4.13. Title, Management and Disposition of REO Property.........49
Section 4.14. Notification of Maturity Date.............................50
ARTICLE V PAYMENTS TO THE PURCHASER.........................................50
Section 5.01. Distributions.............................................50
Section 5.02. Statements to the Purchaser...............................51
Section 5.03. Monthly Advances by the Seller............................52
Section 5.04. Liquidation Reports.......................................52
ARTICLE VI GENERAL SERVICING PROCEDURES.....................................53
Section 6.01. Assumption Agreements.....................................53
Section 6.02. Satisfaction of Mortgages and Release of Mortgage
Files.....................................................54
Section 6.03. Servicing Compensation....................................55
Section 6.04. Annual Statement as to Compliance.........................55
Section 6.05. Annual Independent Certified Public Accountants'
Servicing Report..........................................55
Section 6.06. Purchaser's Right to Examine Seller Records...............56
Section 6.07. Seller Shall Provide Information as Reasonably
Required..................................................56
ARTICLE VII THE SELLER......................................................57
Section 7.01. Indemnification; Third Party Claims.......................57
Section 7.02. Merger or Consolidation of the Seller.....................57
Section 7.03. Limitation on Liability of the Seller and Others..........58
Section 7.04. Seller Not to Resign......................................58
Section 7.05. No Transfer of Servicing..................................58
ARTICLE VIII DEFAULT........................................................59
Section 8.01. Events of Default.........................................59
Section 8.02. Waiver of Defaults........................................61
ARTICLE IX TERMINATION......................................................61
ii
Section 9.01. Termination...............................................61
ARTICLE X RECONSTITUTION OF MORTGAGE LOANS..................................61
Section 10.01. Reconstitution of Mortgage Loans..........................61
ARTICLE XI MISCELLANEOUS PROVISIONS.........................................64
Section 11.01. Successor to the Seller...................................64
Section 11.02. Amendment.................................................64
Section 11.03. Recordation of Agreement..................................65
Section 11.04. Governing Law.............................................65
Section 11.05. Notices...................................................65
Section 11.06. Severability of Provisions................................66
Section 11.07. Exhibits..................................................67
Section 11.08. General Interpretive Principles...........................67
Section 11.09. Reproduction of Documents.................................67
Section 11.10. Confidentiality of Information............................68
Section 11.11. Recordation of Assignments of Mortgage....................68
Section 11.12. Assignment by Purchaser...................................68
Section 11.13. No Partnership............................................69
Section 11.14. Execution; Successors and Assigns.........................69
Section 11.15. Entire Agreement..........................................69
Section 11.16. No Solicitation...........................................69
Section 11.17. Costs.....................................................70
Section 11.18. Protection of Mortgagor Personal Information..............70
EXHIBITS
A-1 Contents of Mortgage File
A-2 Contents of Servicing File
B Form of Custodial Account Letter Agreement
C Form of Escrow Account Letter Agreement
D Form of Assignment, Assumption and Recognition Agreement
E Form of Assignment and Conveyance
F Request for Release of Documents and Receipt
G Form of S-50Y Report
H Form of P-4DL Report
I Form of Indemnification and Contribution Agreement
J Form of Annual Certification
iii
This is a Seller's Purchase, Warranties and Servicing Agreement,
dated as of September 1, 2004 and is executed by and between Xxxxxx Xxxxxxx
Mortgage Capital Inc., as purchaser (the "Purchaser"), and Wachovia Mortgage
Corporation, as seller and servicer (in such capacity, the "Seller").
WITNESSETH:
-----------
WHEREAS, the Purchaser has heretofore agreed to purchase from the
Seller and the Seller has heretofore agreed to sell to the Purchaser certain
Mortgage Loans, servicing rights retained, from time to time, pursuant to the
terms of a letter agreement by and between the Seller and the Purchaser (the
"Purchase Price and Terms Letter");
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed
of trust or other security instrument creating a first or second lien on a
residential dwelling located in the jurisdiction indicated on the related
Mortgage Loan Schedule, which is annexed to the related Assignment and
Conveyance. The Mortgage Loans as described herein shall be delivered in groups
of whole loans (each, a "Mortgage Loan Package") on various dates as provided
herein (each, a "Closing Date"); and
WHEREAS, the Purchaser and the Seller wish to prescribe the
representations and warranties of the Seller with respect to itself, the
Mortgage Loans and the management, servicing and control of the Mortgage Loans
by the Seller.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Purchaser and the
Seller agree as follows:
ARTICLE I
DEFINITIONS
-----------
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meaning
specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located, and which are in accordance with Xxxxxx Mae servicing practices and
procedures, for MBS pool mortgages, as defined in the Xxxxxx Xxx Guides,
including future updates.
Adjustable Rate Mortgage Loan: A Mortgage Loan as to which the
related Mortgage Note provides that the Mortgage Interest Rate may be adjusted
periodically.
4
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on the Mortgage Loan is adjusted in accordance with the terms of the
Mortgage Note.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Seller's Purchase, Warranties and Servicing
Agreement including all exhibits hereto, amendments hereof and supplements
hereto.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i) the value thereof as determined by an appraisal made for the originator
of the Mortgage Loan at the time of origination of the Mortgage Loan by a
Qualified Appraiser, and (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan, provided,
however, in the case of a Refinanced Mortgage Loan, such value of the Mortgaged
Property is based solely upon the value determined by an appraisal made for the
originator of such Refinanced Mortgage Loan at the time of origination of such
Refinanced Mortgage Loan by a Qualified Appraiser.
Assignment and Conveyance: As defined in Section 2.03.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form and in blank,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to give record notice of the transfer of the Mortgage.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a legal holiday in the States of New York or North Carolina, or (iii) a day on
which banks in the States of New York or North Carolina are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates set forth in the related Purchase
Price and Terms Letter on which the Purchaser from time to time shall purchase
and the Seller from time to time shall sell to the Purchaser, the Mortgage Loans
listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Code: The Internal Revenue Code of 1986, as the same may be amended
from time to time (or any successor statute thereto).
5
Combined Loan-to-Value Ratio or CLTV: As to any Second Lien Loan,
the ratio, expressed as a percentage, of the (a) sum of (i) the original
outstanding principal balance of the Second Lien Loan and (ii) the outstanding
principal balance of any mortgage loan or mortgage loans that are senior or
equal in priority to the Second Lien Loan and which are secured by the same
Mortgaged Property as of the origination date at such Second Lien Loan to (b)
the Appraised Value of the related Mortgaged Property as of the origination of
the Second Lien Loan.
Compensating Interest: For any Remittance Date, the lesser of (i)
the aggregate Servicing Fee payable to the Seller for such Remittance Date and
(ii) the aggregate Prepayment Interest Shortfall for such Remittance Date.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a Mortgaged Property, whether permanent or temporary, partial or
entire, by exercise of the power of eminent domain or condemnation, to the
extent not required to be released to a Mortgagor in accordance with the terms
of the related Mortgage Loan Documents.
Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan
purchased pursuant to this Agreement as to which the related Mortgage Note
permits the Mortgagor to convert the Mortgage Interest Rate on such Mortgage
Loan to a fixed Mortgage Interest Rate.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Co-op Stock: With respect to a Co-op Loan, the single outstanding
class of stock, partnership interest or other ownership instrument in the
related residential cooperative housing corporation.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of the Standard & Poor's Glossary.
Credit Score: The credit score for each Mortgage Loan shall be the
minimum of two credit bureau scores obtained at origination or such other time
by the Seller. If two credit bureau scores are obtained, the Credit Score will
be the lower score. If three credit bureau scores are obtained, the Credit Score
will be the middle of the three. When there is more than one applicant, the
lowest of the applicants' Credit Scores will be used. There is only one (1)
score for any loan regardless of the number of borrowers and/or applicants.
Custodial Account: Each separate demand account or accounts created
and maintained pursuant to Section 4.04 which shall be entitled "Wachovia
Mortgage Corporation, in trust for the Purchaser, as owner of various whole loan
series" and shall be established as an Eligible Account, in the name of the
Person that is the "Purchaser" with respect to the related Mortgage Loans.
6
Cut-off Date: With respect to each Mortgage Loan Package, the first
Business Day of the month of the related Closing Date, or as otherwise set forth
in the related Purchase Price and Terms Letter.
Determination Date: With respect to each Remittance Date, the 15th
day (or if such 15th day is not a Business Day, the Business Day immediately
preceding such 15th day) of the month in which such Remittance Date occurs.
Due Date: With respect to any Mortgage Loan, the first day of each
month, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of such Remittance
Date and ending on the first day of the month of the Remittance Date, in both
cases, inclusive.
Eligible Account: An account established and maintained: (a) within
FDIC insured accounts (or other accounts with comparable insurance coverage
acceptable to the Rating Agencies) created, maintained and monitored by the
Seller so that all funds deposited therein are fully insured, (b) with the
corporate trust department of a financial institution assigned a long-term debt
rating of not less than "A-1" by Standard & Poor's or "Prime-1" by Xxxxx'x
Investors Services, Inc. and, if ownership of the Mortgage Loans is evidenced by
mortgaged backed securities, the equivalent ratings of the rating agencies, and
held such that the rights of the Purchaser and the owner of the Mortgage Loans
shall be fully protected against the claims of any creditors of the Seller and
of any creditors or depositors of the institution in which such account is
maintained or (c) in a separate non-trust account without FDIC or other
insurance in an Eligible Institution. In the event that a Custodial Account is
established pursuant to clause (b) or (c) of the preceding sentence, the Seller
shall provide the Purchaser with written notice on the Business Day following
the date on which the applicable institution fails to meet the applicable
ratings requirements.
Eligible Institution: An institution having (i) the highest
short-term debt rating, and one of the two highest long-term debt ratings of the
Rating Agency; or (ii) with respect to any Custodial Account, an unsecured
long-term debt rating of at least one of the two highest unsecured long-term
debt ratings of the Rating Agencies.
Eligible Investments: Any one or more of the following
obligations or securities:
(a) direct obligations of, and obligations fully guaranteed by the
United States of America or any agency or instrumentality of the United States
of America the obligations of which are backed by the full faith and credit of
the United States of America;
(b) (i) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof and subject
to supervision and examination by federal and/or state banking authorities,
provided that the commercial paper and/or the short-term deposit rating and/or
the long-term unsecured debt obligations or deposits of such depository
institution or trust company at the time of such investment or contractual
commitment providing for such
7
investment are rated in one of the two highest rating categories by each Rating
Agency and (ii) any other demand or time deposit or certificate of deposit that
is fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed thirty (30)
days and with respect to (i) any security described in clause (a) above and
entered into with a depository institution or trust company (acting as
principal) described in clause (b)(ii) above;
(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof that are rated in one of the two highest rating categories by each
Rating Agency at the time of such investment or contractual commitment providing
for such investment; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that investments
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as Eligible Investments to exceed 10% of the aggregate
outstanding principal balances of all of the Mortgage Loans and Eligible
Investments;
(e) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) which are rated
in one of the two highest rating categories by each Rating Agency at the time of
such investment;
(f) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as evidenced
in writing by each Rating Agency; and
(g) any money market funds the collateral of which consists of
obligations fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America (which may
include repurchase obligations secured by collateral described in clause (a))
and other securities and which money market funds are rated in one of the two
highest rating categories by each Rating Agency.
provided, however, that no instrument or security shall be an Eligible
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.
Escrow Account: Each separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "Wachovia Mortgage
Corporation, in trust for the Purchaser, as owner of various whole loan series
and various Mortgagors" and shall be established as an Eligible Account, in the
name of the Person that is the "Purchaser" with respect to the related Mortgage
Loans.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments
8
required to be escrowed by the Mortgagor with the mortgagee pursuant to the
Mortgage, applicable law or any other related document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 8.01.
Xxxxxx Mae: The entity formerly known as the Federal National
Mortgage Association, or any successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto, including, but not
limited to, future updates thereof.
Xxxxxx Mae Transfer: As defined in Section 10.01.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller
pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended and in effect from time to time.
First Lien Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
First Remittance Date: The eighteenth (18th) day of the month
following each respective Closing Date, or if such day is not a Business Day,
the first Business Day immediately thereafter.
Fixed Rate Mortgage Loan: A Mortgage Loan purchased pursuant to this
Agreement which bears a fixed Mortgage Interest Rate during the life of the
loan.
Xxxxxxx Mac: The entity formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
Xxxxxxx Mac Guides: The Xxxxxxx Xxx Xxxxxxx' Guide and the Xxxxxxx
Mac Servicers' Guide and all amendments or additions thereto, including, but not
limited to, any future updates thereof.
Xxxxxxx Mac Transfer: As defined in Section 10.01.
GAAP: Generally accepted accounting principles, consistently
applied.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
9
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under any
other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) categorized as High Cost pursuant to
Appendix E of Standard & Poor's Glossary. For avoidance of doubt, the parties
agree that this definition shall apply to any law regardless of whether such law
is presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as a Home Loan pursuant to
Appendix E of the Standard & Poor's Glossary.
HUD: The United States Department of Housing and Urban
Development or any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the Mortgage Interest Rate thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan that only requires
payments of interest for a period of time specified in the related Mortgage
Note.
Liquidation Proceeds: Amounts received in connection with the
partial or complete liquidation of a defaulted Mortgage Loan, whether through
the sale or assignment of such Mortgage Loan, trustee's sale, foreclosure sale
or otherwise, or in connection with the sale of the Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the Mortgage.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan to the Appraised Value of the Mortgaged Property at
origination.
Manufactured Home Mortgage Loan: A single family residential unit
that is constructed in a factory in sections in accordance with the Federal
Manufactured Home Construction and Safety Standards adopted on July 15, 1976, by
the Department of Housing and Urban Development ("HUD Code"), as amended in
2000, which preempts state and local building codes. Each unit is identified by
the presence of a HUD Plate/Compliance Certificate label. The sections are then
transported to the site and joined together and affixed to a pre-built permanent
foundation (which satisfies the manufacturer's requirements and all state,
county, and local building codes and regulations). The manufactured home is
built on a non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of the home may have
running gear (wheels, axles, and brakes) that enable it to be transported to the
permanent site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as real
estate and
10
taxed accordingly. The permanent foundation may be on land owned by the
mortgager or may be on leased land.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be increased on any Adjustment
Date.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware,
or any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any Adjustment
Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Advance: The payment required to be made by the Seller with
respect to any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
pursuant to the terms of the related Mortgage Note.
Mortgage: With respect to any Mortgage Loan that is not a Co-op
Loan, the mortgage, deed of trust or other instrument securing a Mortgage Note
which creates a first or second lien on an unsubordinated estate in fee simple
in real property securing the Mortgage Note; except that with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first or second lien upon a leasehold estate of the Mortgagor. With respect to a
Co-op Loan, the related Security Agreement.
Mortgage File: With respect to each Mortgage Loan, the documents
pertaining thereto specified in Exhibit A-1 and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
11
Mortgage Interest Rate: As to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan in accordance with the provisions
of the related Mortgage Note.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, any escrow accounts related to the Mortgage Loan, and
all other rights, benefits, proceeds and obligations arising from or in
connection with such Mortgage Loan, excluding replaced or repurchased mortgage
loans.
Mortgage Loan Documents: The documents contained in a Mortgage
File.
Mortgage Loan Package: As defined in the Recitals to this
Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the Mortgage Interest Rate less the related Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgagor is
self-employed; (5) a code indicating whether the Mortgaged Property is
owner-occupied; (6) the number of units and type of residential property
constituting the Mortgaged Property; (7) the original months to maturity or the
remaining months to maturity from the related Cut-off Date, in any case based on
the original amortization schedule and, if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (8) with respect
to each First Lien Loan, the LTV at origination, and with respect to each Second
Lien Loan, the CLTV at origination; (9) the Mortgage Interest Rate as of the
related Cut-off Date; (10) the date on which the Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (11) the stated maturity date; (12) the first payment
date; (13) the amount of the Monthly Payment as of the related Cut-off Date;
(14) the last payment date on which a payment was actually applied to the
outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the close
of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (17) with
respect to each Adjustable Rate Mortgage Loan, the Adjustment Date; (18) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (19) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate Cap
under the terms of the Mortgage Note; (20) with respect to each Mortgage Loan, a
code indicating the type of Index; (21) the type of Mortgage Loan (i.e., Fixed
or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (20) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (21) a code indicating the documentation style
(i.e., full,
12
alternative or reduced); (22) asset verification (Y/N); (23) the loan credit
classification (as described in the Underwriting Standards); (24) whether such
Mortgage Loan provides for a Prepayment Penalty and, if applicable, the
Prepayment Penalty term; (25) the Mortgage Interest Rate as of origination; (26)
the credit risk score (FICO score); (27) the date of origination; (28) with
respect to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate adjustment
period; (29) with respect to each Adjustable Rate Mortgage Loan, the Mortgage
Interest Rate adjustment percentage; (30) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate Cap as of the first Adjustment Date;
(31) with respect to each Adjustable Rate Mortgage Loan, the Periodic Rate Cap
subsequent to the first Adjustment Date; (32) the Due Date for the first Monthly
Payment; (33) the original Monthly Payment due; (34) a code indicating the
Primary Mortgage Insurance Policy provider and percentage of coverage, if
applicable; (35) Appraised Value; (36) appraisal type; (37) appraisal date; (40)
a code indicating whether the Mortgage Loans is a "buydown" loan; and (38) with
respect to the related Mortgagor, the debt-to-income ratio. With respect to the
Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; (4) the weighted average maturity of the Mortgage Loans; (5) the
applicable Cut-off Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to any Mortgage Loan that is not a
Co-op Loan, the underlying real property securing repayment of the related
Mortgage Note, consisting of a fee simple parcel of real estate or a leasehold
estate, the term of which is equal to or longer than the term of such Mortgage
Note. With respect to a Co-op Loan, the stock allocated to a dwelling unit in
the residential cooperative housing corporation that was pledged to secure such
Co-op Loan and the related Co-op Lease.
Mortgagor: The obligor on a Mortgage Note.
Mortgagor Personal Information: Any information, including, but
not limited to, all personal information about a Mortgagor that is disclosed
to the Seller or the Purchaser by or on behalf of the Mortgagor.
OCC: Office of the Comptroller of the Currency, its successors
and assigns.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President or
a Vice President and by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Seller, and delivered to the
Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given, reasonably
acceptable to the Purchaser, provided that any Opinion of Counsel relating to
(a) qualification of the Mortgage Loans in a REMIC or (b) compliance with the
REMIC Provisions, must be (unless otherwise stated in such
13
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the
Seller and any servicer of the Mortgage Loans, (ii) does not have any material
direct or indirect financial interest in the Seller or any servicer or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
as an officer, employee, director or person performing similar functions.
OTS: Office of Thrift Supervision or any successor thereto.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan and any Adjustment Date therefor, a number of percentage points per annum
that is set forth in the related Mortgage Loan Schedule and in the related
Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate
for such Mortgage Loan may increase (without regard to the Maximum Mortgage
Interest Rate) or decrease (without regard to the Minimum Mortgage Interest
Rate) on such Adjustment Date from the Mortgage Interest Rate in effect
immediately prior to such Adjustment Date, which may be a different amount with
respect to the first Adjustment Date.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Premium Percentage: With respect to any Mortgage Loan, a percentage
equal to the excess of the Purchase Price Percentage over 100%.
Prepayment Interest Shortfall: As to any Remittance Date and
Principal Prepayment in full, the difference between (i) one full month's
interest at the applicable Mortgage Interest Rate (after giving effect to any
applicable relief act reduction, debt service reduction and deficient
valuation), as reduced by the Servicing Fee Rate, on the outstanding principal
balance of the related Mortgage Loan immediately prior to such Principal
Prepayment and (ii) the amount of interest actually received with respect to
such Mortgage Loan in connection with such Principal Prepayment.
Prepayment Penalty: With respect to each Mortgage Loan, the amount
of any premium or penalty required to be paid by the Mortgagor if the Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note or Mortgage.
Primary Mortgage Insurance Policy: Each policy of primary mortgage
insurance represented to be in effect pursuant to Section 3.02(bb), or any
replacement policy therefor obtained by the Seller pursuant to Section 4.08.
Prime Rate: The prime rate announced to be in effect from time to
time as published as the average rate in The Wall Street Journal (Northeast
Edition).
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan which is received in advance of its scheduled
Due Date, including any Prepayment Penalty thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
14
Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals to
this Agreement which may also be a form of trade execution notice.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., its successors
in interest and assigns.
Qualified Appraiser: With respect to each Mortgage Loan, an
appraiser, duly appointed by the Seller, who had no interest, direct or indirect
in the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and such appraiser and the appraisal made by such appraiser both satisfy
the requirements of Xxxxxx Mae and Title XI of FIRREA and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided by the insurance policy issued by
it, approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Rating Agencies: Standard & Poor's Ratings Services, a division of
The XxXxxx- Xxxx Companies, Inc., Xxxxx'x Investors Service, Inc. or, in the
event that some or all ownership of the Mortgage Loans is evidenced by
mortgage-backed securities, the nationally recognized rating agencies issuing
ratings with respect to such securities, if any.
Reconstitution: As defined in Section 10.01.
Reconstitution Agreement: As defined in Section 10.01.
Reconstitution Date: As defined in Section 10.01.
Refinanced Mortgage Loan: A Mortgage Loan which was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy an
existing mortgage.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
Remittance Date: The 18th day of each month, beginning with the
First Remittance Date, or if such day is not a Business Day, the first Business
Day thereafter.
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: Amounts received by the Seller in
connection with an REO Disposition.
15
REO Property: A Mortgaged Property acquired by or on behalf of the
Purchaser in full or partial satisfaction of the related Mortgage as described
in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty set forth in this Agreement is found, a
price equal to (i) the then outstanding principal balance of the Mortgage Loan
to be repurchased, plus (ii) accrued interest thereon at the Mortgage Interest
Rate from the date to which interest had last been paid through the date of such
repurchase, plus (iii) the amount of any outstanding advances owed to any
servicer, plus (iv) all costs and expenses incurred by the Purchaser or any
servicer arising out of or based upon such breach, including without limitation
reasonable costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder, less (v) in the event the Seller is servicing
such Mortgage Loan as of the date of repurchase, amounts received or advanced in
respect of such repurchased Mortgage Loan which are being held in the Custodial
Account for distribution in connection with such Mortgage Loan, plus (vi) in the
event a Mortgage Loan is repurchased during the period following the related
Closing Date and prior to a related Reconstitution Date (but in no event shall
such period extend for more than the first twelve months following the related
Closing Date), an amount equal to the Premium Percentage multiplied by the
outstanding principal balance of such Mortgage Loan as of the date of such
repurchase.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-offered or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Security Agreement: With respect to a Co-op Loan, the agreement or
mortgage creating a security interest in favor of the originator of the Co-op
Loan in the related Co-op Stock.
Scheduled Principal Balance: As to each Mortgage Loan and any date
of determination, (i) the principal balance of such Mortgage Loan as of the
related Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the Mortgage Loan representing
payments or recoveries of principal (or advances in lieu thereof).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Seller of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of a Mortgaged Property, (b) any enforcement,
administrative or judicial proceedings, or any legal work or advice specifically
related to servicing the Mortgage Loans, including but not limited to,
foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and
16
other legal actions incidental to the servicing of the Mortgage Loans (provided
that such expenses are reasonable and that the Seller specifies the Mortgage
Loan(s) to which such expenses relate, and provided further that any such
enforcement, administrative or judicial proceeding does not arise out of a
breach of any representation, warranty or covenant of the Seller hereunder), (c)
the management and liquidation of any REO Property, (d) taxes, assessments,
water rates, sewer rates and other charges which are or may become a lien upon
the Mortgaged Property, and Primary Mortgage Insurance Policy premiums and fire
and hazard insurance coverage, (e) any expenses reasonably sustained by the
Seller with respect to the liquidation of the Mortgaged Property in accordance
with the terms of this Agreement and (f) compliance with the obligations under
Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Seller, which shall, for each month,
be equal to one-twelfth of the product of (i) the Servicing Fee Rate and (ii)
the Scheduled Principal Balance of such Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is computed,
and for any month in which servicing of such Mortgage Loan is transferred from
the Seller, shall be pro rated (based upon the number of days of the related
month the Seller so acted as servicer relative to the number of days in that
month) for each part thereof. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds and
other proceeds, to the extent permitted by Section 4.05) of related Monthly
Payments collected by the Seller, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The per annum rate at which the Servicing Fee
accrues, which rate with respect to each Mortgage Loan shall be as set forth in
the related Purchase Price and Terms Letter.
Servicing File: With respect to each Mortgage Loan, the documents
pertaining thereto specified in Exhibit A-2 and copies of all documents for such
Mortgage Loan specified in Exhibit A-1.
Servicing Officer: Any officer of the Seller involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Seller to the
Purchaser upon request, as such list may from time to time be amended.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Underwriting Standards: As to each Mortgage Loan, the Seller's
underwriting guidelines in effect as of the date of origination of such
Mortgage Loan.
Whole Loan Transfer: As defined in Section 11.01(a)(i).
17
ARTICLE II
SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01. Agreement to Purchase.
The Seller agrees to sell and the Purchaser agrees to purchase on
each Closing Date, pursuant to this Agreement and the related Purchase Price and
Terms Letter, the Mortgage Loans being sold by the Seller and listed on the
related Mortgage Loan Schedule, servicing rights retained, having an aggregate
Scheduled Principal Balance in an amount as set forth in the related Purchase
Price and Terms Letter, or in such other amount as agreed by the Purchaser and
the Seller as evidenced by the actual aggregate principal balance of the
Mortgage Loans accepted by the Purchaser on such Closing Date. The Seller shall
deliver in an electronic format the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on such Closing Date to the Purchaser at least two (2)
Business Days prior to such Closing Date.
Section 2.02. Purchase Price.
The Purchase Price for the Mortgage Loans in a Mortgage Loan Package
shall be equal to the sum of (a) the percentage of par as stated in the related
Purchase Price and Terms Letter (subject to adjustment as provided therein),
multiplied by the aggregate Scheduled Principal Balance of Mortgage Loans as of
the related Cut-off Date listed on the related Mortgage Loan Schedule plus (b)
accrued interest on the aggregate Scheduled Principal Balance of the related
Mortgage Loans as of the related Cut-off Date at the weighted average Mortgage
Loan Remittance Rate of such Mortgage Loans from and including the related
Cut-off Date to but not including such Closing Date (the "Purchase Price"). If
so provided in the related Purchase Price and Terms Letter, portions of each
Mortgage Loan Package shall be priced separately.
The Purchase Price as set forth in the preceding paragraph for the
Mortgage Loans in a Mortgage Loan Package shall be paid on the related Closing
Date by wire transfer of immediately available funds.
With respect to each Mortgage Loan, the Purchaser shall be entitled
to (1) the principal portion of all Monthly Payments due after the related
Cut-off Date, (2) all other recoveries of principal collected on or after the
related Cut-off Date (provided, however, that the principal portion of all
Monthly Payments due on or before the related Cut-off Date and collected by the
Seller or any successor servicer after the related Cut-off Date shall belong to
the Seller), and (3) all payments of interest on the Mortgage Loans at the
related Mortgage Loan Remittance Rate (minus that portion of any such payment
which is allocable to the period prior to the related Cut-off Date). The
Scheduled Principal Balance of each Mortgage Loan as of the related Cut-off Date
is determined after application of payments of principal due on or before the
related Cut-off Date whether or not collected, together with any unscheduled
Principal Prepayments collected prior to the related Cut-off Date; provided,
however, that Monthly Payments for a Due Date beyond the related Cut-off Date
shall not be applied to the principal
18
balance as of the related Cut-off Date. Such Monthly Payments shall be the
property of the Purchaser. The Seller shall deposit any such Monthly Payments
into the Custodial Account.
Section 2.03. Servicing of Mortgage Loans.
On each Closing Date, the Mortgage Loans in the related Mortgage
Loan Package will be sold by the Seller to the Purchaser on a servicing retained
basis upon the execution and delivery of an Assignment and Conveyance in the
form attached hereto as Exhibit E (the "Assignment and Conveyance").
Simultaneously with the execution and delivery of the related
Assignment and Conveyance, for each Mortgage Loan Package, the Seller hereby
agrees to service the Mortgage Loans listed on the Mortgage Loan Schedule in
accordance with Accepted Servicing Practices and this Agreement. The rights of
the Purchaser to receive payments with respect to the related Mortgage Loans
shall be as set forth in this Agreement.
Section 2.04. Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files.
As of each Closing Date, the Seller will have sold, transferred,
assigned, set over and conveyed to the Purchaser, without recourse, and the
Seller hereby acknowledges that the Purchaser will have, all the right, title
and interest of the Seller in and to the Mortgage Loans. In accordance with
Section 2.07, the Seller shall deliver at its own expense, the Mortgage Files
for the related Mortgage Loans to Purchaser or its designee. The possession of
each Servicing File by the Seller is for the sole purpose of servicing the
related Mortgage Loan. From each Closing Date, the ownership of each related
Mortgage Loan, including the Mortgage Note, the Mortgage, the contents of the
related Mortgage File and all rights, benefits, proceeds and obligations arising
therefrom or in connection therewith, has been vested in the Purchaser. All
rights arising out of the Mortgage Loans including, but not limited to, all
funds received on or in connection with the Mortgage Loans and all records or
documents with respect to the Mortgage Loans prepared by or which come into the
possession of the Seller shall be received and held by the Seller in trust for
the benefit of the Purchaser as the owner of the Mortgage Loans. Any portion of
the Mortgage Files retained by the Seller shall be appropriately identified in
the Seller's computer system to clearly reflect the ownership of the Mortgage
Loans by the Purchaser.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at its own expense, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Seller to
the Purchaser in accordance with this Agreement by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files the information required by the MERS(R) System
to identify the Purchaser of such Mortgage Loans. The Seller further agrees that
it will not alter the information referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
Section 2.05. Books and Records.
19
The sale of each Mortgage Loan will be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller
and will be reflected on the Purchaser's balance sheet and other financial
statements as a purchase by the Purchaser. The Seller shall maintain, a complete
set of books and records for the Mortgage Loans sold by it which shall be
appropriately identified in the Seller's computer system to clearly reflect the
ownership of the Mortgage Loans by the Purchaser. In particular, the Seller
shall maintain in its possession, available for inspection by the Purchaser, or
its designee and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Xxxxxxx Mac, as applicable, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by Seller and periodic
inspection reports as required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Seller may be in the form of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long as
the Seller complies with the requirements of the Xxxxxx Mae Guides.
Section 2.06. Transfer of Mortgage Loans.
The Seller shall keep at its office books and records in which,
subject to such reasonable regulations as it may prescribe, the Seller shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms of Section 11.12. For the
purposes of this Agreement, the Seller shall be under no obligation to deal with
any person with respect to this Agreement or any Mortgage Loan unless a properly
executed Assignment, Assumption and Recognition Agreement in the form of Exhibit
D with respect to such Mortgage Loan has been delivered to the Seller; provided,
that, unless otherwise provided in the related Purchase Price and Terms Letter,
in no event shall there be more than four (4) "Purchasers" with respect to any
Mortgage Loan Package. Upon receipt of notice of the transfer, the Seller shall
xxxx its books and records to reflect the ownership of the Mortgage Loans by
such assignee, and, except as otherwise provided herein, the previous Purchaser
shall be released from its obligations hereunder with respect to the Mortgage
Loans sold or transferred.
Section 2.07. Delivery of Mortgage Loan Documents.
The Seller shall, at least two (2) Business Days prior to the
related Closing Date (or such later date as the Purchaser may reasonably
request), deliver and release to the Purchaser, or its designee, the Mortgage
Loan Documents with respect to each Mortgage Loan pursuant to a bailee letter
agreement. If the Seller cannot deliver the original recorded Mortgage Loan
Documents on the related Closing Date, the Seller shall, promptly upon receipt
thereof and in any case not later than 180 days from the related Closing Date,
deliver such original recorded documents to the Purchaser or its designee
(unless the Seller is delayed in making such delivery by reason of the fact that
such documents shall not have been returned by the appropriate recording
office). If delivery is not completed within 180 days of the related Closing
Date solely because such documents shall not have been returned by the
appropriate recording office, the
20
Seller shall deliver a recording receipt of such recording office or, if such
recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such document has been accepted for
recording and shall use its best efforts to deliver such document within twelve
(12) months of the related Closing Date.
To the extent received by it, the Seller shall forward to the
Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement within two (2) weeks after their execution;
provided, however, that the Seller shall provide the Purchaser, or its designee,
with a copy, certified by the Seller as a true copy, of any such document
submitted for recordation within two (2) weeks after its execution, and shall
promptly provide the original of any document submitted for recordation or a
copy of such document certified by the appropriate public recording office to be
a true and complete copy of the original within two (2) weeks of its return from
the appropriate public recording office.
The Seller shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Section 2.08. Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
must be capable of evaluating and monitoring the overall quality of its loan
production and servicing activities. The program is to ensure that the Mortgage
Loans are originated and serviced in accordance with prudent mortgage banking
practices and accounting principles; guard against dishonest, fraudulent, or
negligent acts; and guard against errors and omissions by officers, employees,
or other authorized persons.
Section 2.09. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the related Closing Date. The closing shall be either: by
telephone, confirmed by letter or wire as the parties shall agree, or conducted
in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the related
Closing Date shall be subject to each of the following conditions:
(a) at least two (2) Business Days prior to the related Closing
Date, the Seller shall deliver to the Purchaser a magnetic
diskette, or transmit by modem or e-mail, a listing on a
loan-level basis of the information contained in the Mortgage
Loan Schedule;
(b) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the related
Closing Date or, with
21
respect to representations and warranties made as of a date
other than the related Closing Date, as of such date, and no
event shall have occurred which, with notice or the passage
of time, would constitute a default under this Agreement;
(c) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing
documents, in such forms as are agreed upon and acceptable to
the Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the terms hereof;
(d) the Seller shall have received, or the Seller's attorneys
shall have received in escrow, all closing documents, in such
forms as are agreed upon and acceptable to the Seller, duly
executed by all signatories other than the Seller as required
pursuant to the terms hereof;
(e) the Seller shall have delivered and released to the Purchaser
(or its designee) on or prior to the related Closing Date all
documents required to be delivered and released pursuant to
the terms of this Agreement; and
(f) all other terms and conditions of this Agreement, the related
Purchase Price and Terms Letter and the related Assignment and
Conveyance shall have been materially complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price pursuant to Section 2.02
of this Agreement, by wire transfer of immediately available funds to the
account designated by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER;
REPURCHASE; REVIEW OF MORTGAGE LOANS
Section 3.01. Representations and Warranties of the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of each Closing Date or as of such date specifically provided herein:
(a) The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
all licenses necessary to carry out its business as now being conducted, and is
licensed and qualified to transact business in and is in good standing under the
laws of each state in which any Mortgaged Property is located or is otherwise
exempt under applicable law from such licensing or qualification or is otherwise
not required under applicable law to effect such licensing or qualification and
no demand for such licensing or qualification has been made upon the Seller by
any such state, and in any event the Seller is in compliance with the laws of
any such state to the extent necessary to ensure the enforceability of each
Mortgage Loan and the servicing of the Mortgage Loans in accordance with the
terms of this Agreement;
22
(b) The Seller has the full power and authority and legal right to
hold, transfer and convey each Mortgage Loan, to sell each Mortgage Loan and to
execute, deliver and perform, and to enter into and consummate all transactions
contemplated by this Agreement, the related Purchase Price and Terms Letter and
the related Assignment and Conveyance and to conduct its business as presently
conducted; the Seller has duly authorized the execution, delivery and
performance of this Agreement and any agreements contemplated hereby, has duly
executed and delivered this Agreement, the related Purchase Price and Terms
Letter and the related Assignment and Conveyance, and any agreements
contemplated hereby, and this Agreement, the related Purchase Price and Terms
Letter, the related Assignment and Conveyance and each Assignment of Mortgage to
the Purchaser and any agreements contemplated hereby, constitute the legal,
valid and binding obligations of the Seller, enforceable against it in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization and similar laws,
and by equitable principles affecting the enforceability of the rights of
creditors; and all requisite corporate action has been taken by the Seller to
make this Agreement, the related Purchase Price and Terms Letter, the related
Assignment and Conveyance and all agreements contemplated hereby valid and
binding upon the Seller in accordance with their respective terms;
(c) None of the execution and delivery of this Agreement, the
related Purchase Price and Terms Letter, the related Assignment and Conveyance,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, or the fulfillment of or compliance with the
terms and conditions of this Agreement, the related Purchase Price and Terms
Letter or the related Assignment and Conveyance will conflict with any of the
terms, conditions or provisions of the Seller's charter or by-laws or materially
conflict with or result in a material breach of any of the terms, conditions or
provisions of any legal restriction or any material agreement or instrument to
which the Seller is now a party or by which it is bound, or constitute a default
or result in an acceleration under any of the foregoing, or result in the
material violation of any law, rule, regulation, order, judgment or decree to
which the Seller or its property is subject;
(d) There is no litigation, suit, proceeding or investigation
pending or, to the Seller's knowledge, threatened, or any order or decree
outstanding, which is reasonably likely to have a material adverse effect on the
sale of the Mortgage Loans, the execution, delivery, performance or
enforceability of this Agreement, the related Purchase Price and Terms Letter or
the related Assignment and Conveyance, or which is reasonably likely to have a
material adverse effect on the financial condition of the Seller;
(e) 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 this Agreement,
the related Purchase Price and Terms Letter and the related Assignment and
Conveyance, except for consents, approvals, authorizations and orders which have
been obtained;
(f) The consummation of the transactions contemplated by this
Agreement, the related Purchase Price and Terms Letter and the related
Assignment and Conveyance are in the ordinary course of business of the Seller,
and the transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller pursuant to this Agreement, the related
23
Purchase Price and Terms Letter and the related Assignment and Conveyance are
not subject to bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(g) The Seller has not used selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans in the Seller's portfolio at the Cut-off Date;
(h) The Seller will treat the sale of the Mortgage Loans to the
Purchaser as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;
(i) The Seller is an approved seller/servicer of residential
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and HUD, with such facilities,
procedures and personnel necessary for the sound servicing of such mortgage
loans. The Seller is duly qualified, licensed, registered and otherwise
authorized under all applicable federal, state and local laws and regulations,
meets the minimum capital requirements, if applicable, set forth by the OCC, and
is in good standing to sell mortgage loans to and service mortgage loans for
Xxxxxx Mae or Xxxxxxx Mac and no event has occurred which would make the Seller
unable to comply with eligibility requirements or which would require
notification to either Xxxxxx Mae or Xxxxxxx Mac;
(j) The Seller does not believe, nor does it have any cause or
reason to believe, that it cannot perform each and every covenant contained in
this Agreement and the related Purchase Price and Terms Letter. The Seller is
solvent and the sale of the Mortgage Loans will not cause the Seller to become
insolvent. The sale of the Mortgage Loans is not undertaken with the intent to
hinder, delay or defraud any of the Seller's creditors;
(k) Neither this Agreement nor any information, statement, tape,
diskette, form, report, or other document furnished or to be furnished pursuant
to this Agreement or any Reconstitution Agreement or in connection with the
transactions contemplated hereby (including any Securitization Transfer or Whole
Loan Transfer) contains or will contain any untrue statement of fact or omits or
will omit to state a fact necessary to make the statements contained herein or
therein not misleading;
(l) The Seller acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Seller, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement;
(m) The Seller has delivered to the Purchaser financial statements
as to its last two complete fiscal years for which financial statements are
available. All such financial statements fairly present the pertinent results of
operations and changes in financial position for each of such periods and the
financial position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with GAAP consistently applied
throughout the periods involved, except as set forth in the notes thereto. There
has been no change in the business, operations, financial condition, properties
or assets of the Seller since the date of the Seller's financial statements that
would have a material adverse effect on its ability to perform its
24
obligations under this Agreement, the related Purchase Price and Terms Letter or
the related Assignment and Conveyance;
(n) The Seller has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans; and
(o) The Seller is a member of MERS in good standing, and will comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the MERS Mortgage Loans for as long as such Mortgage Loans
are registered with MERS.
Section 3.02. Representations and Warranties as to Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, as to
each Mortgage Loan, as of the related Closing Date as follows:
(a) The information set forth in the Mortgage Loan Schedule,
including any diskette or other related data tapes delivered to the Purchaser,
is complete, true and correct in all material respects as of the related Cut-off
Date;
(b) With respect to a first lien Mortgage Loan that is not a Co-op
Loan, the Mortgage creates a first lien or a first priority ownership interest
in an estate in fee simple in real property securing the related Mortgage Note.
With respect to a first lien Mortgage Loan that is a Co-op Loan, the Mortgage
creates a first lien or a first priority ownership interest in the stock
ownership and leasehold rights associated with the cooperative unit securing the
related Mortgage Note;
(c) With respect to a Second Lien Mortgage Loan that is not a Co-op
Loan, the Mortgage creates a second lien or a second priority ownership interest
in an estate in fee simple in real property securing the related Mortgage Note.
With respect to a Second Lien Mortgage Loan that is a Co-op Loan, the Mortgage
creates a second lien or a second priority ownership interest in the stock
ownership and leasehold rights associated with the cooperative unit securing the
related Mortgage Note;
(d) All payments due on or prior to the related Cut-off Date for
such Mortgage Loan have been made as of the related Closing Date, the Mortgage
Loan is not delinquent thirty (30) days or more in payment and has not been
dishonored; there are no material defaults under the terms of the Mortgage Loan;
the Seller has not advanced funds, or induced, solicited or knowingly received
any advance of funds from a party other than the owner of the Mortgaged Property
subject to the Mortgage, directly or indirectly, for the payment of any amount
required by the Mortgage Loan; as to each Mortgage Loan, there has been no more
than one thirty (30) day delinquency during the immediately preceding
twelve-month period;
(e) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or escrow funds have been established in an
amount sufficient to pay for every such escrowed item which remains unpaid and
which has been assessed but is not yet due and payable;
25
(f) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed in connection
with such Mortgage Loan, and no Mortgagor has been released, in whole or in
part, from the terms thereof except in connection with an assumption agreement
and which assumption agreement is part of the Mortgage File and the terms of
which are reflected in the Mortgage Loan Schedule; the substance of any such
waiver, alteration or modification has been approved by the issuer of any
related Primary Mortgage Insurance Policy and title insurance policy, to the
extent required by the related policies;
(g) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including, without limitation,
the defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render the
Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim or defense has
been asserted with respect thereto;
(h) All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the Xxxxxx Mae
Guides, against loss by fire, hazards of extended coverage and such other
hazards as are provided for in the Xxxxxx Xxx Guides or by Xxxxxxx Mac, as well
as all additional requirements set forth in Section 4.10 of this Agreement. All
such standard hazard policies are in full force and effect and on the date of
origination contained a standard mortgagee clause naming the Seller and its
successors in interest and assigns as loss payee and such clause is still in
effect and all premiums due thereon have been paid. If required by the Flood
Disaster Protection Act of 1973, as amended, the Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration which policy conforms to Xxxxxx Xxx and Xxxxxxx
Mac requirements, as well as all additional requirements set forth in Section
4.10 of this Agreement. Such policy was issued by an insurer acceptable under
Xxxxxx Mae or Xxxxxxx Mac guidelines. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and expense,
and upon the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
26
(i) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(j) The Mortgage has not been satisfied, canceled or subordinated,
in whole or in part, or rescinded, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;
(k) With respect to any first lien Mortgage Loan, the related
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property and, with respect to any Second Lien Mortgage Loan, the
related Mortgage is a valid, subsisting, enforceable and perfected second lien
on the Mortgaged Property, including for Mortgage Loans that are not Co-op
Loans, all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems affixed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing securing the Mortgage Note's original
principal balance. The Mortgage and the Mortgage Note do not contain any
evidence of any security interest or other interest or right thereto. Such lien
is free and clear of all adverse claims, liens and encumbrances having priority
over the first or second lien, as applicable, of the Mortgage subject only to
(1) with respect to any Second Lien Mortgage Loan, the related First Lien, (2)
the lien of non-delinquent current real property taxes and assessments not yet
due and payable, (3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
which are acceptable to mortgage lending institutions generally and either (A)
which are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, and
(4) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates (1) with respect to any first lien Mortgage Loan, a
valid, subsisting, enforceable and perfected first lien and first priority
security interest and (2) with respect to any Second Lien Mortgage Loan, a
valid, subsisting, enforceable and perfected second lien and second priority
security interest, in each case, on the property described therein, and the
Seller has the full right to sell and assign the same to the Purchaser;
(l) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights
27
of creditors generally and the equitable remedy of specific performance and by
general equitable principles. All parties to the Mortgage Note and the related
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the related Mortgage. The Mortgage Note and
the related Mortgage have been duly and properly executed by such parties. No
fraud, error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place on the part of Seller, the Mortgagor
or any other party involved in the origination of the Mortgage Loan. The
proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or related Mortgage;
(m) The Seller or its Affiliate (or with respect to MERS Mortgage
Loans, MERS on behalf of the Seller or its Affiliate) is the sole owner of
record and holder of the Mortgage Loan and the indebtedness evidenced by the
Mortgage Note, and upon recordation the Purchaser or its designee will be the
owner of record of the Mortgage and the indebtedness evidenced by the Mortgage
Note, and upon the sale of the Mortgage Loan to the Purchaser, the Seller will
retain the Servicing File in trust for the Purchaser only for the purpose of
servicing and supervising the servicing of the Mortgage Loan. Immediately prior
to the transfer and assignment to the Purchaser on the related Closing Date, the
Mortgage Loan, including the Mortgage Note and the Mortgage, were not subject to
an assignment or pledge, and the Seller had good and marketable title to and was
the sole owner thereof and had full right to transfer and sell the Mortgage Loan
to the Purchaser free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest and has the full right and authority subject
to no interest or participation of, or agreement with, any other party, to sell
and assign the Mortgage Loan pursuant to this Agreement and following the sale
of the Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear
of any encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except for the purposes of servicing the
Mortgage Loan as set forth in this Agreement. After the related Closing Date,
the Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Each Mortgage Loan that is not a Co-op Loan is covered by an
ALTA lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac, issued by a title
insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring (subject to
the exceptions contained in (k)(1), (2), (3) and (4) above) the Seller, its
successors and assigns, as to the first or second priority lien, as applicable,
of the Mortgage in the original principal amount of the Mortgage Loan. Where
required by applicable state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance. The
Seller, its successors and assigns, are the sole insureds of such lender's title
insurance policy, such title insurance policy has been duly and validly endorsed
to the Purchaser or the assignment to the Purchaser of the Seller's interest
therein does not require
28
the consent of or notification to the insurer and such lender's title insurance
policy is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement and the related
Purchase Price and Terms Letter. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(o) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor, to the Seller's knowledge, any prior
mortgagee has waived any default, breach, violation or event permitting
acceleration. With respect to each Second Lien Mortgage Loan, (i) the First Lien
is in full force and effect, (ii) there is no default, breach, violation or
event of acceleration existing under such prior mortgage or the related mortgage
note, (iii) no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration thereunder, and either (A) the prior mortgage
contains a provision which allows or (B) applicable law requires, the mortgagee
under the Second Lien Mortgage Loan to receive notice of, and affords such
mortgagee an opportunity to cure any default by payment in full or otherwise
under the prior mortgage;
(p) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to or equal to the lien of the related Mortgage,
which are not insured against by the title insurance policy referenced in
paragraph (n) above;
(q) All improvements subject to the Mortgage which were considered
in determining the Appraised Value of the Mortgaged Property lie wholly within
the boundaries and building restriction lines of the Mortgaged Property (and
wholly within the project with respect to a condominium unit) and no
improvements on adjoining properties encroach upon the Mortgaged Property except
those which are insured against by the title insurance policy referred to in
clause (n) above and all improvements on the property comply with all applicable
zoning and subdivision laws and ordinances;
(r) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with the terms, conditions and requirements of the
Underwriting Standards in all material respects. The Mortgage Notes and
Mortgages (exclusive of any riders) are on forms generally acceptable to Xxxxxx
Xxx or Xxxxxxx Mac. The Mortgage Loan bears interest at the Mortgage Interest
Rate set forth in the related Mortgage Loan Schedule, and Monthly Payments under
the Mortgage Note are due and payable on the first day of each month. The
Mortgage contains the usual and enforceable provisions of the originator at the
time of origination for the acceleration of the payment of the unpaid principal
amount of the Mortgage Loan if the related
29
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder;
(s) The Mortgaged Property at origination of the related Mortgage
Loan was and, to the Seller's knowledge, currently is free of material damage
and waste. At origination of the Mortgage Loan there was, and there currently
is, no proceeding pending for the total or partial condemnation of the Mortgaged
Property;
(t) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby. Upon default by a Mortgagor on a Mortgage Loan
and foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;
(u) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses, except as may be required by local law, are
or will become payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee's sale or attempted sale after default by
the Mortgagor;
(v) The Mortgage File contains an appraisal (or other valuation
method as indicated on the related Mortgage Loan Schedule and otherwise
acceptable to Xxxxxx Xxx or Xxxxxxx Mac for mortgage loans that have "DU"
underwriter or loan prospector approval, respectively) of the related Mortgaged
Property signed prior to the final approval of the mortgage loan application by
a Qualified Appraiser. The appraisal is in a form acceptable to Xxxxxx Mae or
Xxxxxxx Mac;
(w) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (A) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal savings and
loan associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;
(x) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to in
clause (k) above and such collateral does not serve as security for any other
obligation;
(y) The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account
30
established by the Seller or anyone on behalf of the Mortgagor, or paid
by any source other than the Mortgagor nor does it contain any other similar
provisions which may constitute a "buydown" provision. The Mortgage Loan is not
a graduated payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(z) The Mortgagor was not in bankruptcy or insolvent as of the date
of origination of the Mortgage Loan and, to the Seller's knowledge, is not in
bankruptcy or insolvent as of the related Closing Date;
(aa) Each Fixed Rate Mortgage Loan has an original term to maturity
of not more than thirty (30) years, with interest calculated and payable in
arrears on the first day of each month in equal monthly installments of
principal and interest. Except with respect to Interest Only Mortgage Loans,
each Mortgage Note requires a monthly payment which is sufficient to fully
amortize the original principal balance of the Mortgage Loan fully by the stated
maturity date, over an original term of not more than thirty (30) years and to
pay interest at the related Mortgage Interest Rate; provided, however, in the
case of an Interest Only Mortgage Loan, after the interest-only period, payments
will be sufficient to amortize with respect to the life of the Mortgage Loan. No
Mortgage Loan contains terms or provisions which would result in negative
amortization. No Mortgage Loan is a Balloon Mortgage Loan;
(bb) If a Mortgage Loan has an LTV greater than 80%, the portion of
the principal balance of such Mortgage Loan in excess of the portion of the
Appraisal Value of the Mortgaged Property required by Xxxxxx Mae, is and will be
insured as to payment defaults by a Primary Mortgage Insurance Policy issued by
a Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy
have been and are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. No action, inaction, or event
has occurred and no state of facts exists that has, or will result in the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to
a Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Mortgage Insurance Policy and to pay all premiums and
charges in connection therewith. The mortgage interest rate for the Mortgage
Loan as set forth on the related Mortgage Loan Schedule is net of any such
insurance premium;
(cc) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(dd) As to Mortgage Loans that are not Co-op Loans and that are not
secured by an interest in a leasehold estate, the Mortgaged Property is located
in the state identified in the related Mortgage Loan Schedule and consists of a
single parcel of real property with a detached single family residence erected
thereon, or a townhouse, or a two-to four-family dwelling, or an individual
condominium unit in a condominium project, or an individual unit in a planned
unit development or a de minimis planned unit development, provided, however,
that no residence or dwelling is a mobile home, log home, geodesic dome or other
unique property type. As of the date of origination, no portion of the Mortgaged
Property was used for commercial purposes, and, since the date of origination no
portion of the Mortgaged Property has been used for commercial purposes, except
as permitted under the Underwriting Standards. In the case of any Mortgaged
Properties that are manufactured homes (a "Manufactured Home Mortgage Loan"),
31
(i) such Manufactured Home Mortgage Loan conforms with the applicable Xxxxxx Xxx
or Xxxxxxx Mac requirements regarding mortgage loans related to manufactured
dwellings, (ii) the related manufactured dwelling is permanently affixed to the
land, (iii) the related manufactured dwelling and the related land are subject
to a Mortgage properly filed in the appropriate public recording office and
naming Seller as mortgagee, (iv) the applicable laws of the jurisdiction in
which the related Mortgaged Property is located will deem the manufactured
dwelling located on such Mortgaged Property to be a part of the real property on
which such dwelling is located, and (v) such Manufactured Home Mortgage Loan is
(x) a qualified mortgage under Section 860G(a)(3) of the Internal Revenue Code
of 1986, as amended and (y) secured by manufactured housing treated as a single
family residence under Section 25(e)(10) of the Code. As of the date of
origination, no portion of the Mortgaged Property was used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that Mortgaged
Properties which contain a home office shall not be considered as being used for
commercial purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials other than
those commonly used for homeowner repair, maintenance and/or household purposes;
(ee) Except with respect to Interest Only Mortgage Loans, principal
payments on the Mortgage Loan commenced no more than sixty (60) days after the
funds were disbursed in connection with such Mortgage Loan;
(ff) No Mortgage Loan imposes a Prepayment Penalty;
(gg) As of the date of origination of the Mortgage Loan, the
Mortgaged Property was lawfully occupied under applicable law, and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(hh) If the Mortgaged Property is a condominium unit or a planned
unit development (other than a de minimis planned unit development), or stock in
a cooperative housing corporation, such condominium, cooperative or planned unit
development project meets the Seller's eligibility requirements as set forth in
Underwriting Standards;
(ii) There is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property; and, to the best of the
Seller's knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(jj) The related Mortgagor has not notified the Seller, and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Servicemembers Civil Relief Act or other similar state statute;
32
(kk) No action has been taken or failed to be taken by the Seller on
or prior to the related Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of the Seller, or for any other reason under such coverage;
(ll) Each Mortgage Loan has been serviced in all material respects
in compliance with Accepted Servicing Practices;
(mm) With respect to each Co-op Loan, the related Mortgage is a
valid, enforceable and subsisting first security interest on the related
cooperative shares securing the related cooperative note, subject only to (a)
liens of the cooperative for unpaid assessments representing the Mortgagor's pro
rata share of the cooperative's payments for its blanket mortgage, current and
future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Security
Agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Seller's security interest in such cooperative shares;
(nn) With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the same,
which company is acceptable to Xxxxxx Xxx and qualified to do business in the
jurisdiction where the cooperative unit is located, and such search has not
found anything which would materially and adversely affect the Co-op Loan;
(oo) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the Code,
is held by a person as a tenant-stockholder (as defined in Section 216 of the
Code) and is in material compliance with applicable federal, state and local
laws which, if not complied with, could have a material adverse effect on the
Mortgaged Property;
(pp) With respect to each Co-op Loan, there is no prohibition
against pledging the shares of the cooperative corporation or assigning the
Co-op Lease;
(qq) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority;
33
(rr) With respect to any ground lease to which a Mortgaged Property
may be subject: (i) a true, correct and complete copy of the ground lease and
all amendments, modifications and supplements thereto is included in the
Servicing File, and the Mortgagor is the owner of a valid and subsisting
leasehold interest under such ground lease; (ii) such ground lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise
except as contained in the Mortgage File; (iii) all rent, additional rent and
other charges reserved therein have been fully paid to the extent payable as of
the related Closing Date; (iv) the Mortgagor enjoys the quiet and peaceful
possession of the leasehold estate, subject to any sublease; (v) the Mortgagor
is not in default under any of the terms of such ground lease, and there are no
circumstances which, with the passage of time or the giving of notice, or both,
would result in a default under such ground lease; (vi) the lessor under such
ground lease is not in default under any of the terms or provisions of such
ground lease on the part of the lessor to be observed or performed; (vii) the
lessor under such ground lease has satisfied any repair or construction
obligations due as of the related Closing Date pursuant to the terms of such
ground lease; (viii) the execution, delivery and performance of the Mortgage do
not require the consent (other than those consents which have been obtained and
are in full force and effect) under, and will not contravene any provision of or
cause a default under, such ground lease; (ix) the ground lease term extends
beyond the maturity date of the related Mortgage Loan; and (x) the Purchaser has
the right to cure defaults on the ground lease;
(ss) With respect to any broker fees collected and paid on any of
the Mortgage Loans, all broker fees have been properly assessed to the borrower
and no claims will arise as to broker fees that are double charged and for which
the borrower would be entitled to reimbursement;
(tt) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);
(uu) Except as provided in Section 2.07, the Mortgage Note, the
Mortgage, the Assignment of Mortgage and the other documents set forth in
Exhibit A-1 and required to be delivered on the related Closing Date have been
delivered to the Purchaser or its designee;
(vv) To the Seller's knowledge, all information supplied by, on
behalf of, or concerning the Mortgagor is true, accurate and complete and does
not contain any statement that is or will be inaccurate or misleading in any
material respect;
(ww) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law with
respect to the making of adjustable rate mortgage loans. The Seller shall
maintain such statement in the Servicing File;
(xx) No Mortgage Loan had a Loan-to-Value Ratio at the time of
origination of more than 100%. No Second Lien Mortgage Loan has an CLTV in
excess of 100%;
(yy) Either (a) no consent for the Second Lien Mortgage Loan is
required by the holder of the related First Lien or (b) such consent has been
obtained and is contained in the Mortgage File;
34
(zz) With respect to any Second Lien Mortgage Loan, the Seller has
not received notice of: (1) any proceeding for the total or partial condemnation
of any Mortgaged Property, (2) any subsequent, intervening mortgage, lien,
attachment, lis pendens or other encumbrance affecting any Mortgaged Property or
(3) any default under any mortgage, lien or other encumbrance senior to each
Mortgage;
(aaa) No Second Lien Mortgage Loan is a "home equity line of
credit";
(bbb) As of the Closing Date, the Seller has not received a notice
of default of a First Lien which has not been cured;
(ccc) No First Lien provides for negative amortization;
(ddd) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act;
(eee) None of the proceeds of the Mortgage Loan were used to finance
single-premium credit insurance policies;
(fff) The origination and servicing practices with respect to each
Mortgage Note and Mortgage have been legal and in accordance with applicable
laws and regulations, and in all material respects proper and prudent in the
mortgage origination and servicing business. With respect to escrow deposits and
payments that the Seller is entitled to collect, all such payments are in the
possession of, or under the control of, the Seller, and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All escrow payments have been collected
and are being maintained in full compliance with applicable state and federal
law and the provisions of the related Mortgage Note and Mortgage. As to any
Mortgage Loan that is the subject of an escrow, escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient to
pay for every escrowed item that remains unpaid and has been assessed but is not
yet due and payable. No escrow deposits or other charges or payments due under
the Mortgage Note have been capitalized under any Mortgage or the related
Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
Note. Any interest required to be paid pursuant to state and local law has been
properly paid and credited;
(ggg) No Mortgage Loan is a Convertible Mortgage Loan;
(hhh) With respect to each Adjustable Rate Mortgage Loan, the
Mortgage Loan Documents provide that after the related first Interest Rate
Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(iii) Any future advances made to the Mortgagor prior to the
applicable Cut-off Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is
35
expressly insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the Mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Mae and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(jjj) There is no proceeding pending or threatened for the total or
partial condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. There have not been
any condemnation proceedings with respect to the Mortgaged Property and the
Seller has no knowledge of any such proceedings in the future;
(kkk) No Mortgage Loan was made in connection with the construction
(other than a "construct-to-perm" loan) or rehabilitation of a Mortgaged
Property or facilitating the trade-in or exchange of a Mortgaged Property (other
than a tax deferred exchange under Section 1031 of the Code);
(lll) If applicable, with respect to each Mortgage, the Seller has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(mmm) As to each consumer report (as defined in the Fair Credit
Reporting Act, Public Law 91-508) or other credit information furnished by the
Seller to the Purchaser, the Seller has full right and authority and is not
precluded by law or contract from furnishing such information to the Purchaser
and the Purchaser is not precluded from furnishing the same to any subsequent or
prospective purchaser of such Mortgage. The Seller has and shall in its capacity
as servicer, for each Mortgage Loan, fully furnished, in accordance with the
Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files to Equifax, Experian and Trans Union Credit Information Company (three of
the credit repositories), on a monthly basis;
(nnn) If the Mortgage Loan is secured by a leasehold estate, (1) the
ground lease is assignable or transferable; (2) the ground lease will not
terminate earlier than five years after the maturity date of the Mortgage Loan;
(3) the ground lease does not provide for termination of the lease in the event
of lessee's default without the Mortgagee being entitled to receive written
notice of, and a reasonable opportunity to cure the default; (4) the ground
lease permits the mortgaging of the related Mortgaged Property; (5) the ground
lease protects the Mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
36
(ooo) Each Mortgage Loan is covered by a paid in full, life of loan,
tax service contract issued by First American Real Estate Tax Service, and such
contract is transferable;
(ppp) The Seller's decision to originate any mortgage loan or to
deny any mortgage loan application is an independent decision based upon
Seller's underwriting guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated;
(qqq) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the Purchaser
and any Mortgage Loan for which the related Mortgage has been recorded in the
name of MERS) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(rrr) On or prior to the related Closing Date, the Mortgagor has not
filed a bankruptcy petition or has not become the subject of involuntary
bankruptcy proceedings or has not consented to the filing of a bankruptcy
proceeding against it or to a receiver being appointed in respect of the related
Mortgaged Property;
(sss) No Mortgagor with respect to any Mortgage Loan originated on
or after August 1, 2004 is required under the Mortgage or Mortgage Note to
submit to arbitration to resolve any dispute arising out of or relating in any
way to the mortgage loan transaction;
(ttt) The Seller has complied with all applicable anti-money
laundering laws and regulations, including without limitation the USA Patriot
Act of 2001;
(uuu) The Mortgage Note, the Mortgage, the Assignment of Mortgage
and any other documents required to be delivered with respect to each Mortgage
Loan pursuant to Section 2.07 of this Agreement shall be delivered to the
Purchaser or its designee all in compliance with the specific requirements of
Section 2.07. With respect to each Mortgage Loan, the Seller will be in
possession of a complete Mortgage File in compliance with Exhibit A-1 hereto,
except for such documents as will be delivered to the Purchaser or its designee;
(vvv) With respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Interest Rate is the related Gross Margin; and
(www) The Seller has no knowledge of any circumstances or conditions
with respect to the related Mortgage, Mortgaged Property, Mortgagor, Mortgage
File or the related Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors that invest in prime mortgage loans
similar to the Mortgage Loan to regard the Mortgage Loan as an unacceptable
investment.
Section 3.03. Repurchase; Substitution.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans
and delivery of the Mortgage File to the Purchaser, or its designee, and shall
inure to the benefit of the Purchaser, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment
37
of Mortgage or the examination, or lack of examination, of any Mortgage Loan
Document. Upon discovery by the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser in any
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the others. The Seller shall have a period of ninety (90) days from
the earlier of its discovery or its receipt of notice of any such breach within
which to correct or cure such breach. Notwithstanding the above sentences, with
respect to any Mortgage Loan included in a Securitization Transfer, within sixty
(60) days after the earlier of either discovery by, or notice to, the Seller of
any breach of the representations or warranties set forth in clause (ff), (tt),
(ddd), (eee), (mmm) or (sss) of Section 3.02, the Seller shall repurchase such
Mortgage Loan at the Repurchase Price. The Seller hereby covenants and agrees
that (except as provided in the previous sentence with respect to certain
breaches for which no substitution is permitted) if any such breach is not
corrected or cured within such ninety (90) day period, the Seller shall, at the
Purchaser's option, either repurchase such Mortgage Loan at the Repurchase Price
or substitute a mortgage loan for the Defective Mortgage Loan as provided below.
In the event that any such breach shall involve any representation or warranty
set forth in Section 3.01, and such breach is not cured within ninety (90) of
the earlier of either discovery by or notice to the Seller of such breach, all
affected Mortgage Loans shall, at the option of the Purchaser, be repurchased by
the Seller at the Repurchase Price. Any such repurchase shall be accomplished by
deposit in the Custodial Account of the amount of the Repurchase Price.
If pursuant to the foregoing provisions the Seller repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Seller shall either (i) cause
MERS to execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to the Seller and shall cause such Mortgage to
be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations or (ii) cause MERS to designate on the MERS(R) System the
Seller as the beneficial holder of such Mortgage Loan.
If the Seller is required to repurchase any Mortgage Loan pursuant
to this Section 3.03 as a result of a breach of any of the representations and
warranties set forth in Section 3.02, the Seller may, with the Purchaser's prior
consent, which consent shall not be unreasonably withheld, within 180 days from
the related Closing Date, remove such defective Mortgage Loan from the terms of
this Agreement and substitute another mortgage loan for such defective Mortgage
Loan, in lieu of repurchasing such defective Mortgage Loan. Any substitute
Mortgage Loan shall (a) have a principal balance at the time of substitution not
in excess of the principal balance of the defective Mortgage Loan (the amount of
any difference, plus one month's interest thereon at the Mortgage Interest Rate
borne by the defective Mortgage Loan, being paid by the Seller and deemed to be
a Principal Prepayment to be deposited by the Seller in the Custodial Account),
(b) have a Mortgage Interest Rate not less than, and not more than one
percentage point greater than, the Mortgage Interest Rate of the removed
Mortgage Loan, (c) have a remaining term to stated maturity not later than, and
not more than one year less than, the remaining term to stated maturity of the
removed Mortgage Loan, (d) have a Loan-to-Value Ratio at origination no greater
than that of the removed Mortgage Loan, (e) with respect to any Second Lien
Mortgage Loan, have an Combined Loan-to-Value Ratio at origination no greater
than that of the removed Mortgage Loan, (f) have the same lien priority as that
of the removed Mortgage Loan and (g) be, in the reasonable determination of the
Purchaser, in material
38
compliance with the representations and warranties contained in this Agreement
and described in Section 3.02 as of the date of substitution.
The Seller shall amend the related Mortgage Loan Schedule to reflect
the withdrawal of the removed Mortgage Loan from this Agreement and the
substitution of such substitute Mortgage Loan therefor. Upon such amendment, the
Purchaser shall review the Mortgage File delivered to it relating to the
substitute Mortgage Loan. The Monthly Payment on a substitute Mortgage Loan due
on the Due Date in the month of substitution shall be the property of the Seller
and the Monthly Payment on the Defective Mortgage Loan for which the
substitution is made due on the such date shall be the property of the
Purchaser.
It is understood and agreed that the obligation of the Seller set
forth in this Section 3.03 to cure, repurchase or substitute for a defective
Mortgage Loan, and to indemnify Purchaser pursuant to Section 7.01, constitutes
the sole remedies of the Purchaser respecting a breach of the foregoing
representations and warranties. If the Seller fails to repurchase or substitute
for a defective Mortgage Loan in accordance with this Section 3.03, or fails to
cure a defective Mortgage Loan to Purchaser's reasonable satisfaction in
accordance with this Section 3.03, or to indemnify Purchaser pursuant to Section
7.01, that failure shall, upon compliance by the Purchaser with the next to the
last paragraph of this Section 3.03, be an Event of Default and the Purchaser
shall be entitled to pursue all available remedies. No provision of this
paragraph shall affect the rights of the Purchaser to terminate this Agreement
for cause, as set forth in Sections 8.01 and 9.01.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) the earlier of discovery of such
breach by the Seller or notice thereof by the Purchaser to the Seller, (ii)
failure by the Seller to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which no default is imminent,
Purchaser may, in connection with any repurchase or substitution of a Defective
Mortgage Loan pursuant to this Section 3.03, require that the Seller deliver, at
the Seller's expense, an Opinion of Counsel to the effect that such repurchase
or substitution will not (i) result in the imposition of taxes on "prohibited
transactions" of such REMIC (as defined in Section 860F of the Code) or
otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify
as a REMIC at any time.
Section 3.04. Repurchase of Mortgage Loans With First Payment
Defaults.
If a Mortgagor is thirty (30) days or more delinquent with respect
to the first Monthly Payment due to the Purchaser on the related Mortgage Loan
immediately following the related Closing Date, the Seller, at the Purchaser's
option, shall promptly repurchase such Mortgage Loan from the Purchaser within
thirty (30) calendar days' of receipt of written notice from the Purchaser. Any
repurchase pursuant to this Section 3.04 shall be effected in accordance
39
with the procedures set forth in Section 3.03 hereof, however, any such
repurchase shall be made at the Repurchase Price.
Section 3.05. Purchase Price Protection.
With respect to any Mortgage Loan that prepays in full during the
first sixty (60) days following the related Closing Date, the Seller shall
reimburse the Purchaser the amount (if any) by which the Purchase Price paid by
the Purchaser to the Seller exceeded 100% of the outstanding scheduled principal
balance of the Mortgage Loan as of the related Cut-off Date, within thirty (30)
days of such payoff. Upon any assignment of a Mortgage Loan and/or this
Agreement, the Purchaser may at its option retain its rights under this Section
3.05 notwithstanding such assignment.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01. The Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices, and shall have full power and authority, acting
alone or through subservicers or agents, to do or cause to be done any and all
things in connection with such servicing and administration which the Seller may
deem necessary or desirable and consistent with the terms of this Agreement and
with Accepted Servicing Practices. The Seller shall service and administer the
Mortgage Loans through the exercise of the same care that it customarily employs
for its own account. The Seller may perform its servicing responsibilities
through agents or independent contractors, but shall not thereby be released
from any of its responsibilities hereunder. Notwithstanding anything to the
contrary, the Seller may delegate any of its duties under this Agreement to one
or more of its Affiliates without regard to any of the requirements of this
Section; provided, however, that the Seller shall not be released from any of
its responsibilities hereunder by virtue of such delegation.
Except as set forth in this Agreement, the Seller shall service the
Mortgage Loans in compliance with the servicing provisions of the Xxxxxx Xxx
Guides (special servicing option), which include, but are not limited to,
provisions regarding the liquidation of Mortgage Loans, the collection of
Mortgage Loan payments, the payment of taxes, insurance and other charges, the
maintenance of hazard insurance with a Qualified Insurer, the maintenance of
mortgage impairment insurance, the maintenance of fidelity bond and errors and
omissions insurance, inspections, the restoration of Mortgaged Property, the
maintenance of Primary Mortgage Insurance Policies, insurance claims, the title,
management of REO Property, permitted withdrawals with respect to REO Property,
liquidation reports, and reports of foreclosures and abandonments of Mortgaged
Property, the transfer of Mortgaged Property, the release of Mortgage Files,
annual statements, and examination of records and facilities. In the event of
any conflict, inconsistency or discrepancy between any of the servicing
provisions of this Agreement and any of the servicing provisions of the Xxxxxx
Mae Guides, the provisions of this Agreement shall control and be binding upon
the Purchaser and the Seller.
40
Consistent with the terms of this Agreement, the Seller may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
any such term or in any manner grant indulgence to any Mortgagor if in the
Seller's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser, provided,
however, that unless the Mortgagor is in default with respect to the Mortgage
Loan, or such default is, in the judgment of the Seller, imminent, and the
Seller has obtained the prior written consent of the Purchaser, the Seller shall
not permit any modification with respect to any Mortgage Loan that would which
change the Mortgage Interest Rate, forgive the payment of any principal or
interest, reduce or increase the outstanding principal balance (except for
actual payments of principal), make any future advances or extend the final
maturity date, as the case may be, with respect to such Mortgage Loan. In the
event of any such modification that permits the deferral of interest or
principal payments on any Mortgage Loan, the Seller shall, on the Business Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 4.04, the difference
between (a) the otherwise scheduled Monthly Payment and (b) the amount paid by
the Mortgagor. The Seller shall be entitled to reimbursement for such advances
to the same extent as for all other advances pursuant to Section 4.05. Without
limiting the generality of the foregoing, the Seller shall continue, and is
hereby authorized and empowered by the Purchaser when the Seller believes it
appropriate and reasonable in its best judgment, to prepare, execute and
deliver, all instruments of satisfaction or cancellation, or of partial or full
release, discharge and all other comparable instruments, with respect to the
Mortgage Loans and with respect to the Mortgaged Properties and to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert
the ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Purchaser pursuant to the provisions of Section
4.13. Notwithstanding anything herein to the contrary, the Seller may not enter
into a forbearance agreement or similar arrangement with respect to any Mortgage
Loan which runs more than 180 days after the first delinquent Due Date without
the prior consent of the Purchaser. Any such agreement shall be approved by any
applicable holder of a Primary Mortgage Insurance Policy, if required.
The Seller is authorized and empowered by the Purchaser, in its own
name, when the Seller believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Purchaser, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
With respect to requests by the Seller to modify the terms of any
Mortgage Loan or to enter into any forbearance agreement, the Purchaser shall be
deemed to have given consent in connection with a particular matter if the
Purchaser does not affirmatively grant or deny consent within twenty-one (21)
calendar days from the date the Purchaser receives a written request for consent
for such matter from the Seller.
The Seller shall accurately and fully report its borrower credit
files related to the Mortgage Loans to Equifax, Transunion and Experian in a
timely manner.
41
Section 4.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each Mortgage Loan
ceases to be serviced subject to this Agreement, the Seller will proceed
diligently to collect all payments due under each Mortgage Loan when the same
shall become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement, Accepted Servicing Practices, and the terms and
provisions of related Primary Mortgage Insurance Policy, follow such collection
procedures as it follows with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Further, the Seller will take
special care in ascertaining and estimating annual escrow payments, and all
other charges that, as provided in the Mortgage, will become due and payable, so
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 4.03. Realization Upon Defaulted Mortgage Loans.
The Seller shall use commercially reasonable efforts, consistent
with the procedures that the Seller would use in servicing loans for its own
account, Accepted Servicing Practices, any Primary Mortgage Insurance and the
best interest of Purchaser, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 4.01. Foreclosure or
comparable proceedings shall be initiated pursuant to Xxxxxx Xxx guidelines and
applicable state law with respect to Mortgaged Properties for which no
satisfactory arrangements can be made for collection of delinquent payments. The
Seller shall use its best efforts to realize upon defaulted Mortgage Loans in
such manner as will maximize the receipt of principal and interest by the
Purchaser, taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which the Mortgaged Property shall have suffered damage, the Seller shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion (i) that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan to the Purchaser after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Seller through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property, as contemplated in Section 4.05. The Seller
shall notify the Purchaser in writing (which may be by electronic mail) of the
commencement of foreclosure proceedings. The Seller shall be responsible for all
costs and expenses incurred by it in any such proceedings or functions;
provided, however, that it shall be entitled to reimbursement thereof from the
related property, as contemplated in Section 4.05. Notwithstanding anything to
the contrary contained herein, in connection with a foreclosure or acceptance of
a deed in lieu of foreclosure, in the event the Seller has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Purchaser otherwise requests an environmental
inspection or review of such Mortgaged Property, such an inspection or review is
to be conducted by a qualified inspector at the Purchaser's expense. Upon
completion of the inspection, the Seller shall promptly provide the Purchaser
with a written report of the environmental inspection. After reviewing the
environmental inspection report, the Purchaser shall determine how the Seller
shall proceed with respect to the Mortgaged Property.
42
In the event that a Mortgage Loan becomes part of a REMIC, and
becomes REO Property, such property shall be disposed of by the Seller, with the
consent of the Purchaser as required pursuant to this Agreement, within three
(3) years after becoming an REO Property, unless the Seller provides to the
trustee under such REMIC an opinion of counsel to the effect that the holding of
such REO Property subsequent to three years after its becoming REO Property,
will not result in the imposition of taxes on "prohibited transactions" as
defined in Section 860F of the Code, or cause the transaction to fail to qualify
as a REMIC at any time that certificates are outstanding. The Seller shall
manage, conserve, protect and operate each such REO Property for the
certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
provisions of the Code. Pursuant to its efforts to sell such property, the
Seller shall either itself or through an agent selected by the Seller, protect
and conserve such property in the same manner and to such an extent as is
customary in the locality where such property is located. Additionally, the
Seller shall provide the Purchaser or any master servicer with information
sufficient to perform the tax withholding and reporting related to Sections 1445
and 6050J of the Code.
Section 4.04. Establishment of Custodial Accounts; Deposits
in Custodial Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts
with a commercial bank, a savings bank or a savings and loan association (which
may be a depository Affiliate of the Seller) which meets the guidelines set
forth by Xxxxxx Mae or Xxxxxxx Mac as an eligible depository institution for
custodial accounts. Each Custodial Account shall be an Eligible Account. Funds
deposited in a Custodial Account may be drawn on in accordance with Section
4.05. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form shown in Exhibit B hereto. The original of such letter
agreement shall be furnished to the Purchaser on the initial Closing Date, and
upon the request of any subsequent purchaser.
The Seller shall deposit in the Custodial Account on a daily basis,
within one (1) Business Day of receipt thereof, and retain therein the following
payments and collections received or made by it subsequent to the Cut-off Date,
or received by it prior to the Cut-off Date but allocable to a period subsequent
thereto, other than in respect of principal and interest on the Mortgage Loans
due on or before the Cut-off Date:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
43
(iv) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 4.08, 4.10 and 4.11, other than
proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Accepted Servicing Practices, the loan
documents or applicable law;
(vi) all Condemnation Proceeds affecting any Mortgaged
Property which are not released to the Mortgagor in accordance with
the Seller's normal servicing procedures, the loan documents or
applicable law;
(vii) any Monthly Advances;
(viii) Compensating Interest, if any, for the month of
distribution. Such deposit shall be made from the Seller's own
funds, without reimbursement therefor;
(ix) all proceeds of any Mortgage Loan repurchased in
accordance with Sections 3.03;
(x) any amounts required to be deposited by the Seller
pursuant to Section 4.11 in connection with the deductible clause in
any blanket hazard insurance policy, such deposit shall be made from
the Seller's own funds, without reimbursement therefor; and
(xi) any amounts required to be deposited in the Custodial
Account pursuant to Section 4.01 or Section 6.02.
The foregoing requirements for deposit in the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
assumption fees and other ancillary fees, to the extent permitted by Section
6.01, need not be deposited by the Seller in the Custodial Account.
The Seller may invest the funds in the Custodial Account in Eligible
Investments designated in the name of the Seller for the benefit of the Seller,
which shall mature not later than the Business Day next preceding the Remittance
Date next following the date of such investment (except that (A) any investment
in the Eligible Institution with which the Custodial Account is maintained may
mature on such Remittance Date and (B) any other investment may mature on such
Remittance Date if the Seller shall advance funds on such Remittance Date,
pending receipt thereof to the extent necessary to make distributions to the
Purchaser) and shall not be sold or disposed of prior to maturity.
Notwithstanding anything to the contrary herein and above, all income and gain
realized from any such investment shall be for the benefit of the Seller and
shall be subject to withdrawal by the Seller from the Custodial Account pursuant
to Section 4.05(iv). The amount of any losses incurred in respect of any such
investments shall be deposited in the Custodial Account by the Seller out of its
own funds immediately as realized.
44
Section 4.05. Permitted Withdrawals From the Custodial
Account.
The Seller may, from time to time, withdraw from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in
the manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances, the Seller's
right to reimburse itself pursuant to this subclause (ii) being
limited to amounts received on the related Mortgage Loan which
represent late collections (net of the related Servicing Fee) of
principal and/or interest respecting which any such advance was
made, it being understood that, in the case of such reimbursement,
the Seller's right thereto shall be prior to the rights of the
Purchaser, except that, where the Seller is required to repurchase a
Mortgage Loan, pursuant to Section 3.03, the Seller's right to such
reimbursement shall be subsequent to the payment to the Purchaser of
the Repurchase Price pursuant to such Section and all other amounts
required to be paid to the Purchaser with respect to such Mortgage
Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances
and any unpaid Servicing Fees, the Seller's right to reimburse
itself pursuant to this subclause (iii) with respect to any Mortgage
Loan being limited to related proceeds from Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and REO Disposition
Proceeds;
(iv) to pay to itself as part of its servicing compensation:
(a) any interest earned on funds or any investment earnings in the
Custodial Account net of any losses on such investments (all such
amounts to be withdrawn monthly not later than each Remittance
Date), and (b) to the extent not otherwise retained, the Servicing
Fee from that portion of any payment or recovery as to interest with
respect to a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that
has been repurchased pursuant to Section 3.03 all amounts received
thereon and not distributed as of the date on which the related
Repurchase Price is determined;
(vi) to reimburse itself for unreimbursed Monthly Advances and
Servicing Advances to the extent not fully reimbursed pursuant to
Section 4.05(ii) or (iii) above;
(vii) to transfer funds to another Eligible Account in
accordance with Section 4.09 hereof;
(viii) to remove funds inadvertently placed in the Custodial
Account by the Seller or for which amounts previously deposited are
returned unpaid by the related Mortgagor's banking institution; and
45
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 4.06. Establishment of Escrow Accounts; Deposits in
Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. Each Escrow Account shall be an Eligible
Account. Funds deposited in the Escrow Account may be drawn on by the Seller in
accordance with Section 4.07. The creation of any Escrow Account shall be
evidenced by a letter agreement in the form shown in Exhibit C. The original of
such letter agreement shall be furnished to the Purchaser on the initial Closing
Date, and upon request to any subsequent purchaser.
The Seller shall deposit in the Escrow Account or Accounts on a
daily basis, within two (2) Business Days of receipt thereof, and retain
therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items
as required under the terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow
Payments are insufficient to cover escrow disbursements.
The Seller shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be as set forth or in accordance with Section 4.07. The Seller
shall be entitled to retain any interest paid on funds deposited in an Escrow
Account by the depository institution other than interest on escrowed funds
required by law to be paid to the Mortgagor and, to the extent required by law,
the Seller shall pay interest on escrowed funds to the Mortgagor notwithstanding
that such Escrow Account is non-interest bearing or that interest paid thereon
is insufficient for such purposes.
Section 4.07. Permitted Withdrawals From the Escrow Account.
Withdrawals from the Escrow Account may be made by the Seller only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, Primary Mortgage Insurance Policy
premiums, if applicable, fire and hazard insurance premiums,
condominium assessments and comparable items for the related
Mortgage;
(ii) to reimburse the Seller for any Servicing Advance made by
the Seller with respect to a related Mortgage Loan but only from
amounts received on
46
the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be
determined to be overages;
(iv) for transfer to the Custodial Account in accordance with
the terms of this Agreement;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Seller, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the
Escrow Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement;
(viii) to pay to the Mortgagors or other parties Insurance
Proceeds deposited in accordance with Section 4.06;
(ix) to remove funds inadvertently placed in the Escrow
Account by the Seller or for which amounts previously deposited are
returned unpaid by the related Mortgagor's banking institution; and
(x) to clear and terminate the Escrow Account upon the
termination of this Agreement.
Section 4.08. Payment of Taxes, Insurance and Charges;
Maintenance of Primary Mortgage Insurance; Collections Thereunder.
With respect to each Mortgage Loan, the Seller shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of primary mortgage insurance premiums (if any) and fire
and hazard insurance coverage and shall obtain, from time to time, all bills for
the payment of such charges, including renewal premiums and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Seller in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage or applicable law. To the extent that
the Mortgage does not provide for Escrow Payments, the Seller shall determine
that any such payments are made by the Mortgagor at the time they first become
due. The Seller assumes full responsibility for the timely payment of all ground
rents, taxes, assessments, water rates and other charges and shall effect timely
payments of all such bills irrespective of the Mortgagor's faithful performance
in the payment of same or the making of the Escrow Payments and shall make
advances from its own funds to effect such payments subject to its ability to
recover such Servicing Advances pursuant to Sections 4.05(ii), (iii) and (vi).
Notwithstanding the foregoing, if the Seller reasonably determines that any such
Servicing Advance would not be recoverable from amounts collected on the related
Mortgage Loan, the Seller shall have no
47
obligation to make such Servicing Advance. Any such determination shall be
evidenced by an Officer's Certificate delivered to the Purchaser indicating the
reasons therefor.
The Seller will maintain in full force and effect Primary Mortgage
Insurance Policies issued by a Qualified Insurer with respect to each first lien
Mortgage Loan for which such coverage is herein required. Such coverage will be
maintained until the Loan-to-Value ratio of the related Mortgage Loan is reduced
to the amount for which Xxxxxx Mae no longer requires such insurance to be
maintained. The Seller will not cancel or refuse to renew any Primary Mortgage
Insurance Policy in effect on the related Closing Date that is required to be
kept in force under this Agreement unless a replacement Primary Mortgage
Insurance Policy for such canceled or non-renewed policy is obtained from and
maintained with a Qualified Insurer. The Seller shall not take any action which
would result in non-coverage under any applicable Primary Mortgage Insurance
Policy of any loss which, but for the actions of the Seller would have been
covered thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 6.01, the Seller shall
promptly notify the insurer under the related Primary Mortgage Insurance Policy,
if any, of such assumption or substitution of liability in accordance with the
terms of such policy and shall take all actions which may be required by such
insurer as a condition to the continuation of coverage under the Primary
Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy is
terminated as a result of such assumption or substitution of liability, the
Seller shall obtain a replacement Primary Mortgage Insurance Policy as provided
above.
In connection with its activities as servicer, the Seller agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such Primary Mortgage Insurance Policy and, in this
regard, to take such action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policy respecting a defaulted first lien Mortgage
Loan. Pursuant to Section 4.04, any amounts collected by the Seller under any
Primary Mortgage Insurance Policy shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 4.05.
Section 4.09. Transfer of Accounts.
The Seller may transfer a Custodial Account or an Escrow Account to
a different Eligible Account from time to time. Such transfer shall be made only
upon providing notice of the transfer to the Purchaser.
Section 4.10. Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is acceptable to Xxxxxx Xxx or
Xxxxxxx Mac and customary in the area where the Mortgaged Property is located in
an amount which is equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan, and (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the
mortgagee from becoming a co-insurer. If required by the Flood Disaster
Protection Act of 1973, as amended, each Mortgage Loan shall be covered by a
flood insurance policy meeting the requirements of
48
the current guidelines of the Federal Insurance Administration in effect with an
insurance carrier acceptable to Xxxxxx Mae or Xxxxxxx Mac, in an amount
representing coverage not less than the least of (i) the outstanding principal
balance of the Mortgage Loan, (ii) the maximum insurable value of the
improvements securing such Mortgage Loan and (iii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973, as
amended. If at any time during the term of the Mortgage Loan, the Seller
determines in accordance with applicable law and pursuant to the Xxxxxx Mae
Guides that a Mortgaged Property is located in a special flood hazard area and
is not covered by flood insurance or is covered in an amount less than the
amount required by the Flood Disaster Protection Act of 1973, as amended, the
Seller shall notify the related Mortgagor that the Mortgagor must obtain such
flood insurance coverage, and if the related Mortgagor fails to obtain the
required flood insurance coverage within forty-five (45) days after such
notification, the Seller shall immediately force place the required flood
insurance on the Mortgagor's behalf. To the extent the payment of the related
premiums will not, in the Seller's reasonable determination, constitute
non-recoverable Servicing Advances, the Seller shall also maintain on each REO
Property, fire and hazard insurance with extended coverage in an amount which is
at least equal to the maximum insurable value of the improvements which are a
part of such property, and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in an amount as
provided above. Any amounts collected by the Seller under any such policies
other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or REO Property, or released to
the Mortgagor in accordance with Accepted Servicing Practices, shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05. It is understood and agreed that no other additional insurance need be
required by the Seller or maintained on property acquired in respect of the
Mortgage Loan, other than pursuant to this Agreement, the Xxxxxx Xxx Guides or
such applicable state or federal laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Seller and its
successors and/or assigns and shall provide for at least thirty (30) days prior
written notice of any cancellation, reduction in the amount or material change
in coverage to the Seller. The Seller shall not interfere with the Mortgagor's
freedom of choice in selecting either his insurance carrier or agent, provided,
however, that the Seller shall not accept any such insurance policies from
insurance companies unless such companies are Qualified Insurers.
Section 4.11. Maintenance of Mortgage Impairment Insurance
Policy.
In the event that the Seller (or an Affiliate of the Seller) shall
obtain and maintain a blanket policy issued by an issuer acceptable to Xxxxxx
Mae or Xxxxxxx Mac insuring against hazard losses on all of the Mortgage Loans,
then, to the extent such policy provides coverage in an amount equal to the
amount required pursuant to Section 4.10 and otherwise complies with all other
requirements of Section 4.10, it shall conclusively be deemed to have satisfied
its obligations as set forth in Section 4.10, it being understood and agreed
that such policy may contain a deductible clause, in which case the Seller
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with Section 4.10, and
there shall have been a loss which would have been covered by such policy,
deposit in the Custodial Account the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as servicer of the Mortgage Loans, the Seller agrees to prepare and
present, on behalf of the Purchaser, claims under any
49
such blanket policy in a timely fashion in accordance with the terms of such
policy. Upon request of the Purchaser, the Seller shall cause to be delivered to
the Purchaser a certified true copy of such policy and shall use commercially
reasonable efforts to obtain a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser.
Section 4.12. Maintenance of Fidelity Bond and Errors and
Omissions Insurance.
The Seller shall maintain, at its own expense, a blanket Fidelity
Bond and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loans to handle funds, money, documents and
papers relating to the Mortgage Loans. The Fidelity Bond shall be in the form of
a mortgage banker's blanket bond and shall protect and insure the Seller against
losses, including forgery, theft, embezzlement and fraud of such persons. The
errors and omissions insurance shall protect and insure the Seller against
losses arising out of errors and omissions and negligent acts of such persons.
Such errors and omissions insurance shall also protect and insure the Seller
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.12 requiring the Fidelity Bond
or errors and omissions insurance shall diminish or relieve the Seller from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
corresponding amounts required by Xxxxxx Mae in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac in the Xxxxxxx Mac Guides. The Seller shall deliver to the Purchaser
a certificate from the surety and the insurer as to the existence of the
Fidelity Bond and errors and omissions insurance policy and shall obtain a
statement from the surety and the insurer that such Fidelity Bond or insurance
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser. Upon request by the Purchaser,
the Seller shall provide the Purchaser with an insurance certificate certifying
coverage under this Section 4.12, and will provide an update to such certificate
upon request, or upon renewal or material modification of coverage.
Section 4.13. Title, Management and Disposition of REO
Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure, by deed in lieu of foreclosure or other method resulting in full or
partial satisfaction of the related Mortgage, the deed or certificate of sale
shall be taken in the name of the Purchaser or its designee, or in the event the
Purchaser or its designee is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such Person
or Persons as shall be consistent with an Opinion of Counsel obtained by the
Seller, at the expense of the Purchaser, from an attorney duly licensed to
practice law in the state where the REO Property is located. Any Person or
Persons holding such title other than the Purchaser shall acknowledge in writing
that such title is being held as nominee for the benefit of the Purchaser.
50
The Seller shall notify the Purchaser in accordance with the Xxxxxx
Mae Guides of each acquisition of REO Property upon such acquisition, and
thereafter assume the responsibility for marketing such REO Property in
accordance with Accepted Servicing Practices. Thereafter, the Seller shall
continue to provide certain administrative services to the Purchaser relating to
such REO Property as set forth in this Section 4.13.
The Seller shall, either itself or through an agent selected by the
Seller, and in accordance with the Xxxxxx Xxx Guides manage, conserve, protect
and operate each REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. The Seller shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually thereafter or more frequently as required by the
circumstances. The Seller shall make or cause to be made a written report of
each such inspection. Such reports shall be retained in the Servicing File.
The Seller shall use its best efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event within three
(3) years after title has been taken to such REO Property, unless the Seller
determines, and gives an appropriate notice to the Purchaser to such effect,
that a longer period is necessary for the orderly liquidation of such REO
Property. If a longer period than three (3) years is permitted under the
foregoing sentence and is necessary to sell any REO Property, the Seller shall
report monthly to the Purchaser as to the progress being made in selling such
REO Property. If as of the date title to any REO Property was acquired by the
Seller there were outstanding unreimbursed Servicing Advances with respect to
the REO Property, the Seller shall be entitled to immediate reimbursement from
the Purchaser for any related unreimbursed Servicing Advances. The disposition
of REO Property shall be carried out by the Seller at such price, and upon such
terms and conditions, as the Seller deems to be in the best interests of the
Purchaser. The Seller shall update the Purchaser from time-to-time as to the
status of each REO Property.
Section 4.14. Notification of Maturity Date.
With respect to each Mortgage Loan, the Seller shall execute and
deliver to the Mortgagor any and all necessary notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
maturity date if required under applicable law.
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01. Distributions.
On each Remittance Date, the Seller shall distribute by wire
transfer to the Purchaser (i) all amounts credited to the Custodial Account as
of the close of business on the preceding Determination Date, net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05, plus
(ii) all Monthly Advances, if any, which the Seller is obligated to distribute
pursuant to Section 5.03, plus (iii) all payments in respect of Compensating
Interest for
51
such Remittance Date required to be deposited in the Custodial Account pursuant
to Section 4.04(viii), minus (iv) any amounts attributable to Monthly Payments
collected but due on a Due Date or Dates subsequent to the preceding
Determination Date, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts, and any Principal Prepayments
received during the month of such Remittance Date, which amounts shall be
remitted on the next succeeding Remittance Date.
With respect to any remittance received by the Purchaser after the
Business Day following the Business Day on which such payment was due, the
Seller shall pay to the Purchaser interest on any such late payment at an annual
rate equal to the Prime Rate, adjusted as of the date of each change, plus two
percentage points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account by the
Seller on the date such late payment is made and shall cover the period
commencing with the day following the second Business Day on which such payment
was due and ending with the Business Day on which such payment is made, both
inclusive. Such interest shall be remitted along with the distribution payable
on the next succeeding Remittance Date. The payment by the Seller of any such
interest shall not be deemed an extension of time for payment or a waiver of any
Event of Default by the Seller.
Section 5.02. Statements to the Purchaser.
The Seller shall furnish to the Purchaser an individual loan
accounting report, as of the last Business Day of each month, in the Seller's
assigned loan number order to document Mortgage Loan payment activity on an
individual Mortgage Loan basis. With respect to each month, the corresponding
individual loan accounting report shall be received by the Purchaser no later
than the fifth (5th) Business Day of the following month in a format mutually
agreed upon by both the Purchaser and the Seller and in hard copy, which report
shall contain the following:
(i) with respect to each Monthly Payment, the amount of such
remittance allocable to principal (including a separate breakdown of
any Principal Prepayment, including the date of such prepayment, and
any Prepayment Penalties or premiums, along with a detailed report
of interest on principal prepayment amounts remitted in accordance
with Section 4.04);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the
Seller during the prior collection period;
(iv) the aggregate Scheduled Principal Balance of the Mortgage
Loans;
(v) the aggregate of any expenses reimbursed to the Seller
during the prior distribution period pursuant to Section 4.05;
(vi) the number and aggregate outstanding principal balances
of Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89
days, and (3) 90
52
days or more; (b) as to which foreclosure has commenced; and (c)
as to which REO Property has been acquired; and
(vii) the amount of any Monthly Advances.
The Seller shall also provide a monthly servicing report, sorted in
the Purchaser's assigned loan number order, in the form of reports S-50Y and
P-4DL, attached hereto as Exhibit G and Exhibit H, respectively (or in such
other forms as the Purchaser and the Seller may agree), with each such report.
The Seller shall prepare and file any and all information statements
or other filings required to be delivered to any governmental taxing authority
or to the Purchaser pursuant to any applicable law with respect to the Mortgage
Loans and the transactions contemplated hereby. In addition, the Seller shall
provide the Purchaser with such information concerning the Mortgage Loans as is
necessary for the Purchaser to prepare its federal income tax return as the
Purchaser may reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each
calendar year, the Seller shall furnish to each Person who was a Purchaser at
any time during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
Section 5.03. Monthly Advances by the Seller.
Not later than the close of business on the Business Day preceding
each Remittance Date, the Seller shall deposit in the Custodial Account an
amount equal to all Monthly Payments, whether or not deferred pursuant to
Section 4.01, which were due on a Mortgage Loan on the immediately preceding Due
Date and delinquent at the close of business on the related Determination Date.
The Seller's obligation to make such Monthly Advances as to any
Mortgage Loan will continue through the earlier of: (i) the date of the
termination or resignation, as applicable, of the Seller pursuant to Section
7.04, 8.01 or 9.01 or (ii) the date of final disposition and liquidation of the
related Mortgage Loan or any Mortgaged Property acquired through foreclosure or
a conveyance in lieu of foreclosure, unless the Seller reasonably believes such
advance to be non-recoverable from proceeds of the related Mortgage Loan. In
such event, the Seller shall deliver to the Purchaser an Officer's Certificate
of the Seller to the effect that an officer of the Seller has reviewed the
related Servicing File and has made the reasonable determination that any
additional advances are non-recoverable from proceeds of the related Mortgage
Loan.
Section 5.04. Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of foreclosure,
the Seller shall submit to the Purchaser a liquidation report with respect to
such Mortgaged Property. The Seller shall also provide reports on the status of
REO Property containing such information as the Purchaser may reasonably
require.
53
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. Assumption Agreements.
The Seller shall, to the extent it has knowledge of any conveyance
or prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that the
Seller shall not exercise any such rights if prohibited by law or the terms of
the Mortgage Note from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Seller reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, the Seller will enter into an
assumption agreement with the person to whom the Mortgaged Property has been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
law, the Mortgagor remains liable thereon. If the Seller is prohibited under
applicable law from (a) entering into an assumption agreement with the Person to
whom the Mortgaged Property has been conveyed or is proposed to be conveyed or
(b) requiring the original Mortgagor to remain liable under the Mortgage Note,
the Seller, with the prior consent of the primary mortgage insurer, if any, is
authorized to enter into a substitution of liability agreement with the person
to whom the Mortgaged Property has been conveyed or is proposed to be conveyed
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as mortgagor and becomes liable under the related Mortgage
Note. Any such substitution of liability agreement shall be in lieu of an
assumption agreement.
In connection with any such assumption or substitution of liability,
the Seller shall follow the underwriting practices and procedures of the Xxxxxx
Mae Guides. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate borne by the related Mortgage Note and the amount of the
Monthly Payment may not be changed. If the credit of the proposed transferee
does not meet such underwriting criteria, the Seller diligently shall, to the
extent permitted by the Mortgage or the Mortgage Note and by applicable law,
accelerate the maturity of the Mortgage Loan. The Seller shall notify the
Purchaser that any such substitution of liability or assumption agreement has
been completed by forwarding to the Purchaser the original of any such
substitution of liability or assumption agreement, which document shall be added
to the related Mortgage File and shall, for all purposes, be considered a part
of such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. All fees collected by the Seller for entering into
an assumption or substitution of liability agreement shall belong to the Seller
as additional servicing compensation.
Notwithstanding the foregoing paragraphs of this Section or any
other provision of this Agreement, the Seller shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of
any assumption of a Mortgage Loan by operation of law or any assumption which
the Seller may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 6.01, the term "assumption" is deemed to also
include
54
a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Seller of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Seller will immediately notify the Purchaser by
a certification, which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Custodial Account pursuant to Section
4.04 have been or will be so deposited, of a Servicing Officer and shall request
delivery to it of the portion of the Mortgage File held by the Purchaser. The
Purchaser shall no later than five (5) Business Days after receipt of such
certification and request, release or cause to be released to the Seller, the
related Mortgage Loan Documents and, upon its receipt of such documents, the
Seller shall promptly prepare and deliver to the Purchaser the requisite
satisfaction or release. No later than three (3) Business Days following its
receipt of such satisfaction or release, the Purchaser shall deliver, or cause
to be delivered, to the Seller the release or satisfaction properly executed by
the owner of record of the applicable Mortgage or its duly appointed attorney in
fact. If such Mortgage Loan is a MERS Mortgage Loan, the Seller is authorized to
cause the removal from the registration on the MERS System of such Mortgage and
to execute and deliver, on behalf of the Purchaser, any and all instruments of
satisfaction or cancellation or of partial or full release.
In the event the Seller satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
Mortgage Loan Documents, the Seller, upon written demand, shall remit within two
(2) Business Days to the Purchaser the then outstanding principal balance of the
related Mortgage Loan by deposit thereof in the Custodial Account.
From time to time and as appropriate for the servicing or
foreclosure of the Mortgage Loans, including for the purpose of collection under
any Primary Mortgage Insurance Policy, the Purchaser shall, upon request of the
Seller and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the portion of the Mortgage File held by the
Purchaser to the Seller. Such servicing receipt shall obligate the Seller to
return such Mortgage Loan Documents to the Purchaser when the need therefor by
the Seller no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Custodial Account or the Mortgage File has been delivered to an attorney, or
to a public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the Seller has
delivered to the Purchaser a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File was delivered and
the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated, the servicing
receipt shall be released by the Purchaser to the Seller.
55
Section 6.03. Servicing Compensation.
As compensation for its services hereunder, the Seller shall be
entitled to the Servicing Fee. Additional servicing compensation in the form of
assumption fees, as provided in Section 6.01, late payment charges, interest and
investment earning on funds on deposit in the Custodial Account and Escrow
Account (to the extent provided for herein) and other ancillary income shall be
retained by the Seller to the extent not required to be deposited in the
Custodial Account. The Seller shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided for herein.
Section 6.04. Annual Statement as to Compliance.
On or prior to March 15th of each year for each year in which the
Purchaser or an Affiliate of the Purchaser is required to file an annual report
on Form 10-K in connection with any Securitization Transfer with the United
States Securities and Exchange Commission (the "SEC"), and upon request of the
Purchaser for any other year, the Seller will deliver to the Purchaser an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Seller during the preceding calendar year and of
performance under this Agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Seller has fulfilled all of its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officers and the nature and status
thereof. The first Officer's Certificate delivered by the Seller to the
Purchaser pursuant to this Section shall be delivered on or before March 15,
2005, or such other date as may be required pursuant to the first sentence of
this Section 6.04. Copies of such statement shall be provided by the Seller to
the Purchaser upon request.
Section 6.05. Annual Independent Certified Public
Accountants' Servicing Report.
On or prior to March 15th of each year for each year in which the
Purchaser or an Affiliate of the Purchaser is required to file an annual report
on Form 10-K in connection with any Securitization Transfer with the SEC, and
upon request of the Purchaser for any other year, the Seller at its expense
shall cause a firm of independent public accountants which is a member of the
American Institute of Certified Public Accountants to furnish a statement to the
Purchaser to the effect that such firm has examined certain documents and
records relating to the Seller's servicing of residential mortgage loans, and
that, on the basis of such an examination, conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers, such firm is
of the opinion that the Seller's servicing has been conducted in compliance with
such programs, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. The first statement delivered by the Seller to the Purchaser pursuant
to this Section shall be delivered on or before March 15, 2005, or such other
date as may be required pursuant to the first sentence of this Section 6.05.
Copies of such statement shall be provided by the Seller to the Purchaser.
56
Section 6.06. Purchaser's Right to Examine Seller Records.
At its expense, the Purchaser shall have the right to examine and
audit upon reasonable notice to the Seller, during business hours or at such
other times as might be reasonable under applicable circumstances, any and all
of the books, records, documentation or other information of the Seller, or held
by another for the Seller or on its behalf or otherwise, which relates to the
performance or observance by the Seller of the terms, covenants or conditions of
this Agreement.
The Seller shall provide to the Purchaser and any supervisory agents
or examiners representing a state or federal governmental agency having
jurisdiction over the Purchaser, including but not limited to, OCC, OTS, FDIC
and other similar entities, access to any documentation regarding the Mortgage
Loans in the possession of the Seller which may be required by any applicable
regulations. Such access shall be afforded without charge, upon reasonable
request, during normal business hours and at the offices of the Seller, and in
accordance with the federal government, OCC, FDIC, OTS, or any other similar
regulations; provided, however, that in connection with providing such access,
the Seller shall not be required to incur any out-of-pocket costs unless
provisions have been made for the reimbursement thereof.
Section 6.07. Seller Shall Provide Information as Reasonably
Required.
The Seller shall furnish to the Purchaser during the term of this
Agreement such periodic, special or other reports, information or documentation
as the Purchaser may reasonably request, as shall be necessary, reasonable or
appropriate in respect to the Mortgage Loans and the performance of the Seller
under this Agreement, including any reports, information or documentation
reasonably required to comply with any regulations regarding any supervisory
agents or examiners of the Purchaser; provided, that, the Seller shall not be
liable for any out-of-pocket costs with respect to the provision of such
reports, information or documentation. All such reports or information shall be
provided by and in accordance with such applicable instructions and directions
as the Purchaser may reasonably request in relation to this Agreement or the
performance of the Seller under this Agreement. The Seller agrees to execute and
deliver all such instruments and take all such action as the Purchaser, from
time to time, may reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement.
The Seller, upon reasonable advance notice, shall make reasonably
available to the Purchaser or any prospective purchaser a knowledgeable
financial or accounting officer for the purpose of answering questions and to
permit any prospective purchaser to inspect the Seller's servicing facilities
for the purpose of satisfying such prospective purchaser that the Seller has the
ability to service the Mortgage Loans as provided in this Agreement.
The Seller shall maintain with respect to each Mortgage Loan and
shall make available for inspection by the Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.
57
ARTICLE VII
THE SELLER
Section 7.01. Indemnification; Third Party Claims.
The Seller agrees to indemnify and hold the Purchaser and its
present and former directors, officers, employees and agents harmless from any
and all claims, losses, damages, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses that any of
such parties may sustain in any way related to the failure of the Seller to
observe and perform its duties, obligations, covenants, and agreements and to
service the Mortgage Loans in compliance with the terms of this Agreement or as
a result of the breach of a representation or warranty set forth in Sections
3.01 or 3.02 of this Agreement. The Seller hereunder shall immediately notify
the Purchaser if a claim is made by a third party with respect to this Agreement
or a Mortgage Loan, assume (with the consent of the Purchaser) the defense of
any such claim and pay all expenses in connection therewith, including counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against it or the Purchaser in respect of such claim. The Seller
shall follow any written instructions received from the Purchaser in connection
with such claim. The Purchaser shall promptly reimburse the Seller for all
amounts advanced by it pursuant to the two preceding sentences except when the
claim relates to the failure of the Seller to service and administer the
Mortgage Loans in compliance with the terms of this Agreement, the failure of
the Seller to perform its duties and obligations pursuant to this Agreement, the
breach of representation or warranty set forth in Sections 3.01 or 3.02, or the
gross negligence, bad faith or willful misconduct of the Seller. The provisions
of this Section 7.01 shall survive termination of this Agreement and transfer of
the related servicing rights.
Section 7.02. Merger or Consolidation of the Seller.
The Seller shall keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated
(including by means of sale or disposal of all or substantially all of the
Seller's assets), or any corporation resulting from any merger, conversion or
consolidation to which the Seller shall be a party, or any Person succeeding to
the business of the Seller, shall be the successor of the Seller hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person shall be an
institution whose deposits are insured by FDIC or a company whose business is
the origination and servicing of mortgage loans, unless otherwise consented to
by the Purchaser, which consent shall not be unreasonably withheld, and shall be
qualified and in good standing to service mortgage loans on behalf of Xxxxxx Xxx
or Xxxxxxx Mac.
58
Section 7.03. Limitation on Liability of the Seller and Others.
The duties and obligations of the Seller shall be determined solely
by the express provisions of this Agreement, the Seller shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Seller. Neither the Seller nor any of the
officers, employees or agents of the Seller shall be under any liability to the
Purchaser for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement, or for errors in judgment made in good
faith; provided, however, that this provision shall not protect the Seller or
any such person against any breach of warranties or representations made herein,
or failure to perform its obligations in compliance with any standard of care
set forth in this Agreement, or any liability which would otherwise be imposed
by reason of negligence, bad faith or willful misconduct, or any breach of the
terms and conditions of this Agreement. The Seller and any officer, employee or
agent of the Seller may rely in good faith on any document of any kind prima
facie properly executed and submitted by the Purchaser respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
reasonable opinion may involve it in any expenses or liability.
Section 7.04. Seller Not to Resign.
The Seller shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Seller and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Seller. Any such
determination permitting the resignation of the Seller shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Seller's responsibilities and obligations hereunder in the manner provided in
Section 11.01.
Section 7.05. No Transfer of Servicing.
With respect to the retention of the Seller to service the Mortgage
Loans hereunder, the Seller acknowledges that the Purchaser has acted in
reliance upon the Seller's independent status, the adequacy of its servicing
facilities, plan, personnel, records and procedures, its integrity, reputation
and financial standing and the continuance thereof. Without in any way limiting
the generality of this Section 7.05, the Seller shall not either assign this
Agreement or the servicing hereunder or delegate its rights or duties hereunder
or any portion thereof without the prior written approval of the Purchaser,
which consent may be withheld in the Purchaser's discretion exercised in good
faith. Notwithstanding the foregoing, the Seller may, without the consent of the
Purchaser, retain reasonable and necessary third party contractors to perform
certain servicing and loan administration functions, including and limited to,
hazard insurance administration, tax payment and administration, flood
certification and administration and foreclosure activities; provided, that such
contractors shall perform such servicing and loan administrative functions in a
manner consistent with this Agreement; provided, further, that the retention of
such contractors by Seller shall not limit the obligation of
59
the Seller to service the Mortgage Loans pursuant to the terms and conditions of
this Agreement or release it from any of its obligations hereunder.
ARTICLE VIII
DEFAULT
Section 8.01. Events of Default.
In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the Purchaser any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the
date upon which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller by the
Purchaser; or
(ii) failure on the part of the Seller duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Seller set forth in this Agreement, or
which failure continues unremedied for a period of thirty (30) days
after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Seller by the
Purchaser; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Seller and such decree
or order shall have remained in force undischarged or unstayed for a
period of sixty (60) days; or
(iv) the Seller shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller or of or relating
to all or substantially all of its property; or
(v) the Seller shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(vi) the Seller ceases to be approved by Xxxxxx Mae or Xxxxxxx
Mac as a mortgage loan seller and servicer for more than thirty (30)
days; or
(vii) the Seller attempts to assign its right to servicing
compensation hereunder or the Seller attempts, without the consent
of the Purchaser, to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or
any portion thereof in a manner not permitted under this Agreement;
or
60
(viii) the Seller ceases to be (a) licensed to service first
lien residential mortgage loans in each jurisdiction in which a
Mortgaged Property is located and such licensing is required, and
(b) qualified to transact business in any jurisdiction where it is
currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Seller's
ability to perform its obligations hereunder;
then, and in each and every such case, so long as an Event of
Default shall not have been remedied, the Purchaser, by notice in writing to the
Seller may, in addition to whatever rights the Purchaser may have under Sections
3.03 and 7.01 and at law or equity or to damages, including injunctive relief
and specific performance, terminate all the rights and obligations of the Seller
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Seller for the same. On or after the receipt by the
Seller of such written notice of termination, all authority and power of the
Seller under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 12.01. Upon written request from the Purchaser, the Seller shall
prepare, execute and deliver, any and all documents and other instruments, place
in such successor's possession all Servicing Files, and do or accomplish all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise, at the
Seller's sole expense. The Seller agrees to cooperate with the Purchaser and
such successor in effecting the termination of the Seller's responsibilities and
rights hereunder, including, without limitation, the transfer to such successor
for administration by it of all cash amounts which shall at the time be credited
by the Seller to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans or any REO Property.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection
with the termination or resignation (as described in Section 8.04) of the Seller
hereunder, either (i) the successor servicer shall represent and warrant that it
is a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, or (ii) the Seller shall
cooperate with the successor servicer either (x) in causing MERS to execute and
deliver an assignment of Mortgage in recordable form to transfer the Mortgage
from MERS to the Purchaser and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor servicer or (y) in causing MERS to designate on the
MERS(R) System the successor servicer as the servicer of such Mortgage Loan.
61
Section 8.02. Waiver of Defaults.
The Purchaser may waive only by written notice any default by the
Seller in the performance of its obligations hereunder and its consequences.
Upon any such waiver of a past default, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived in writing.
ARTICLE IX
TERMINATION
Section 9.01. Termination.
The respective obligations and responsibilities of the Seller, as
servicer, shall terminate upon (a) the distribution to the Purchaser of the
final payment or liquidation with respect to the last Mortgage Loan (or advances
of same by the Seller); (b) the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure with respect to the last Mortgage
Loan and the remittance of all funds due hereunder or (c) by mutual consent of
the Seller and the Purchaser in writing. Upon written request from the Purchaser
in connection with any such termination, the Seller shall prepare, execute and
deliver, any and all documents and other instruments, place in the Purchaser's
possession all Mortgage Files, and do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise, at the Purchaser's sole expense. The
Seller agrees to cooperate with the Purchaser and such successor in effecting
the termination of the Seller's responsibilities and rights hereunder as
servicer, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Seller to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
ARTICLE X
RECONSTITUTION OF MORTGAGE LOANS
Section 10.01. Reconstitution of Mortgage Loans.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the related Closing Date, on one or more dates
(each, a "Reconstitution Date") at the Purchaser's sole option, the Purchaser
may effect a sale (each, a "Reconstitution") of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxx Mae under its Cash Purchase Program or MBS Program (Special
Servicing Option) (each, a "Xxxxxx Xxx Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
62
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of one
or more Securitization Transfers.
The Purchaser shall use its best efforts to provide notice to the
Seller of each such Reconstitution no later than fifteen (15) calendar days
prior to the related Reconstitution Date, but, in any event, shall provide such
notice to the Seller no later than ten (10) calendar days prior to the related
Reconstitution Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all reasonably acceptable pool purchase contracts, and/or agreements
among the Purchaser, the Seller, Xxxxxx Mae or Xxxxxxx Mac (as the case may be)
and any servicer in connection with a Whole Loan Transfer, a seller's warranties
and servicing agreement or a participation and servicing agreement in form and
substance reasonably acceptable to the parties, and in connection with a
Securitization Transfer, a pooling and servicing agreement in form and substance
reasonably acceptable to the parties or an Assignment and Recognition Agreement
substantially in the form attached hereto as Exhibit D (collectively, the
agreements referred to herein are designated, the "Reconstitution Agreements"),
together with an opinion of counsel with respect to such Reconstitution
Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; and (3) to restate the
representations and warranties set forth in Section 3.01 of this Agreement as of
the related Reconstitution Date, to restate the representations and warranties
set forth in Section 3.02 of this Agreement as of the related Closing Date and
to represent and warrant that the Seller has serviced the Mortgage Loans in
accordance with this Agreement, in each case, as of the settlement or closing
date in connection with such Reconstitution. The Seller shall provide to such
servicer or issuer, as the case may be, and any other participants or purchasers
in such Reconstitution: (i) any and all information and appropriate verification
of information which may be reasonably available to the Seller or its
Affiliates, whether through letters of its auditors and counsel or otherwise, as
the Purchaser or any such other participant shall reasonably request; (ii) such
additional opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Seller as are reasonably believed necessary
by the Purchaser or any such other participant; and (iii) to execute, deliver
and satisfy all conditions set forth in any indemnity agreement required by the
Purchaser or any such participant, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit I. Moreover, the Seller agrees to cooperate with all
reasonable requests made by the Purchaser to effect such Reconstitution. The
Seller shall indemnify the Purchaser, each Affiliate of the Purchaser
participating in the Reconstitution and each Person who controls the Purchaser
or such Affiliate and their respective present and former directors, officers,
employees and agents, and hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that
63
each of them may sustain in any way related to any information provided by or on
behalf of the Seller regarding the Seller or any affiliated servicer, the
Seller's or any affiliated servicer's servicing practices or performance or the
Underwriting Standards set forth in any offering document prepared in connection
with any Reconstitution (the "Seller Information"). For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement. In connection with any Reconstitution, the Purchaser shall
execute an Indemnification and Contribution Agreement substantially in the form
of Exhibit I attached hereto, which in any case, shall provide that the
Purchaser shall indemnify the Seller and each Person who controls the Seller and
its directors, officers, employees and agents, and hold each of them harmless
from and against any losses, damages, penalties, fines, forfeitures, legal fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information,
other than (i) the Seller Information or (ii) any information regarding the
Mortgage Loans set forth in any offering document prepared in connection with
any Reconstitution that is derived from loan-level information provided by the
Seller to the Purchaser, the related depositor or any of their Affiliates, set
forth in any offering document prepared in connection with any Reconstitution.
With respect to any Mortgage Loans sold in a Securitization Transfer
where the Seller is the servicer, the Seller agrees that on or before March 15th
of each year beginning March 15, 2005, the Seller shall deliver to the
depositor, the master servicer (if any) and the trustee for the securitization
trust in the Securitization Transfer, and their officers and directors, a
certification in the form attached as Exhibit J hereto, executed by the senior
officer in charge of servicing at the Seller for use in connection with any Form
10-K to be filed with the SEC with respect to the securitization trust. The
Seller shall indemnify and hold harmless the depositor, the master servicer (if
any) and the trustee, and their respective officers and directors, from and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments and other costs and expenses arising out
of or based upon any breach of the Seller's obligations under this paragraph or
any material misstatement or omission, negligence, bad faith or willful
misconduct of the Seller in connection therewith. If the indemnification
provided for in the preceding sentence is unavailable or insufficient to hold
harmless any indemnified party, then the Seller agrees that it shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities of such indemnified party in such
proportion as is appropriate to reflect the relative fault of such indemnified
party, on the one hand, and the Seller, on the other, in connection with a
breach of the Seller's obligations under this paragraph or any material
misstatement or omission, negligence, bad faith or willful misconduct of the
Seller in connection therewith.
The Purchaser shall reimburse the Seller for any and all
out-of-pocket expenses, costs and fees, including reasonable attorney's fees,
incurred by the Seller in response to requests for information or assistance
under this Section, other than such out-of-pocket expenses, costs and fees,
including reasonable attorney's fees, incurred by the Seller in connection with
fulfilling its obligations hereunder with respect to servicing and administering
the related Mortgage Loans. All Mortgage Loans not sold or transferred pursuant
to a Reconstitution shall remain subject to
64
this Agreement and shall continue to be serviced in accordance with the terms of
this Agreement, and with respect thereto this Agreement shall remain in full
force and effect.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Successor to the Seller.
Prior to termination of Seller's responsibilities and duties under
this Agreement pursuant to Section 7.04, 8.01 or 9.01, the Purchaser shall (i)
succeed to and assume all of the Seller's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 7.02 hereof and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Seller under this Agreement. In connection with such appointment and assumption,
the Purchaser may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as the Purchaser and such successor shall
agree. In the event that the Seller's duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to the aforementioned
Sections, the Seller shall discharge such duties and responsibilities during the
period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which it
is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The resignation or removal of the Seller pursuant to the
aforementioned Sections shall not become effective until a successor shall be
appointed pursuant to this Section and shall in no event relieve the Seller of
the representations and warranties made pursuant to Sections 3.01 and 3.02, the
remedies available under Section 3.03 or the indemnification obligations of the
Seller pursuant to Section 7.01.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Seller and to the Purchaser an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Seller, with like effect as if originally named as a party to
this Agreement. Any termination or resignation of the Seller or this Agreement
pursuant to Section 7.04, 7.05, 8.01 or 9.01 shall not affect any claims that
the Purchaser may have against the Seller arising prior to any such termination
or resignation.
The Seller shall promptly deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Seller shall account for
all funds. The Seller shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Seller. Upon appointment of successor
servicer to the Seller, the Seller shall be reimbursed for unrecovered Servicing
Advances, Monthly Advances and unpaid Servicing Fees which would otherwise have
been recovered by the Seller pursuant to this Agreement but for the appointment
such successor servicer.
Upon a successor's acceptance of appointment as such, the Seller
shall notify by mail the Purchaser of such appointment.
65
Section 11.02. Amendment.
This Agreement may be amended or supplemented from time to time by
written agreement executed by the Purchaser and the Seller.
Section 11.03. Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any of all the
Mortgaged Properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Seller at the Seller's expense on direction of the Purchaser.
Section 11.04. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to its conflict of law
provisions, except to the extent preempted by Federal law. The obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
Section 11.05. Notices.
Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally delivered at or mailed by registered mail, postage prepaid,
and return receipt requested or certified mail, return receipt requested, or
transmitted by telex, telegraph or telecopier and confirmed by a similar mailed
writing, as follows:
(i) if to the Seller:
Wachovia Mortgage Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 28288-1088
Attention: Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Wachovia Mortgage Corporation
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile: (000) 000-0000
(ii) if to the Purchaser:
66
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx - Whole Loan
Operations Manager
Fax: 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with copies to:
Xxxx Xxxxxxxx
Xxxxxx Xxxxxxx - Servicing Oversight
0000 X-Xxx Xxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Fax: 000-000-0000
Email: xxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx - RFPG
1221 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Email: xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 11.06. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of
67
any part, provision, representation or warranty of this Agreement shall deprive
any party of the economic benefit intended to be conferred by this Agreement,
the parties shall negotiate, in good faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
Section 11.07. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 11.08. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as
the singular, and the use of any gender herein shall be deemed to
include the other gender;
(ii) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(iii) 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;
(iv) 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;
(v) the words "herein," "hereof," "hereunder," and other words
of similar import refer to this Agreement as a whole and not to any
particular provision;
(vi) the term "include" or "including" shall mean without
limitation by reason of enumeration; and
(vii) headings of the Articles and Sections in this Agreement
are for reference purposes only and shall not be deemed to have any
substantive effect.
Section 11.09. 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,
68
photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 11.10. Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it
may become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Each of the Purchaser and the
Seller shall employ proper procedures and standards designed to maintain the
confidential nature of such information and the terms of this Agreement, except
to the extent: (a) disclosure of such information and terms is reasonably
believed by such party to be required in connection with regulatory requirements
or other legal requirements relating to its affairs; (b) disclosed to any one or
more of such party's employees, officers, directors, agents, attorneys or
accountants who would have access to the contents of this Agreement and such
data and information in the normal course of the performance of such Person's
duties for such party, to the extent such party has procedures in effect to
inform such Person of the confidential nature thereof; (c) disclosed in a
prospectus, prospectus supplement or private placement memorandum relating to a
securitization of the Mortgage Loans by the Purchaser (or an Affiliate assignee
thereof) or to any Person in connection with the resale or proposed resale of
all or a portion of the Mortgage Loans by such party in accordance with the
terms of this Agreement; and (d) that is reasonably believed by such party to be
necessary for the enforcement of such party's rights under this Agreement.
Section 11.11. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected (i) with respect to MERS Mortgage Loans, at the Purchaser's expense and
(ii) with respect to Mortgage Loans that are not MERS Mortgage Loans, at the
Seller's expense, in each case, in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
Section 11.12. Assignment by Purchaser.
The Purchaser shall have the right, upon notice to the Seller, to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form of Exhibit D hereto, and the
assignee or designee shall accede to the rights and obligations hereunder of the
Purchaser with respect to such Mortgage Loans; provided, however, that, in no
event shall there be any more than three (3) "Purchasers" with respect to any
Mortgage Loan Package. In no event shall the Purchaser sell a partial interest
in any Mortgage Loan without the prior written
69
consent of the Seller, which consent may be granted or withheld in the Seller's
sole discretion. All references to the Purchaser in this Agreement shall be
deemed to include its assignee or designee.
Section 11.13. No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Seller shall be rendered as an independent contractor and not as agent for
Purchaser.
Section 11.14. Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 7.02, this Agreement
shall inure to the benefit of and be binding upon the Seller and the Purchaser
and their respective successors and assigns.
Section 11.15. Entire Agreement.
Each of the parties to this Agreement acknowledges that no
representations, agreements or promises were made to any of the other parties to
this Agreement or any of its employees other than those representations,
agreements or promises specifically contained herein. This Agreement and the
related Purchase Price and Terms Letter set forth the entire understanding
between the parties hereto and shall be binding upon all successors of all of
the parties. In the event of any inconsistency between a Purchase Price and
Terms Letter and this Agreement, this Agreement shall control.
Section 11.16. No Solicitation.
From and after the related Closing Date, except as provided below,
the Seller agrees that it will not take any action or permit or cause any action
to be taken by any of its agents or Affiliates, or by any independent
contractors on the Seller's behalf, in any manner to solicit the borrower or
obligor under any Mortgage Loan to refinance the Mortgage Loan, in whole or in
part, without the prior written consent of the Purchaser. It is understood and
agreed that all rights and benefits relating to the solicitation of any
Mortgagors to refinance any Mortgage Loans and the attendant rights, title and
interest in and to the list of such Mortgagors and data relating to their
Mortgages (including insurance renewal dates) shall be transferred to the
Purchaser pursuant hereto on the related Closing Date and the Seller shall take
no action to undermine these rights and benefits. Notwithstanding the foregoing,
it is understood and agreed that the following promotions or solicitations
undertaken by the Seller or any Affiliate of the Seller shall not be prohibited
under this Section 11.16: (i) promotions or solicitations that are directed to
the general public at large or segments thereof, provided that no segment shall
consist primarily of the borrowers or obligors under the Mortgage Loans,
including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements; (ii) responding
to Mortgagor requests for pay-off information and regarding other bank or
financial products or services; and (iii) promotions or solicitations to any
70
Mortgagor for any other bank or financial products or services, unless such
promotions or solicitations are for a prepayment of a Mortgage Loan.
Section 11.17. Costs.
The Purchaser shall pay any commissions due its salesmen, the
expenses of its accountants and attorneys and the expenses and fees of any
broker retained by the Purchaser with respect to the transactions covered by
this Agreement. To the extent not otherwise provided herein, all other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans, including, without limitation, fees for recording intervening assignments
of mortgage and Assignments of Mortgage, the cost of obtaining tax service
contracts and the legal fees and expenses of its attorneys shall be paid by the
Seller. The Seller shall be responsible for causing the recordation of all
Assignments of Mortgage and all intervening assignments of mortgage, as
applicable.
Section 11.18. Protection of Mortgagor Personal Information.
Each of the Purchaser and the Seller agree that it (i) shall comply
with any applicable laws and regulations regarding the privacy and security of
Mortgagor Personal Information, (ii) shall not use Mortgagor Personal
Information in any manner inconsistent with any applicable laws and regulations
regarding the privacy and security of Mortgagor Personal Information, (iii)
shall not disclose Mortgagor Personal Information to third parties except at the
specific written direction of the other; provided, however, that the Purchaser
and the Seller may disclose Mortgagor Personal Information to third parties in
connection with secondary market transactions to the extent not prohibited by
applicable law or to the extent required by a valid and effective subpoena
issued by a court of competent jurisdiction or other governmental body, (iv)
shall maintain adequate physical, technical and administrative safeguards to
protect Mortgagor Personal Information from unauthorized access and (v) shall
immediately notify the other of any actual or suspected breach of the
confidentiality of Mortgagor Personal Information.
[SIGNATURE PAGE TO FOLLOW]
71
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL
INC.,
as Purchaser
By:
Name:
Title:
WACHOVIA MORTGAGE CORPORATION,
as Seller
By:
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
[Signature Page to Seller's Purchase, Warranties and Servicing Agreement,
dated as of September 1, 2004]
72
Exhibit A-1
-----------
Contents of Mortgage File
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser, and which shall be retained by the Seller in the Servicing File or
delivered to the Purchaser or its designee pursuant to Sections 2.04 and 2.05 of
the Seller's Purchase, Warranties and Servicing Agreement.
1. The original Mortgage Note endorsed "Pay to the order of
___________________ without recourse," and signed in the name of the Seller by
an authorized officer, with all intervening endorsements showing a complete
chain of title from the originator to the Seller. If the Mortgage Loan was
acquired by the Seller in a merger, the endorsement must be by "[Seller],
successor by merger to the [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another name,
the endorsement must be by "[Seller] formerly known as [previous name]". If the
original note is unavailable, seller will provide an affidavit of lost note (in
form acceptable to the Purchaser) stating that the original Mortgage Note was
lost or destroyed, together with a copy of such Mortgage Note and indemnifying
the Purchaser against any and all claims arising as a result of any person or
entity claiming they are the holder of the note or that the note has been paid
off and returned.
2. A true certified copy, certified by the [title insurer], of the
applicable First Lien.
3. Except as provided below and for each Mortgage Loan that is not a
MERS Mortgage Loan, the original Mortgage with evidence of recording thereon, or
a copy thereof certified by the public recording office in which such mortgage
has been recorded or, if the original Mortgage has not been returned from the
applicable public recording office, a true certified copy, certified by the
[title insurer], of the original Mortgage together with a certificate of the
Seller certifying that the original Mortgage has been delivered for recording in
the appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located and in the case of each MERS Mortgage Loan, the
original Mortgage, noting the presence of the MIN of the Mortgage Loans and
either language indicating that the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original Mortgage and the
assignment thereof to MERS, with evidence of recording indicated thereon, or a
copy of the Mortgage certified by the public recording office in which such
Mortgage has been recorded.
4. The original or certified to be a true copy or if in electronic
form identified on the Mortgage Loan Schedule, the certificate number, certified
by the Seller, of the related Primary Mortgage Insurance Policy, if required.
5. In the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original Assignment, from the Seller in accordance with Purchaser's
instructions, which assignment shall, but for any blanks requested by the
Purchaser, be in form and substance acceptable for recording, or a copy
certified by the Seller as a true and correct copy of the original Assignment
which has been sent for recordation. If the Mortgage Loan was acquired or
A-1-1
originated by the Seller while doing business under another name, the Assignment
must be by "[Seller] formerly known as [previous name]".
6. With respect to Mortgage Loans that are not Co-op Loans, the
original policy of title insurance, including riders and endorsements thereto,
or if the policy has not yet been issued, a written commitment or interim binder
or preliminary report of title issued by the title insurance or escrow company.
7. Originals of all recorded intervening Assignments, or copies
thereof, certified by the public recording office in which such Assignments have
been recorded showing a complete chain of title from the originator to the
Seller, with evidence of recording thereon, or a copy thereof certified by the
public recording office in which such Assignment has been recorded or, if the
original Assignment has not been returned from the applicable public recording
office, a true certified copy, certified by the [title insurer] of the original
Assignment together with a certificate of the [title insurer] certifying that
the original Assignment has been delivered for recording in the appropriate
public recording office of the jurisdiction in which the Mortgaged Property is
located.
8. Originals, or copies thereof certified by the public recording
office in which such documents have been recorded, of each assumption,
extension, modification, written assurance or substitution agreements, if
applicable, or if the original of such document has not been returned from the
applicable public recording office, a true certified copy, certified by the
[title insurer], of such original document together with certificate of Seller
certifying the original of such document has been delivered for recording in the
appropriate recording office of the jurisdiction in which the Mortgaged Property
is located.
9. If the Mortgage Note or Mortgage or any other material document
or instrument relating to the Mortgage Loan has been signed by a person on
behalf of the Mortgagor, the original power of attorney or other instrument that
authorized and empowered such person to sign bearing evidence that such
instrument has been recorded, if so required in the appropriate jurisdiction
where the Mortgaged Property is located (or, in lieu thereof, a duplicate or
conformed copy of such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a true and complete
copy of the original and that such original has been or is currently submitted
to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original power
of attorney or other such instrument has been delivered for recording in the
appropriate public recording office of the jurisdiction in which the Mortgaged
Property is located.
10. With respect to a Co-op Loan: (i) a copy of the Co-op Lease and
the assignment of such Co-op Lease to the originator of the Mortgage Loan, with
all intervening assignments showing a complete chain of title and an assignment
thereof by Seller; (ii) the stock certificate together with an undated stock
power relating to such stock certificate executed in blank; (iii) the
recognition agreement in substantially the same form as standard a "AZTECH"
form; (iv) copies of the financial statement filed by the originator as secured
party and, if applicable, a filed UCC-3 Assignment of the subject security
interest showing a complete chain of title, together with an executed UCC-3
Assignment of such security interest by the Seller in a form sufficient for
filing.
A-1-2
11. The original of any guarantee executed in connection with the
Mortgage Note.
Notwithstanding anything to the contrary herein, the Seller may
provide one certificate for all of the Mortgage Loans indicating that the
documents were delivered for recording.
X-0-0
Xxxxxxx X-0
-----------
Contents of Servicing File
With respect to each Mortgage Loan, the Servicing File shall include
each of the following items, which shall be available for inspection by the
Purchaser:
1. Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending or real estate settlement procedure forms required by law.
2. Residential loan application.
3. Uniform underwriter and transmittal summary (Xxxxxx Xxx Form
1008) or reasonable equivalent.
4. Credit report on the mortgagor.
5. Business credit report, if applicable.
6. Residential appraisal report and attachments thereto.
7. Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program, all in accordance with
Seller's Underwriting Standards.
8. Verification of acceptable evidence of source and amount of down
payment, in accordance with the Underwriting Standards.
9. Photograph of the Mortgaged Property (may be part of appraisal).
10. Survey of the Mortgaged Property, if any.
11. Sales contract, if applicable.
12. If available, termite report, structural engineer's report,
water portability and septic certification.
13. Any original security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
14. Any ground lease, including all amendments, modifications and
supplements thereto.
15. Any other document required to service the Mortgage Loans.
A-2-1
Exhibit B
---------
Form of Custodial Account Letter Agreement
__________________ , 200_
To:
As "Seller" under the Seller's Purchase, Warranties and Servicing
Agreement, dated as of September 1, 2004 (the "Agreement"), we hereby authorize
and request you to establish an account, as a Custodial Account pursuant to
Section 4.04 of the Agreement, to be designated as "Wachovia Mortgage
Corporation, in trust for the Purchaser, owner of various whole loan series -
principal and interest". All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Seller. This letter is submitted to
you in duplicate. Please execute and return one original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:__________________________________
Name:________________________________
Title:_______________________________
The undersigned, as "Depository," hereby certifies that the above
described account has been established under Account Number ______________, at
the office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above.
____________________________________
By:__________________________________
Name:________________________________
Title:_______________________________
B-1
Exhibit C
---------
Form of Escrow Account Letter Agreement
_____________________, 200_
To:
As "Seller" under the Seller's Purchase, Warranties and Servicing
Agreement, dated as of September 1, 2004 (the "Agreement"), we hereby authorize
and request you to establish an account, as an Escrow Account pursuant to
Section 4.06 of the Agreement, to be designated as "Wachovia Mortgage
Corporation, in trust for the Purchaser, owner of various whole loan series, and
various Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Seller. This letter is submitted to you in
duplicate. Please execute and return one original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:__________________________________
Name:________________________________
Title:_______________________________
The undersigned, as "Depository," hereby certifies that the above
described account has been established under Account Number ______________, at
the office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above.
____________________________________
By:__________________________________
Name:________________________________
Title:_______________________________
C-1
Exhibit D
---------
Form of Assignment, Assumption and Recognition Agreement
This Assignment, Assumption and Recognition Agreement (this
"Assignment Agreement"), dated as of _________, between [Purchaser], a
[_____________] corporation (the "Assignor"), ______________________, a ________
corporation (the "Assignee"), and Wachovia Mortgage Corporation, a North
Carolina corporation (the "Seller"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the premises and mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all
of the right, title and interest of Assignor, as Purchaser, in, to and under (a)
those certain mortgage loans listed on Exhibit A attached hereto (the "Mortgage
Loans"); and (b) the Seller's Purchase, Warranties and Servicing Agreement dated
as of [_________, 200__], but only to the extent of the Mortgage Loans (the
"Purchase Agreement"). For purposes of this Assignment Agreement, the term
"Purchase Agreement" includes any separate Assignment and Conveyance pursuant to
which Seller and Assignor effectuated the purchase and sale of any Mortgage Loan
following the execution and delivery of the Seller's Purchase, Warranties and
Servicing Agreement dated as of [_________, 200__].
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under any
all obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the Mortgage Loans set forth on Exhibit A
attached hereto and are not the subject of this Assignment Agreement.
2. Each of the Seller and the Assignor represent and warrant to the
Assignee that (a) the copy of the Purchase Agreement, attached hereto as Exhibit
B, provided to the Assignee, is a true, complete and accurate copy of the
Purchase Agreement, (b) the Purchase Agreement is in full force and effect as of
the date hereof, (c) the provisions thereof have not been waived, amended or
modified in any respect, nor have any notices of termination been given
thereunder, (d) the Purchase Agreement contains all of the terms and conditions
governing the sale of the Mortgage Loans by Seller to Assignor and the purchase
of the Mortgage Loans by Assignor from Seller; provided, however, that the date
of purchase and sale and the amount of payment for the Mortgage Loans may be set
out in a Purchase Price and Terms Letter, as defined in the Purchase Agreement,
and (e) Seller sold, conveyed and transferred each Mortgage Loan to Assignor
pursuant to the Purchase Agreement.
3. The Assignor warrants and represents to, and covenants with, the
Assignee and the Seller that:
(a) As of the date hereof, the Assignor is not in default under the
Purchase Agreement;
D-1
(b) The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans and any and all of its interests,
rights and obligations under the Purchase Agreement, free from any and all
claims and encumbrances arising out of the Assignor's ownership thereof, and the
Mortgage Loans, as well as the Purchase Agreement, upon the transfer thereof to
the Assignee as contemplated herein, shall be free and clear of all such liens,
claims and encumbrances or any lien claim or encumbrance arising out of the
ownership of the Mortgage Loans by any person at any time after Assignor first
acquired any Mortgage Loan from the Seller;
(c) The Assignor has not received notice of, and has no knowledge
of, any offsets, counterclaims or other defenses available to the Seller with
respect to the Purchase Agreement or the Mortgage Loans;
(d) The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Purchase Agreement or the
Mortgage Loans. The Assignor has no knowledge of, and has not received notice
of, any waivers under or amendments or other modifications of, or assignments of
rights or obligations under or defaults under, the Purchase Agreement, or the
Mortgage Loans;
(e) The Assignor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
and has all requisite corporate power and authority to sell, transfer and assign
the Mortgage Loans;
(f) The Assignor has full corporate power and authority to execute,
deliver and perform under this Assignment Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions contemplated
by this Assignment Agreement is in the ordinary course of the Assignor's
business and will not conflict with, or result in a breach of, any of the terms,
conditions or provisions of the Assignor's charter or by-laws, or any legal
restriction, or any material agreement or instrument to which the Assignor is
now a party or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Assignor or its
property is subject. The execution, delivery and performance by the Assignor of
this Assignment Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
of the Assignor. This Assignment Agreement has been duly executed and delivered
by the Assignor and constitutes the valid and legally binding obligation of the
Assignor enforceable against the Assignor in accordance with its respective
terms except as enforceability thereof may be limited by bankruptcy, insolvency,
or reorganization or other similar laws now or hereinafter in effect relating to
creditor's rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or in law;
(g) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Assignor in connection with the execution, delivery
or performance by the Assignor of this Assignment Agreement, or the consummation
by it of the transactions contemplated hereby; and
(h) The Assignor has paid the purchase price for the Mortgage Loans
and has satisfied any conditions to closing required of it under the terms of
the Purchase Agreement.
D-2
4. The Assignee warrants and represents to, and covenants with, the
Assignor and the Seller that:
(a) The Assignee is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
and has all requisite corporate power and authority to acquire, own and purchase
the Mortgage Loans;
(b) The Assignee has full corporate power and authority to execute,
deliver and perform under this Assignment Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions contemplated
by this Assignment Agreement is in the ordinary course of the Assignee's
business and will not conflict with, or result in a breach of, any of the terms,
conditions or provisions of the Assignee's charter or by-laws, or any legal
restriction, or any material agreement or instrument to which the Assignee is
now a party or by which it is bound, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Assignee or its
property is subject. The execution, delivery and performance by the Assignee of
this Assignment Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
of the Assignee. This Assignment Agreement has been duly executed and delivered
by the Assignee and constitutes the valid and legally binding obligation of the
Assignee enforceable against the Assignee in accordance with its respective
terms except as enforceability thereof may be limited by bankruptcy, insolvency,
or reorganization or other similar laws now or hereinafter in effect relating to
creditor's rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or in law;
(c) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Assignee in connection with the execution, delivery
or performance by the Assignee of this Assignment Agreement, or the consummation
by it of the transactions contemplated hereby; and
(d) The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Purchase Agreement and the Mortgage
Loans, and from and after the date hereof, the Assignee assumes for the benefit
of each of the Seller and the Assignor all of the Assignor's obligations as
Purchaser thereunder, with respect to the Mortgage Loans.
5. The Seller warrants and represents to, and covenants with, the
Assignor and the Assignee that:
(a) The Seller is not a natural person or a general partnership and
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, and has all requisite power and authority to
service the Mortgage Loans;
(b) The Seller has full power and authority to execute, deliver and
perform under this Assignment Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions contemplated by this
Assignment Agreement is in the ordinary course of the Seller's business and will
not conflict with, or result in a breach of, any of the terms, conditions or
provisions of the Seller's charter or by-laws, or any legal restriction, or any
material agreement or instrument to which the Seller is now a party or by which
it is bound, or
D-3
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject. The execution, delivery and
performance by the Seller of this Assignment Agreement, and the consummation by
it of the transactions contemplated hereby, have been duly authorized by all
necessary corporate action of the Seller. This Assignment Agreement has been
duly executed and delivered by the Seller and constitutes the valid and legally
binding obligation of the Seller enforceable against the Seller in accordance
with its respective terms except as enforceability thereof may be limited by
bankruptcy, insolvency, or reorganization or other similar laws now or
hereinafter in effect relating to creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or in law;
(d) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Seller in connection with the execution, delivery or
performance by the Seller of this Assignment Agreement, or the consummation by
it of the transactions contemplated hereby;
(e) As of the date hereof, the Seller is not in default under the
Purchase Agreement; and
(f) No event has occurred or has failed to occur, during the period
commencing on date on which Assignor acquired the Mortgage Loans and ending on
the date hereof, inclusive, which would make the representations and warranties
set forth in Section 3.01 of the Purchase Agreement untrue if such
representations and warranties were made with respect to the Mortgage Loans
effective as of the date hereof.
6. From and after the date hereof, the Seller shall recognize the
Assignee as the owner of the Mortgage Loans, and shall look solely to the
Assignee for performance from and after the date hereof of the Assignor's
obligations with respect to the Mortgage Loans.
7. Notice Addresses.
(a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
----------------
----------------
----------------
Attention: ________________
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
[-----------------------------]
[-----------------------------]
[-----------------------------]
[-----------------------------]
Attention: _______________
D-4
(c) The Seller's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment Agreement is:
Wachovia Mortgage Corporation
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx Xxxxxx
8. This Assignment Agreement shall be construed in accordance with
the substantive laws of the State of New York (without regard to conflict of
laws principles) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, except to the extent
preempted by federal law.
9. This Assignment Agreement shall inure to the benefit of the
successors and assigns of the parties hereto. Any entity into which the Seller,
the Assignor or the Assignee may be merged or consolidated shall, without the
requirement for any further writing, be deemed the Seller, the Assignor or the
Assignee, respectively, hereunder.
10. No term or provision of this Assignment Agreement may be waived
or modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced.
11. This Assignment Agreement shall survive the conveyance of the
Mortgage Loans and the assignment of the Purchase Agreement by the Assignor.
12. Notwithstanding the assignment of the Purchase Agreement by
either the Assignor or Assignee, this Assignment Agreement shall not be deemed
assigned by the Seller or the Assignor unless assigned by separate written
instrument.
13. For the purpose for facilitating the execution of this
Assignment Agreement as herein provided and for other purposes, this Assignment
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute and be one and the same instrument.
[signatures on following page]
D-5
IN WITNESS WHEREOF, the parties have caused this Assignment
Agreement to be executed by their duly authorized officers as of the date first
above written.
[-----------------------------]
Assignor
By:
Name:
Title:
-----------------------
Assignee
By:
Name:
Title:
Wachovia Mortgage Corporation
Seller
By:
Name:
Title:
D-6
Exhibit E
---------
Form of Assignment and Conveyance
On this ____ day of ________, 200_, Wachovia Mortgage Corporation ("Wachovia")
as the Seller under that certain Seller's Purchase, Warranties and Servicing
Agreement, dated as of September 1, 2004 (the "Agreement"), by and between
Wachovia and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser") does hereby
sell, transfer, assign, set over and convey to the Purchaser under the
Agreement, without recourse, but subject to the terms of the Agreement, all
rights, title and interest of Wachovia (excluding the right to service the
Mortgage Loans) in and to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as Exhibit A, together with the Mortgage Files and all
rights and obligations arising under the documents contained therein. Pursuant
to Section 2.07 of the Agreement, Wachovia has delivered to the Purchaser the
documents for each Mortgage Loan to be purchased as set forth therein. The
contents of each Servicing File required to be retained by Wachovia to service
the Mortgage Loans pursuant to the Agreement and thus not delivered to the
Purchaser are and shall be held in trust by Wachovia, for the benefit of the
Purchaser as the owner thereof. Wachovia's possession of any portion of the
Servicing File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Agreement,
and such retention and possession by Wachovia shall be in a custodial capacity
only. The ownership of each Mortgage Note, Mortgage, and the contents of the
Mortgage File and Servicing File is vested in the Purchaser and the ownership of
all records and documents with respect to the related Mortgage Loan prepared by
or which come into the possession of Wachovia shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by Wachovia at the
will of the Purchaser in such custodial capacity only.
With respect to the Mortgage Loans listed on the Mortgage Loan Schedule attached
hereto as Exhibit A, the term Standard & Poor's Glossary, as used in the
Agreement, shall refer to Version __ of the Standard & Poor's LEVELS(R)
Glossary.
E-1
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Agreement.
WACHOVIA MORTGAGE CORPORATION
By:
Name:
Title:
E-2
Exhibit F
---------
Request for Release of Documents and Receipt
RE: Mortgage Loan #___________________________________
BORROWER: __________________________________________________
PROPERTY: __________________________________________________
Pursuant to a Seller's Purchase, Warranties and Servicing Agreement (the
"Agreement") between the Seller and the Purchaser, the undersigned hereby
certifies that he or she is an officer of the Seller requesting release of the
documents for the reason specified below. The undersigned further certifies
that:
(Check one of the items below)
_____ On _________________, the above captioned mortgage loan was paid in
full or the Seller has been notified that payment in full has been
or will be escrowed. The Seller hereby certifies that all amounts
with respect to this loan which are required under the Agreement
have been or will be deposited in the Custodial Account as required.
_____ The above captioned loan is being repurchased pursuant to the terms
of the Agreement. The Seller hereby certifies that the repurchase
price has been credited to the Custodial Account as required under
the Agreement.
_____ The above captioned loan is being placed in foreclosure and the
original documents are required to proceed with the foreclosure
action. The Seller hereby certifies that the documents will be
returned to the Purchaser in the event of reinstatement.
_____ Other (explain)
__________________________________________________
__________________________________________________
All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Agreement.
F-1
Based on this certification and the indemnities provided for in the Agreement,
please release to the Seller all original mortgage documents in your possession
relating to this loan.
Dated:_________________ By:________________________________
Signature
-----------------------------------
Title
Send documents to: _____________________________________________
_____________________________________________
_____________________________________________
Acknowledgment:
Purchaser hereby acknowledges that all original documents previously released on
the above captioned mortgage loan have been returned and received by the
Purchaser.
Dated:________________ By:________________________________
Signature
Title:____________________________
F-2
Exhibit G
Form of S-50Y Report
G-1
Exhibit H
Form of P-4DL Report
H-1
Exhibit I
Form of Indemnification and Contribution Agreement
This INDEMNIFICATION AND CONTRIBUTION AGREEMENT ("Agreement"),
dated as of [_______], 200_, among [________________] (the "Depositor"), a
[______________] corporation (the "Depositor"), Xxxxxx Xxxxxxx Mortgage
Capital Inc., a New York corporation ("Xxxxxx") and Wachovia Mortgage
Corporation, a [_______________] (the "Seller").
W I T N E S S E T H:
WHEREAS, the Depositor is acting as depositor and registrant with
respect to the Prospectus, dated [________________], and the Prospectus
Supplement to the Prospectus, [________________] (the "Prospectus
Supplement"), relating to [________________] Certificates (the
"Certificates") to be issued pursuant to a Pooling and Servicing Agreement,
dated as of [________________] (the "P&S"), among the Depositor, as
depositor, [________________], as servicer (the "Servicer"), and
[________________], as trustee (the "Trustee");
WHEREAS, as an inducement to the Depositor to enter into the P&S,
and [____________________] (the "Underwriter[s]") to enter into the Underwriting
Agreement, dated [____________________] (the "Underwriting Agreement"), between
the Depositor and the Underwriter[s], and [_______________] (the "Initial
Purchaser[s]") to enter into the Certificate Purchase Agreement, dated
[____________] (the "Certificate Purchase Agreement"), between the Depositor and
the Initial Purchaser[s], Seller has agreed to provide for indemnification and
contribution on the terms and conditions hereinafter set forth;
WHEREAS, Xxxxxx purchased from Seller certain of the Mortgage Loans
underlying the Certificates (the "Mortgage Loans") pursuant to a Seller's
Purchase, Warranties and Servicing Agreement, dated as of [DATE] (the "Sale and
Servicing Agreement"), by and between Xxxxxx and Seller; and
WHEREAS, pursuant to Section 10.01 of the Sale and Servicing
Agreement, the Seller has agreed to indemnify the Depositor, Xxxxxx, the
Underwriter[s], the Initial Purchaser[s] and their respective present and former
directors, officers, employees and agents.
NOW THEREFORE, in consideration of the agreements contained herein,
and other valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Depositor, Xxxxxx and the Seller agree as follows:
1. Indemnification and Contribution.
(a) The Seller agrees to indemnify and hold harmless the Depositor,
Xxxxxx, the Underwriter[s], the Initial Purchaser[s] and their respective
Affiliates and their respective
I-1
present and former directors, officers, employees and agents and each person, if
any, who controls the Depositor, Xxxxxx, the Underwriter[s], the Initial
Purchaser[s] or such Affiliate within the meaning of either Section 15 of the
Securities Act of 1933, as amended (the "1933 Act"), or Section 20 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the 1933 Act, the 1934 Act or other federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based in whole or in part upon any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
Supplement or the Offering Circular or any omission or alleged omission to state
in the Prospectus Supplement or the Offering Circular a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, or any such untrue
statement or omission or alleged untrue statement or alleged omission made in
any amendment of or supplement to the Prospectus Supplement or the Offering
Circular (provided that Xxxxxx has provided the Seller with reasonable advanced
notice of such amendment or supplement and Seller if afforded no fewer than five
(5) Business Days to review and, if required, update, the Seller Information
stated therein) and agrees to reimburse the Depositor, Xxxxxx, the
Underwriter[s], the Initial Purchaser[s] or such Affiliates and each such
officer, director, employee, agent and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that Seller shall be liable in any such case only to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission set forth in or omitted from the Seller Information. The foregoing
indemnity agreement is in addition to any liability which Seller may otherwise
have to the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s]
their Affiliates or any such director, officer, employee, agent or controlling
person of the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s] or
their respective Affiliates.
(b) Xxxxxx agrees to indemnify and hold harmless the Seller and its
present and former directors, officers, employees and agents and each person, if
any, who controls the Seller within the meaning of either Section 15 of the 1933
Act, or Section 20 of the 1934 Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the 1933 Act, the 1934 Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
in whole or in part upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus Supplement or the Offering Circular or
any omission or alleged omission to state in the Prospectus Supplement or the
Offering Circular a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading, or any such untrue statement or omission or alleged untrue
statement or alleged omission made in any amendment of or supplement to the
Prospectus Supplement or the Offering Circular and agrees to reimburse the
Seller and each such officer, director, employee, agent and controlling person
promptly upon demand for any legal or other expenses reasonably incurred by any
of them in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided,
I-2
however, that Xxxxxx shall be liable in any such case only to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission set forth in or omitted from the information set forth in the
Prospectus Supplement or the Offering Circular or any amendment of or supplement
to either Prospectus Supplement or the Offering Circular other than (i) the
Seller Information or (ii) any information regarding the Mortgage Loans set
forth in the Prospectus Supplement or the Offering Circular or any amendment of
or supplement to either that is derived from loan-level information provided by
the Seller to the Purchaser, the Depositor or any of their Affiliates. The
foregoing indemnity agreement is in addition to any liability which Xxxxxx may
otherwise have to the Seller or any such director, officer, employee, agent or
controlling person of the Seller.
As used herein:
"Seller Information" means any information relating to Seller and/or
the underwriting guidelines relating to the Mortgage Loans set forth in the
Prospectus Supplement under the headings [______________] and in the Offering
Circular under the headings [______________] and in each case, provided by the
Seller specifically for use therein.
"Offering Circular" means the offering circular, dated [__________]
relating to the private offering of the [_______________] Certificates.
(c) Promptly after receipt by any indemnified party under this
Section 1 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 1, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided, further, however, that
the failure to notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 1.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, except as provided in
the following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 1 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it
I-3
which are different from or additional to those available to the indemnifying
party and in the reasonable judgment of such counsel it is necessary or
appropriate for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties.
Each indemnified party, as a condition of the indemnity agreements
contained in this Section 1, shall cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 1 is
unavailable to an indemnified party, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities, in such proportion as is appropriate to reflect the relative fault
of the indemnifying party and the indemnified party, respectively, in connection
with the statements or omissions that result in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the indemnified party and indemnifying party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission and any other equitable considerations.
(e) The indemnity and contribution agreements contained in this
Section 1 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by the Depositor,
Xxxxxx, the Underwriter[s], the Initial Purchaser[s], their respective
Affiliates, directors, officers, employees or agents or any person
I-4
controlling the Depositor, Xxxxxx, the Underwriter[s], the Initial
Purchaser[s] or any such Affiliate, and (iii) acceptance of and payment for
any of the Offered Certificates or Private Certificates.
2. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to Seller, will be mailed, delivered or
faxed or emailed and confirmed by mail to Wachovia Mortgage Corporation, 000
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention:
Xxxxxxxx Xxxxx, Fax: (000) 000-0000, with a copy to Wachovia Mortgage
Corporation, 0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xxx Xxxxxx, Fax: (000) 000-0000; if sent to Xxxxxx, xxxx be mailed,
delivered or faxed or emailed and confirmed by mail to Xxxxxx Xxxxxxx Mortgage
Capital Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxxxxxxx - Whole Loans Operations Manager, Fax: [_______], Email:
xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx, with copies to (i) Xxxxxxxx Xxxxx, Xxxxxx
Xxxxxxx - Legal Counsel, Securities, Xxxxxx Xxxxxxx, 1221 Avenue of the
Americas, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax [_____], Email:
xxxxxxxx.xxxxx@xxxxxxxxxxxxx.xxx, and (ii) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx - SPG
Finance, Xxxxxx Xxxxxxx, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Fax [_____],Email: xxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx; if to the Depositor, will
be mailed, delivered or telegraphed and confirmed to [____________________]; or
if to the Underwriter[s], will be mailed, delivered or telegraphed and confirmed
to [_____________________]; or if to the Initial Purchaser[s], will be mailed,
delivered or telegraphed and confirmed to [_____________________].
3. Miscellaneous. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
the conflict of laws provisions thereof. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their successors and
assigns and the controlling persons referred to herein, and no other person
shall have any right or obligation hereunder. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. This Agreement may be
executed in counterparts, each of which when so executed and delivered shall be
considered an original, and all such counterparts shall constitute one and the
same instrument. Capitalized terms used but not defined herein shall have the
meanings provided in the P&S.
[SIGNATURE PAGE FOLLOWS]
I-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers hereunto duly authorized,
this __th day of [_____________].
[DEPOSITOR]
By:
-----------------------------------
Name:
Title:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:____________________________________
Name:
Title:
WACHOVIA MORTGAGE CORPORATION
By:____________________________________
Name:
Title:
I-6
Exhibit J
---------
Form of Annual Certification
Re: [_______________] (the "Trust"), Mortgage Pass-Through
Certificates, Series [_____], issued pursuant to the Pooling
and Servicing Agreement, dated as of [_____], 200[_] (the
"Pooling and Servicing Agreement"), among [_____], as
depositor (the "Depositor"), [_____], as trustee (the
"Trustee"), [_____], as servicer (the "Servicer"), and
[_____], as responsible party
I, [identify the certifying individual], certify to the Depositor
and the Trustee, and their officers, directors and Affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. The servicing information required to be provided to
the Trustee by the Servicer under the Pooling and Servicing
Agreement has been so provided;
2. I am responsible for reviewing the activities
performed by the Servicer under the Pooling and Servicing Agreement
and based upon my knowledge and the annual compliance review
required under the Pooling and Servicing Agreement, and except as
disclosed in the annual compliance statement required to be
delivered to the Trustee in accordance with the terms of the Pooling
and Servicing Agreement (which has been so delivered to the
Trustee), the Servicer has fulfilled its obligations under the
Pooling and Servicing Agreement; and
3. All significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards for
purposes of the report provided by an independent public accountant,
after conducting a review conducted in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or similar
procedure, as set forth in the Pooling and Servicing Agreement, have
been disclosed to such accountant and are included in such report.
Date: _________________________
-------------------------------
[Signature]
[Title]
